PRE-JACKSON COSTS REGIME HELD TO BE COMPATIBLE WITH THE EUROPEAN CONVENTION ON HUMAN RIGHTS

on Wednesday, 15 October 2014.

The Supreme Court has indicated that the pre-Jackson Costs Regime may breach the rights of paying parties.

Judgment has now been received in the matter of Coventry & Others –v- Lawrence & Another (2015) UKSC 50. The judgment was concerned with an attack on the compatibility of the European Convention on Human Rights with the system for recovery of costs in civil litigation in England and Wales following the passing of the Access to Justice Act 1999.

The case was originally concerned with private nuisance. The total damages at stake were at most £74,000. The losing party was ordered to pay 60% of the successful party’s costs which amounted to base costs of £398,000 with a 100% success fee and an ATE premium of approximately £350,000 giving a total bill of £1,067,000. The paying party was Ordered to pay 60% of this bill leaving a total liability of £640,000.

It was initially argued that the requirement to pay 60% of the success fee and ATE premium under the Pre Jackson Cost Regime was a breach of the Respondent’s rights under Article 6 ECHR and under Article 1 under the first protocol of the Convention, since the Court was public body and was under an obligation to exercise its discretion as to costs, according to the Convention. In the original judgment, Lord Neuberger stated that “the issue of whether the 1999 Act costs regime and in particular a Claimant’s rights to recover any success fee and ATE premium from an unsuccessful Defendant, infringes the Convention, is one which it is open to this Court to reconsider.” He then further stated that “it may be that the Respondents are right in their contention that their liability for costs would be inconsistent with their Convention rights”. Any determination by a Court that the provisions of the Access to Justice Act 1999 infringed Article 6 would have very serious consequences for the Government as litigants would have a claim for compensation against the Government for that infringement. The Supreme Court adjourned the issue of the Respondent’s contention that their liability for costs infringed their right under Article 6 of the ECHR for a further hearing after notice had been given to The Attorney General and The Secretary of State for Justice.

By a majority of 5:2, the Supreme Court held that the Access to Justice Act Regime was compatible with the European Convention on Human Rights. Lord Neuberger and Lord Dyson gave the joint leading judgment and Lord Mance gave a concurring judgment. Lord Clarke gave a dissenting judgment with which Lady Hale agreed. It was stated the issue was not whether the Access to Justice Act Regime had flaws but was whether it was a proportionate way of achieving the legitimate aims it pursued. These were to contain the rising costs of Legal Aid, to improve access to the Court for members of the public with meritorious claims and to discourage weak claims. He stated there was a powerful argument that the 1999 Act scheme was compatible with the Convention, simply because it was a general measure which was justified by the need to widen access to justice to litigants, following withdrawal of Legal Aid, was made following wide consultation and fell within the wide area of discretionary judgement for law makers to make. It was stated there was no perfect solution to the problem of how best to enhance the access to justice, following the withdrawal of Legal Aid for most civil cases.

Clearly the decision contains an element of political expediency, but this should hopefully now speed up settlement of costs claims, where Defendant’s representatives have refused to make offers in relation to pre April 2013 additional liabilities.