We are now a year on from the abolishment of the recovery of success fees in Defamation and Privacy proceedings, which brought these distinct areas of law into line with the judgment of the European Court of Human Rights in MGN v UK.
Lord Jackson’s reforms had effectively extinguished the recoverability of success fees across a wide range of civil litigation when implemented in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which came into force in April 2013. However, defamation and privacy proceedings remained amongst the few areas of law exempt – and by extension protected - from this change.
The recovery of success fees in these areas had historically helped claimants of limited means to bring claims to protect their privacy and reputation. With success fees no longer being recoverable for any Conditional Fee Agreement (“CFA”) entered into after 6 April 2019, the abolishment continues to raise important questions about how such claims are to be funded.
However, all does not appear lost. Kingsley Napley will still consider the viability of a CFA for claims with a high likelihood of success. Reassuringly, After The Event (“ATE”) insurance, which protects claimants from paying their opponents legal costs in the event of a lost claim remains recoverable if the claim does go on to be successful.
This shake-up has encouraged claimants – and defendants - to look at alternative methods to fund or defend a claim. Whilst wealthier claimants are likely to fund their claim on a private basis, the funding landscape in this area now sees claims being funded on a private basis but with funds raised online through the emergence of crowd funding through websites including Crowd Justice, which selects cases of public interest and publicises them on its website and invites the public to fund them.
Additionally, for many claimants, the focus may switch to endeavouring to recruit third party litigation funders who will agree to fund the litigation on the basis of a share of the damages award. However, the extent to which litigation funders will see the privacy and defamation litigation market as being worth their investment remains to be seen.
This blog was written by Holly Shaw, Associate Costs Lawyer in our Costs team.