Government plans to curb costs in defamation proceedings

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Government plans to curb costs in defamation proceedings

24 September 2009
Steps to tackle excessive legal fees in defamation proceedings were announced today by Justice Secretary, Jack Straw.
The government response to the consultation Controlling Costs in Defamation Proceedings, which is published today, comes following extensive consultation with the Civil Procedure Rules Committee and representatives from the media, legal profession, insurance industry and judiciary.
The response sets out the first raft of measures aimed at making libel costs more proportionate and reasonable from 1 October 2009:

• early notice if ‘After the Event’ (ATE) insurance has been taken out
• a 42 day ‘cooling off period’ where, if the defendant admits liability and it leads to a settlement, the ATE premiums won’t be payable by the defendant
• a mandatory cost budgeting pilot for defamation proceedings, aimed at ensuring that costs are proportionate and within the agreed budget, with close judicial supervision.

Justice Secretary Jack Straw said:
‘Freedom of expression and investigative journalism are fundamental protections to the democracy of this country, of which we are rightly proud and the Government is working hard to protect.
‘Spiraling costs and disproportionate legal fees are too often a feature of defamation proceedings, skewing justice as defendants choose to settle unwarranted claims rather than face huge libel costs.
‘“After the Event” insurance premiums, a common accompaniment to “no-win, no-fee” civil proceedings, coupled with generous success fees, can make libel cases difficult to fight for some defendants, particularly regional media organisations.
‘That is why the Government is taking action to ensure that, where ATE insurance is taken out, defendants are notified as early as possible, and given the opportunity to reach a settlement without being liable for the insurance premiums.
‘As recommended by the Civil Procedure Rules Committee, publication proceedings will also be part of a mandatory costs budgeting pilot, with Judges scrutinising costs as cases progress to ensure that they are proportionate and within the agreed budget.
‘But these are only the first steps. We will be watching the pilot carefully and actively considering whether further measures are needed to control costs in this area.’

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Re: Government plans to curb costs in defamation proceedings

They also need to look at the problem of 'libel tourism' where currently people from foreign country A are allowed to sue in the UK about defamations made in foreign country B, thus clogging up the courts and driving the costs of reperesentation up.