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Detail of outcome
The consultation sought views on proposals for costs protection in defamation and privacy cases that should accompany the abolition of the recoverability of the success fee in these cases. Following the consultation, the government has decided not to proceed with the costs protection proposals as set out in the consultation, but to keep the existing arrangements in place when the success fee reforms come into force on 6 April 2019.
The government will commence the ‘no win no fee’ conditional fee agreement (CFA) reforms in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 for defamation and privacy cases. This will make the lawyer’s ‘success fee’ non-recoverable (that is, no longer payable by the losing party) This will further control the costs of these cases and will also give effect to our legal obligations under the MGN v UK judgment of the European Court of Human Rights in 2011. The provision will come into force for new cases on 6 April 2019.
The government has also decided to keep in place, at least for the time being, the existing costs protection regime. This means that after the event (ATE) insurance premiums will remain recoverable for these cases when the CFA success fee reforms come into force for new cases on 6 April 2019. The ATE regime enables parties with a good case to litigate and discharge their Article 10 rights (freedom of expression) without the fear of having to pay potentially ruinous legal costs if their case fails.
This approach - of abolishing recoverability of the CFA success fee, but retaining it for the ATE insurance premium - will control costs but protect access to justice, since parties with good cases can still benefit from recoverable ATE insurance in respect of adverse costs
A summary of the responses to the consultation and details of the reasons for deciding on the way forward are set out in the consultation response. The government received a total of 48 responses, all of which were carefully considered before reaching a conclusion. A list of all the organisations who responded can be found at Annex A of the consultation response.
Costs protection protects parties from the costs that they might have to pay to the other side in civil litigation. Our proposals are designed to help people and organisations of modest means to be able to bring and defend defamation and privacy claims without the fear of having to pay unaffordable legal costs to the other side if they lose.
The consultation also proposes that those of substantial means (whether individuals or organisations, such as national newspapers) would be excluded from the costs protection regime, while those of less modest means might have to pay something towards the legal costs of the other side if they lose.
The Government hopes to introduce the new costs protection regime through changes to the Civil Procedure Rules in April 2014, at the same time as fully implementing no-win-no-fee reforms.
The consultation is aimed at people and organisations with an interest in defamation and privacy proceedings in England and Wales.