Freedom of expression under the costs regime: a chilling effect on journalism?

28 Apr 2017 | 7 min read

Did costs orders infringe newspaper publishers’ rights under Article 10 of the European Convention on Human Rights (ECHR)? Aidan Wills, barrister at Matrix Chambers, discusses the Supreme Court’s decision in three conjoined appeals (Times Newspapers Ltd v Flood) [2017] UKSC 33.

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The Supreme Court dismissed the appellant newspaper publishers’ appeals against costs orders, as they could not rely on the alleged rule that, where a claim involved restricting a newspaper or broadcaster’s freedom of expression, it would, under domestic law, normally infringe their rights under Article 10 ECHR to require it to reimburse the success fee and after-the-event (ATE) insurance premium. The rule’s application would infringe the respondents’ rights to property and undermine the rule of law, and it could not apply where information had been obtained illegally by or on behalf of a media organisation.

What was the background to the three appeals?

Success fees are a percentage uplift (up to 100%) on base costs provided for under a conditional fee agreement (CFA) and payable to a litigant’s lawyers in the event that they are successful. ATE premiums are sums paid by a litigant to insure her against potential costs liability—collectively known as ‘additional liabilities’. The Access to Justice Act 1999 (AJA 1999) introduced provisions permitting the recovery additional liabilities (with the Civil Procedure Rules 1998, SI 1998/3132 and a Costs Practice Direction containing detailed provisions governing their award). While the Legal Aid, Punishment and Sentencing of Offenders Act 2012 (LASPO 2012) ended the recovery of these sums from opponents in most areas of civil litigation, a transitional order preserved the pre-LASPO 2012 position in a few areas, including publication cases (primarily privacy and defamation cases).

The three appeals were brought by news organisations against costs orders requiring them to pay the claimants’ additional liabilities in claims they had lost. Flood v Times Newspapers and Miller v Associated Newspapers were libel cases. Frost v MGN was a privacy case arising from phone hacking by the Mirror Group Newspapers (previously known Gulati and others v MGN). The facts of the substantive claims were not material to the appeal before the Supreme Court.

The appellant publishers argued that requiring them to pay these additional liabilities was a breach of the right to freedom of expression under Article 10 ECHR, primarily on the basis that it has a chilling effect on journalism. The Times also appealed (unsuccessfully) against the award of the judge’s decision on the award of base costs in Flood. I will focus on the Article 10 ECHR appeal, which was common to the three cases.

What were the key issues before the Supreme Court?

The overarching issue before the court was whether ordering the appellants to pay the claimants’ additional liabilities amounted to a disproportionate interference with their Article 10 ECHR rights. Broadly speaking, this required the court to decide:

  • whether domestic law should reflect the Strasbourg Court’s decision in MGN v UK [2011] ECHR 66 such as to lay down a general rule that ‘where a claim involves restricting the defendant’s freedom of expression, then at least where the defendant is a newspaper or broadcaster, it would…normally infringe the defendant’s article 10 rights to require it to reimburse [a claimant’s additional liabilities]
  • if so, whether the effect of this should be that the costs orders made in the appeals must be amended to exclude the defendant in each case from paying additional liabilities

What did the Supreme Court decide, and why?

The court unanimously dismissed the appeals.

While the court indicated that it was inclined to agree with the reasoning in MGN v UK, it declined to express ‘a concluded view’ on its application in domestic law. This was on the basis that the government was not a party to the proceedings and that such a finding could have consequences for the government’s ability to ‘re-open’ this question and/or to challenge the reasoning in MGN v UK in a future case in Strasbourg.

Their lordships proceeded on the basis that it would normally breach a publisher’s Article 10 ECHR rights to require it to reimburse any success fee or ATE premium. That meant that, absent a good reason to the contrary, the appellants in Miller and Flood would be entitled to have the costs orders amended. However, MGN (the appellant in Frost) did not have the benefit of this position because the court decided that, having regard to the facts of the phone-hacking litigation, its Article 10 ECHR rights were very limited.

In Miller and Flood the court determined that were good reasons not to deprive the claimants of the recovery of the additional liabilities. First, it would infringe their rights under Article 1 of First Protocol to the Convention (A1P1), the right to property. This right encompasses situations in which financial obligations are incurred in reliance on a legitimate expectation that a legal right will not be retroactively invalidated. Second, it would undermine the rule of law because people are entitled to act on the assumption that the law is as set out in legislation (especially when confirmed by the highest court in the land—as it had been in Campbell v MGN (No 2) [2005] UKHL 61).

The court accepted that, regardless of the decision it reached, the rights of one side would be infringed. But it took the view that, if the appeals were allowed, the infringement of the respondents’ rights would be more significant and they stood to suffer substantially more injustice than would be suffered by the appellants as a result of dismissing the appeals.

Do these cases expose failures or shortfalls within the existing regime when it comes to defamation/privacy claims? How can or is this being remedied?

These appeals further illustrate the difficulties (and competing rights at stake) in ensuring access to justice for both claimants and defendants in publication cases. Costs in such proceedings are a vexed issue with which the government has been grappling for almost a decade and which is at the heart of the ongoing debate surrounding section 40 of the Crime and Courts Act 2013. There is no straightforward policy or legislative response—this may explain the caution exhibited by the Supreme Court in its judgment.

What are the takeaway points for practitioners?

This decision has not provided the clarity many practitioners had hoped for. Practitioners cannot be fully confident of whether or not additional liabilities will be recoverable in any given case.

Although the court did not strike down the provisions permitting the recovery of additional liabilities and it left open the question of the application in English law of the rule in MGN v UK, it strongly inclined to the view that requiring defendant media organisations to pay additional liabilities in publication cases would ordinarily violate their Article 10 ECHR rights. This position coexists uneasily with the LASPO 2012 transitional order, which continues to permit the recovery of additional liabilities in publication cases.

Whether the courts will order publishers to pay additional liabilities will depend on the strength of the competing rights in any given case.

It is reasonable to assume that, where CFAs have been entered and/or ATE insurance taken out prior to this decision, the A1PI/non-retroactive-alternative of rights arguments (which prevailed in this case) will carry considerable weight. However, given the Supreme Court’s reasoning in MGN v UK, it is likely to be more difficult for litigants incurring additional liabilities after this judgment to rely on such arguments.

Rights under Article 6 ECHR (for both claimants and defendant publishers), Article 8 ECHR (for claimants) and possibly Article 14 ECHR (for defendant publishers) may also be relevant to such decisions.

With a growing media and information law practice, Aidan Wills has been instructed in privacy, libel, breach of confidence and data protection matters. His recent advisory work has also covered notice-and-take-down procedures, intermediary liability and search engine delisting. Aidan is a pre-publication night lawyer at three national newspapers.

Interviewed by Kate Beaumont. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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Filed Under: DR/Litigation , EU

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