On 30 November 2012, following a 10-day trial, Mr Justice Bean dismissed a libel claim brought by Reginald Mengi, the Executive Chairman of IPP Ltd, a company which holds major newspaper and broadcasting interests in Tanzania ( EWHC 3445 (QB)). The defendant, Sarah Hermitage, had set up a blog to record and to publicise as a warning to others her experience in Tanzania; how, with no protection from the local courts and officials, she and her husband were by threats and intimidation driven out of the country and forced to abandon their investment in their farm, Silverdale.
A major factor in the ordeal they suffered in Tanzania was the hostile and defamatory coverage their case received from IPP newspapers. Despite Mr Mengi’s evidence that he was “not responsible, not accountable and not answerable” for the editorial content, Mr Justice Bean found that he had either “encouraged or knowingly permitted” the media campaign and was in that sense “complicit” in the “corruption and intimidation” which had helped his brother, Benjamin, to seize Silverdale farm. On this basis, he upheld the defence of justification.
Mr Justice Bean ordered that Mr Mengi should pay the defence costs on the indemnity basis. In reaching this decision, the factors cited by the Judge included that the litigation was rightly described as “oppressive”, that “enormous costs had been thrown at the case from the beginning, indeed before the issue of proceedings” and that the evidence of the Claimant and his witnesses had in a number of respects been “misleading and untrue.” He further ordered that Mr Mengi should make an interim payment of £1.2million on account of the defendant’s costs.
The case is the latest example, following those brought against Simon Singh, Henrik Thomsen, Peter Wilmshurst and Hardeep Singh, where individuals sued for libel by wealthy claimants have been able to defend their rights with the benefit of conditional fee agreements. Although herself a qualified lawyer, Sarah Hermitage was confronted by a highly experienced legal team in England led by Richard Rampton QC, supported by IPP’s in-house legal department in Tanzania, with apparently limitless resources. According to the budget prepared for the Case Management Conference in November 2011, the legal costs incurred by Mr Mengi even before the issue of proceedings amounted to £298,245.07. It would have been grossly unfair for Sarah Hermitage, who was in no position to fund lawyers to defend her, to be expected to fight the case on her own. As Mr Justice Tugendhat stated in an earlier judgment, when he ordered that Mr Mengi should pay into court £1.86million as security for costs, “one of the obvious realities…is that [Sarah Hermitage] would have difficulty in obtaining the legal advice and representation she needs to defend this claim without the benefit of the CFA which she has made with her solicitors.”
The provision in the Legal Aid, Sentencing and Punishment of Offenders (“LASPO”) Act 2012 by which success fees in conditional fee cases will cease to be recoverable from opponents will make it more difficult for those of limited means to obtain legal representation (see my earlier post). In a situation, likely to be common, where the only realistic possibility of paying a success fee will be from the damages recovered, it will only be economically viable for lawyers to act on a “no win, no fee” basis for claimants where the anticipated award is very high. Defendants, like Sarah Hermitage, who have no prospect of recovering damages, will have no means by which to compensate the lawyers for the risk they take when acting on a conditional fee basis.
Access to justice requires that litigants must have a practical “opportunity to present their case effectively before the court” without an “unacceptable inequality of arms” between the parties (See Steel and Morris v UK, 68416/01  ECHR 103). There is a serious risk, illustrated by the Sarah Hermitage case, that the effect of the LASPO Act will be to deprive deserving litigants of the legal representation they need.
Andrew Stephenson is partner in the firm of Carter-Ruck and acted for acted for Henrik Thomsen and Sarah Hermitage