Damages-Based Agreements Regulations 2010

My Lords, my admiration for the noble and learned Lord, Lord Woolf, and his magisterial work in promoting access to justice over the years has been uplifted by at least 100 per cent for every year that I have had the privilege of knowing him. However, I much regret that on this occasion I cannot agree with the conclusion that he has arrived at and the views expressed by other noble Lords and noble and learned Lords in relation to this matter. I will briefly—I emphasise "briefly"—explain why I cannot support the amendment in the name of the noble Lord, Lord Martin. I must declare an interest. I represent Mirror Group Newspapers in the European Court of Human Rights. It has a claim that raises the issue of whether the very large sum in costs, including a substantial uplift, that it was required to pay the model Naomi Campbell, after a case involving an infringement of her privacy rights, is a breach of its freedom of expression. That is a pending case. I suggest to noble Lords that the Government are seeking to address a substantial unfairness in the legal system. Where the claimant has a conditional fee agreement and after-the-event insurance, he or she is at no risk as to costs. By contrast, the defendant is at risk of paying inflated costs. In many such cases, therefore, the defendant is under unreasonable pressure to settle the case to the advantage of the claimant. It is true that this is a problem generally, across the legal system. It has been addressed by Sir Rupert Jackson and I understand that the Government are still considering it. However, a particular and urgent problem needs to be addressed in the context of libel and breach of confidence law. It is an urgent problem because the consequence of the cost regime today is that it is deterring defendants from exercising their freedom of expression. That is a fundamental right for them and a fundamental condition of a free society in which those who are governed are given information about those who govern us, information that people in power, let us be blunt about it, and influential people would much prefer to keep confidential, even if—indeed, often especially if—it touches on matters of public interest. The Government—and I associate myself with them—place a higher value on freedom of expression than does the noble Lord, Lord Martin of Springburn. The inevitable consequence of these success fees today is that newspapers and magazines shy away from publishing information about the rich and powerful to the detriment of the rest of us. The 100 per cent success fee is a deterrent, whether the journalism is lazy or dedicated. The justification for the success fee of up to 100 per cent, as has been explained, was that it would enable otherwise impecunious claimants to bring proceedings to vindicate their reputation on a conditional fee basis and to compensate lawyers, as the noble and learned Lord, Lord Scott of Foscote, has explained, for the unsuccessful cases in which they act on such a basis. It is a swings and roundabouts approach. This rationale, in my experience, has been undermined by two factors that have not yet been mentioned. First, a very large number of the claims in which these success fees are secured have been brought by claimants who were perfectly capable of paying their lawyers a proper professional fee. There is no restriction on these success fees to the impecunious. The second problem is that not all but many lawyers operating in the field of libel and confidence choose very carefully the cases in which they act on a conditional fee basis. They tend to act—and who can blame them?—in the cases that they perceive to be winnable, including cases from claimants who are not wealthy. The lawyers are not concerned about that; they are concerned with whether these cases are winnable. That is the answer to the point made by the noble and learned Lord, Lord Scott of Foscote, that the lawyers would have to win nine out of 10 cases. Yes, but they select very carefully the cases in which they are prepared to act on a conditional fee basis. The very fact that there is a potential 100 per cent uplift helps to ensure that the cases are successful because in a large proportion of these cases the defendants, knowing that there is a great risk of having to pay such high costs, are prepared to offer settlements to claimants at a level higher than the case would otherwise deserve. I accept that there needs to be further reform of CFAs in the light of the Jackson report and that careful consideration needs to be given. For my part, I do not see that as a reason for objecting to this specific and positive stance in the context of libel.