The Bookseller.com

1st December 2008

Caroline Kean is a partner at Wiggin LLP.

Courting costs

03.03.08

The decision in the "Bent Coppers" case last autumn—when the High Court upheld the right of Orion to publish a book about corruption in the Metropolitan Police force—was a much needed relaxation of the UK's draconian libel laws in favour of non-fiction publishers. But there is a still a greater threat that has yet to be tackled: the unfettered use of CFAs (conditional fee agreements) to fund claimants' libel actions.

It used to be the case that the least well-off in society had the benefit of legal aid to fund their claims. But the cost of state-funded litigation spiralled out of control and the government introduced conditional fee agreements—where the solicitor took the risk—in its place. The rationale was that a solicitor could charge up to 100% in excess of their normal hourly rate on the basis that they would only win half the cases. Clever libel lawyers soon realised that with the balance of proof stacked so firmly in the claimant's favour in the UK, CFAs could be a very useful means of securing "access to justice" for people who might otherwise have been deterred from bringing claims.

In the UK, the real burden in any libel case rests on the publisher, and it is a brave publisher who will go to trial without the security of some sort of settlement offer being made to protect them from a greedy claimant. But the typical CFA agreement triggers liability for costs that the publisher must pay as the price of exiting the litigation. Claimant solicitors have been known to assert that they charge £600 per hour as a base rate, which with a 100% uplift means that publishers can be left looking at a cost of £1,200 per hour.

Celebrities including Naomi Campbell, Paul McKenna and Sharon Stone have been delighted to take advantage of this regime. Even worse, there is no obligation on the claimant to notify the publisher that they are thinking of bringing a claim before their lawyers begin. In one notorious case, the claimant's solicitors racked up £36,000 before they even sent a letter to the defendant. The notorious "chilling effect" of libel actions has never been so cold.

There are signs of change. The Ministry of Justice has agreed to consider capping success fees at various stages of the litigation process. It's a small step towards a level playing field. Can we dare to hope that one day publishers of non-fiction will not only exercise the right to publish material in the public interest, but be able to defend their decision to do so without risking bankruptcy?