Defamation case costs too high, says Straw, but no time for 'piecemeal reform'

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Fees from lawyers representing claimants in privacy and defamation cases are too high, the Secretary of State for Justice, Jack Straw, said today.

There is 'no economic pressure' on the claimant's side to keep fees down in cases involving news organisations; while newspapers and other outlets will seek to reduce potential costs, he said in a session giving evidence to a House of Commons select committee on press standards, privacy and libel .

The gap between damages awarded against news organisations and the costs incurred in such cases is 'very significant if not to say astonishing', he added.

In some privacy and defamation cases conditional fee agreements [CFA] are used, under a 'no win, no fee' system, to provide access to justice for those who could not otherwise afford to pursue litigation. If the case is won the solicitor will charge a success fee. In his evidence to the committee in April, Daily Mail editor Paul Dacre said the situation in the UK is 'always win, double the fee'.

A risk of high costs in such cases has a chilling effect on news organisations, in particular the UK's regional media, who do not have the resources to pay them, added Straw at today's meeting.

"The CFA arrangement is there to offer better access to justice, not because people are inadvertently subject to some mistake that can be corrected, [and] they can go in for a lottery," said Straw.

To change his view, lawyers charging such fees would have to prove that it was in the public interest to do so, said Straw.

Rt Hon Sir Anthony Clarke, Master of the Rolls and head of civil justice, who spoke to the committee ahead of Straw, said there had not been sufficient research into whether it is necessary for lawyers to charge such high fees.

Fellow speaker Rt Hon Lord Justice Jackson, Lord Justice of Appeal, said he was conducting a review of the 'rules and principles governing the cost' of all areas of civil litigation.

"There is a growing body of evidence which suggests that the present CFA and ATE [after the event insurance] regime, which is of course satisfactory for claimants and one must not lose sight of access to justice (…) has the consequence that significantly more than the entire costs of litigation is cast upon the defendants," he said.

"It is very important to look at the problems of cost holistically. There are very serious issues concerning the costs of the whole of civil litigation (…) we must deal with this problem in principle and across the board, and not embark on piecemeal reform for one tiny part of the civil litigation terrain which may perhaps have a slightly more vocal representation than others."

Jackson rejected suggestions that cost-capping for fees in defamation cases and means testing for libel claimants would improve the situation.

"I myself see considerable difficulty in devising a set of rules the effect of which would be only persons who satisfy a particular means test are entitled to instruct their lawyers under a conditional fee agreement," Jackson told the committee.

"While I'm conscious of the problems conditional fee agreements generate, at the moment I'm very doubtful that means testing would be the way to crack the problem."

While Jackson said he could see an economic incentive for lawyers to pick cases they are going to win, CFAs and resulting success fees are only likely to be obtained at the end of lengthy court cases, he suggested.

"A filter is created that generally filters out weak and frivolous cases," he said.