Recovery of additional liabilities in publication and privacy cases

The Supreme Court, yesterday, handed down judgment in TNL v Flood; Miller v ANL; Frost & Ors v MGN [2017] UKSC 33. These three appeals were heard together as each raised the central issue as to whether the recoverability of CFA success fees and/or ATE premiums against media defendants was an infringement of their freedom of expression rights under article 10 of the European Convention on Human Rights. Lord Justice Jackson, in his 2013 LASPO reforms, eradicated the recovery of success fees and ATE premiums from the paying party in most civil actions, however, defamation and privacy claims were amongst the few exceptions not included within the reforms.

The central issue above, in relation to the recoverability of CFA success fees in media cases, was in fact the issue addressed and rejected by the House of Lords in Campbell v MGN (No.2) [2005] 1 WLR 3394 but accepted by the ECtHR in MGN Ltd v UK (2011) 53 EHRR 5. Therefore, integral to the Supreme Court cases was whether to apply, domestically, the decision of the Strasbourg Court in MGN v UK thereby departing from the House of Lords decision and, if so, whether the reasoning in MGN v UK should be extended so as cover the recoverability of ATE premiums.

The Supreme Court reached a unanimous decision. Lord Neuberger, in a single judgment, ruled that all three appeals must be dismissed.

The Court decided that a ruling as to whether MGN v UK should be followed is inappropriate because the UK government, “the party who would be, at least potentially, most detrimentally affected, by the decision is not before us”. The Court, therefore, concluded that it could not explicitly express a general rule that the recoverability of the additional liabilities would be an infringement of newspaper publisher’s rights under Article 10. However, working on the assumption that there was a general rule, the Court decided that in denying the Claimants the ability to recover the success fee and ATE premium [incurred in reliance on a statute with the legitimate expectation that the statute would not be retrospectively repealed] would infringe their rights under Article 1 of the First Protocol to the Convention. Lord Neuberger stated: “It is a fundamental principle of any civilised system of government that citizens are entitled to act on the assumption that the law is as set out in legislation (especially when its lawfulness has been confirmed by the highest court in the land), secure in the further assumption that the law will not be changed retroactively – i.e. in such a way as to undo retrospectively the law upon which they committed themselves”.

Whether the appeal was allowed or dismissed, a convention right would be infringed. The Court held that the “just and appropriate order” is to dismiss the appeals, as to allow them would be a “graver infringement” of the claimants’ rights than the infringement which the newspaper publishers will suffer if the appeals are dismissed.

The Judgment, therefore, leaves scope for further challenges and with Brexit on the horizon it seems it will only be a matter of time before the same issues are re-examined. However, one thing that is clear is the Courts’ reluctance to disrupt agreements that are entered into based on the reliance of settled domestic law.

A public consultation on key aspects of media regulation was launched in November 2016. The most crucial relates to section 40 of the Crime and Courts Act 2013 which, if implemented, would have the effect that media outlets that do not sign up to an officially ‘recognised’ regulator would, generally, have to pay the legal costs for both sides in defamation or privacy claims regardless of the outcome. Newspapers which are members of an official regulator would be exempt from paying their opponent’s legal costs even if they lost. Perhaps the issues addressed by the Supreme Court will become defunct in any event!

On a similar note, and extending upon the issues raised and addressed by the Supreme Court, it is likely that the case of BNM v MGN [2016] EWHC B13 (Costs), regarding the assertion that the current proportionality test is to be based on costs inclusive of pre-commencement additional liabilities, will be overturned on appeal. Time will tell…

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