Examination of Witnesses (Question Numbers
65-79)
MR MARK
THOMSON, MR
JEREMY CLARKE-WILLIAMS,
MR JONATHAN
COAD AND
MR ROD
CHRISTIE-MILLER
24 FEBRUARY 2009
Chairman: We now move to the second session
this morning and our second panel who generally represent claimants.
May I welcome Mark Thomson of Carter-Ruck Solicitors, Jeremy Clarke-Williams
of Russell, Jones & Walker Solicitors, Jonathan Coad of Swan
Turton Solicitors, and Rod Christie-Miller of Schillings Lawyers.
Philip Davies is going to begin.
Q65 Philip Davies: I believe very strongly
that freedom of expression is one of the most precious things
that we should defend in this country. In a democracy we often
rely on the media to expose wrongdoing by people in authority
and that seems to me to be a good thing. The allegation that we
heard in our previous session—Mr Thomson, you seemed to
be the main person in the line of fire from what I could hear
so perhaps you might want to tell us your thoughts on this—is
that the exorbitant fees that you charge, particularly in relation
to CFAs, are preventing the press from publishing certain stories
that they should be publishing because they fear having to cough
up extortionate amounts of money to firms like yours. What would
you say in response to them?
Mr Thomson: I do not think that
is right. The number of libel claims in the courts since the new
rules came into force in 1998 have remained around about the same;
they have gone down a little bit. There has been no significant
change since the CFA regime came in, so statistically that is
not right. The reason why there are expensive litigations in my
personal experience is because of the way the defendants, who
determine the issues in the case, run the case. Most cases, as
the previous panel said, settle very quickly with an apology,
modest damages and modest costs. It is when the defendants decide
to defend cases that the costs escalate on both sides and probably
at equal levels. The whole point about CFAs is that they do provide
access to justice to people who cannot afford it and against newspapers
who have very substantial resources. It is important that they
should have that right to get remedies, as can anyone else. I
do not think that it is having a significant chilling effect.
The number of claims is around about the same. A lot of these
claims are brought about because press standards in my view have
dropped in the last 15 years.
Q66 Philip Davies: We have heard
that the typical hourly fee might be somewhere in the region of
£600 an hour and on a CFA, with 100% uplift, that will be
£1,300 an hour plus VAT. If firms like yours are so concerned
about access to justice then perhaps reducing those fees would
be a good start, would it not?
Mr Thomson: Those figures are
not correct. Our fee at the moment is £400 an hour, which
is about the standard rate in the industry.
Mr Evans: Are you having a sale?
Philip Davies: It is the credit crunch!
Q67 Chairman: On the £400 an
hour point, on top of that you still have your success fee.
Mr Thomson: It is a staged success
fee.
Q68 Chairman: And you have the After
the event insurance (ATE) premium on top of that.
Mr Thomson: Yes, and that is staged
as well.
Q69 Chairman: If you add in all the
additional costs what is the total per hour?
Mr Thomson: It depends when it
settles. Under The Times, Carter-Ruck cost agreement, if
they have checked the story and it is then settled within 14 days
the success fee is zero, so it stays at £400 an hour. Because
of the way the staged payments work, it is only if the newspaper
decides there is merit in fighting the case that the uplift increases
at the end of the case. Most cases in reality do settle within
14 days. If the other media got involved—and they refuse
to at the moment for their reasons—and adopted The Times,
Carter-Ruck Agreement, if it is settled quickly there would
be no success fee.
Q70 Philip Davies: What proportion
of cases that you take on under a CFA do you win and what proportion
do you lose?
Mr Thomson: I do not know those
figures. They are confidential. There are a number of committees
looking at costs at the moment. Our firm is providing the data
anonymized to those various committees. They will be provided
in anonymized form.
Q71 Philip Davies: Why is it confidential
how many cases you win and lose?
Mr Thomson: I do not know what
the answer is anyway.
Q72 Chairman: It was suggested it
was a 98% success rate.
Mr Thomson: I do not think that
is right.
Mr Clarke-Williams: I think it
should be pointed out as well that, of course, when a CFA is entered
into by a firm of solicitors it can represent a very considerable
investment by that firm because you are agreeing to act on a "no
win, no fee". In my firm we have a very rigorous risk assessment
procedure at the outset to decide whether or not we are prepared
to take on a case on a CFA. So it is not surprising that the cases
we do take on on CFAs are ones we expect to win. It has rather
been presented as if everybody who walks through the door is immediately
put on a CFA and cases are run willy-nilly and because of the
defects of the system large cheques are then written out at some
stage in the future by newspapers to firms of solicitors. That
is not what my experience is.
Q73 Philip Davies: It is quite a
good racket, is it not, if you are going to take on a case that
you are pretty sure you are going to win anyway and you shove
it on a CFA and therefore double your income as a result? You
are doubling your income on a case that you are absolutely certain
you are going to win. It is nice work if you can get it. You should
be paid less for cases that you are certain you are going to win.
Surely you should be paid more for the trickier ones, not a vast
amount of money for the easy ones.
Mr Clarke-Williams: The 100% success
fee would only kick in at trial. The success fees which would
be claimed and may well be compromised at a lower level
are much less if a case settles early. If the same risk assessment
is applied by the newspaper or the defendant and they decide that
they are going to lose then cases are generally settled at very
modest levels early on. Obviously as a case progresses—and
it can sometimes take a year and a half to get to trial, it may
involve two or three or four people working on a case—the
risk to the firm who is conducting it under the CFA increases
and therefore that is why the success fees rise as a case approaches
trial.
Q74 Chairman: Is that not exactly
the problem which was outlined to us by Tony Jaffa earlier, that
actually because of this structure he advises his clients that
they had better settle because it will not cost them anything
like the amount of money it will if they have to go to trial?
You are creating a financial incentive to settle a case whether
or not you actually believe you stand a reasonable chance of winning
it in court.
Mr Clarke-Williams: First of all,
CFAs are available to defendants. If the defendants think they
have a good case and the claimant is under a CFA but with insurance
then they know that they will get paid or if a claimant is one
of these wealthy celebrities with funds to pay. If a defendant
risk assesses the case and thinks they are going to win there
is nothing to stop their lawyers acting for the newspapers under
a CFA and that does occasionally happen.
Mr Coad: There is a lawyer called
David Price who does work on CFAs. CFAs are as much available
to defendants as they are to claimants. It is something which
is available to all of the gentlemen who have spoken to you before
us. There is nothing to stop them taking on CFAs. At the risk
of slightly pulling their leg, I think if you visited some of
their offices you might be surprised at their size and grandeur
and City locations. I say this because my firm does not do CFAs
or at least we have not yet done a CFA against a newspaper. If
you visited Reynolds Porter Chamberlain or Taylor Wessing or whatever
you would find them in very big, smart City locations and you
would find us on two floors of a converted Wesleyan chapel in
Covent Garden.
Chairman: That is because you do not
do CFAs!
Q75 Philip Davies: We will resist
getting the violins out just for a minute. Is the answer to this
problem that the costs should be capped by the courts on a far
more routine and regular basis than happens at the moment? Is
that not the solution to this particular problem?
Mr Coad: I do not know whether
this is commonly understood, but the courts do fix and assess
costs. The newspaper always has the opportunity to do what we
used to call "tax" or have costs assessed. The courts
do have control over the costs.
Q76 Philip Davies: It does not happen
very often where costs are capped, though, does it?
Mr Coad: The cost-capping regime
is an interim measure, but at the end of the case, if the newspaper
objects to the costs that are being incurred by the claimant,
be it on a CFA or not, then the court can go and say, "No,
we won't have this," and challenge them and have them reduced.
Mr Christie-Miller: There has
also been consideration of the cost-capping regime. Just yesterday
the Ministry of Justice put out a variation to the civil procedure
rules which introduces rules relating to cost capping and those
were subject to extensive input from many interested parties,
including representatives of the media and some of the gentlemen
who are sitting behind us. Those representations were considered
and the Civil Procedure Rules Committee decided that the cost-capping
regime should be as it was presented yesterday. In addition, Lord
Justice Jackson is undertaking a review of civil costs generally.
So these things are being considered.
Q77 Philip Davies: Are you all unanimous
in the view that there is no way that the CFA could be altered
or amended in order to protect the freedom of expression and freedom
of speech of the media?
Mr Thomson: I think that The
Times, Carter-Ruck protocol which the other media refuse—I
am not sure if the Committee has seen it—is a fair staged
agreement and reduces risk early on. The Times adhered
to it. The Civil Justice Committee is considering bringing it
into law. I think that is a solution. If the newspaper checks
their facts before, which is rare now, in 14 days and settle there
is no success fee. If that was adopted throughout that would reduce
such chill as there is.
Mr Clarke-Williams: A very important
part of the access to justice provisions being introduced was
to try and settle disputes at a very early stage. In defamation,
there is a pre-action protocol, which means that parties are meant
to exchange full details of their claim and the defence before
they get to the stage of litigation, and there is a requirement
to consider alternative dispute resolution, such as mediation.
There are all sorts of provisions which encourage parties to try
and resolve things at an early stage when costs are low.
Q78 Philip Davies: I am all for people
having access to justice and things being sorted out quickly,
but surely it must be wrong if a regional newspaper or even a
national newspaper is settling a case where it feels in its heart
of hearts that what it has put is right because the risk of the
huge costs at the end of it might threaten to put it out of business.
Surely that is not justice if you get to the stage where people
are settling cases not on the merits of the case but simply because
they cannot afford to run the risk of potentially losing it because
it might finish them off. That cannot be justice, surely.
Mr Coad: I think you have to look
at the number of libel writs against the overall turnover and
profit of Fleet Street. I think you have got to keep some sense
of proportion here. There are a whole range of defences available
and there is an enormous array of privileges available to the
press. I think you have just got to keep some sense of proportion,
the number of libel writs against the turnover of Associated Newspapers
or News International and remember that there is an enormous media
corporation here and a relatively small number of libel actions.
Q79 Chairman: It is worth pointing
out that most newspapers now are barely profitable at all; indeed,
a large number are not making money. So the idea that these are
institutions awash with money to pay out in libel damages I do
not think is an accurate one in today's climate.
Mr Coad: I cannot pretend to have
done more than looked at the published figures, but the published
figures, as far as I can work out from looking at what is said
by the press about themselves, is still a turnover of about £8
billion with a profit of about £1 billion. They are still
reasonably substantial figures.
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