Written evidence from Jonathan Steinberg (PS 129)


I have been referred to a letter you have received from David Price concerning CFAs and highlighting the overwhelming problems defendants have in defamation cases where legal aid is in practice unavailable and where the problems inherent in getting a solicitor to take on a case where there are no damages (e.g. that for a defendant) can be insuperable. I understand that Mark Stephens has told you as an authority on the subject that "no rational lawyer would do defendant CFA work".

Although I am sure David Price is genuine in what he says, you should probably understand precisely the extent to which what Mark Stephens tells you is true: I have particular knowledge of one case where Mark Stephens' firm was representing an octogenarian diabetic lady with a severe heart condition who was unwittingly the victim of a defamation judgment (not, obviously, a defamation case) and who risked being thrown out of her home if her solicitors were not going to take action to rectify a clear and blatant injustice: It had arisen as a result of a dishonest firm of solicitors entering that judgment (one amongst many) ex parte and effectively without notice in a case which Mr Justice Eady had described as a "sterile defamation case" in which His Lordship had said in a judgment that the claimants (the firm of solicitors) "did not have a proper cause of action in defamation". Finers had been instructed to preserve the position of their client in her home and were instructed to read the papers in the defamation action underlying the judgment which the dishonest solicitor (acting for their own financial benefit, and not for any client) sought to enforce against her. It seemed that if they were to take the case on, they would have to represent the defendant to the defamation action on a CFA basis. There was an opportunity to simply set aside the wrongfully entered judgment and completely absolve Finers' client from any danger of losing her home; and of course obtain a very large costs order in her favour. So reluctant were this large firm to take on a defendant case under a conditional fee arrangement that when formally instructed to do so, they refused to read the papers in the underlying defamation case (without telling their client) for fear of having to act on such an arrangement and did indeed fail completely to read the papers. As a result, they lost an easy to win case and were forced to unceremoniously dump their client (though not without presenting her with a bill for immediate payment of twenty five thousand pounds) and she was thrown out of her home of fifty years (almost directly from the Cardiac Care Unit of St Mary's Hospital Paddington), onto the streets.

What is even worse about this case is that Finers were the very firm which had just won a major defamation case called Jameel v Dow Jones (acting for a fee paying defendant) in which almost exactly the same set of facts/law had occurred as occurred in the case in which she was the victim. So Finers had unique direct and pertinent knowledge of exactly how weak-to-non-existent the defamation judgment against her was in her case. (The Master of the Rolls had described it in Jameel to this very firm, Finers, as abuse of process). Yet they still would not take on that defamation defendant under anything resembling a CFA, even where fee paying work was being undertaken in the very same case and they could not adequately represent their fee paying client without taking on the defamation work.

I should add that Finers had been instructed that the judgment sought to be enforced against their client in her case had been obtained ex parte without notice and Mr Justice Eady had only allowed it to be entered because as it was ex parte, there was no one to apprise His Lordship to the fabrications of facts and systematic material deceptions of his court which had occurred in this one part of a series of abuse of process cases started by the dishonest solicitor solely for the costs they could milk out of any action they could dream up: The defamation case was but one case in a series of a half dozen dreamed up by this solicitor. Yet still a firm which ought not to have been in any way afraid of litigation such as Finers would not dream of looking at even this case under a CFA.

I have already written to your Committee about the urgent need to promulgate new regulations to facilitate defamation cases being undertaken under CFAs; as an alternative to the UK courts being told by the European Court of Human Rights that the legal aid regulations undermine Article 6(1) Convention Rights in defamation cases. Although I see that David Price says he takes on defendant CFA work, the Committee now has this new letter from a large West End firm, now supported by evidence, that "no rational lawyer would do defendant CFA work".

Before your Committee comes to any conclusions, it may be worthwhile doing a quick check of the actual size of firms which generally DO consider CFAs and firms which generally don't. Always remembering that the smaller firms shouldn't be taking on many cases on CFAs: When they lose the case, in terms of the general effect on their partners actual annual results, each loss will be significantly more disastrous to the firm.

Read in the light of all the evidence the Committee now has, I trust you can see that the need to take action on CFAs is now critical. I am copying this letter to the Secretary of State for Justice as well as to Lord Justice Jackson.

September 2009