CFAs and Defamation Proceedings – the Government’s view

21 06 2010

The vexed issue of Conditional Fee Agreements in defamation cases has been discussed on this blog on a number of occasions.  The history of the last Government’s attempts to reduce the maximum success fee to 10% was discussed by Justin Rushbrooke in a recent post

The matter is not dealt with in Lord Lester’s Defamation Bill but today he raised it in a parliamentary question to the Minister of State at the Ministry of Justice, Lord McNally.

The Government’s answer was encouraging to those who supported treating defamation CFAs in the same way as other types as recommended by the Jackson Report.  The question and answer session began as follows:

Asked by Lord Lester of Herne Hill

To ask Her Majesty’s Government whether they intend to exercise the power conferred by section 58(4)(a) of the Courts and Legal Services Act 1990 to reduce the maximum success fee chargeable under a conditional fee agreement in defamation proceedings.

The Minister of State, Ministry of Justice (Lord McNally): The Government are currently considering the recommendations from Lord Justice Jackson’s report, Review of Civil Litigation Costs, published in January 2010.The Government’s analysis of Sir Rupert’s recommendations, once completed, will determine the next steps on the success fee in defamation proceedings.

Lord Lester of Herne Hill: My Lords, first, I pay tribute to the noble Lord, Lord Bach, and the right honourable Jack Straw, who began to focus on the abuses created by conditional fee agreements with 100 per cent success fees. I urge the Minister and his colleagues not to wait for consideration of the vast Jackson report before taking urgent action to deal with what I think is a scandal, where some fellow members of my profession charge inordinate fees through the conditional fee agreement so that the costs far outweigh any damages that NGOs, individuals or the press may have to pay. That is a very urgent matter.

Lord McNally: My Lords, we recognise the sense of urgency, but also the complexity of the issue. As my noble friend will know, the proposals made by the previous Government ran into trouble at the other end of the building. We are looking at the Jackson report and we will treat the matter with the urgency that my noble friend said that it deserves.

When pressed by former Labour Minister Lord Bach, Lord McNally replied

we will treat the matter with all due seriousness. Whether we will follow the same path as the previous Administration is more questionable. As the noble Lord will know, Lord Justice Jackson has made a different recommendation about how to deal with this problem. We will weigh up what he has argued in his report and consider the debate in this House and other views on what the previous Administration was proposing to do.

After a number of other questions, Lord McNally concluded

We have to get the balance right between the access to justice that conditional fees give and some of the anomalies and, indeed, abuses that have grown up in practice. We will do so after consideration of Jackson, but with all due urgency.

This appears to us to be a sensible approach – while reform is clearly necessary it is important to do this “holistically”, after full consideration of Lord Justice Jackson’s proposals.


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