Sun's challenge claws back costs in double fees case

Courts: will review cases on individual merit

The Sun has won a substantial cut in fees charged under one of the controversial conditional fee agreements (CFAs), which let lawyers double their costs if they win a case.

It challenged a £91,779 bill charged by CarterRuck & Partners which was representing a man wrongly identified as a paedophile by the paper.

A judge has reduced the bill to £32,633 and awarded Sun publisher News Group £10,000 costs.

Carter-Ruck told Press Gazette that it is considering an appeal and said it got a far better deal for its client than that originally offered by The Sun.

Carter-Ruck has specialised in the “no win, no fee” CFAs which have provoked widespread alarm in the media because they have the potential to double legal costs.

Under CFAs, lawyers can claim a “success fee” of 100 per cent if they win. The downside is they get nothing if they lose.

In the Sun case, Carter-Ruck acted on behalf of David Gazley, whose picture, supplied by a news agency, was wrongly used to identify a convicted paedophile who lived at the same flats in Great Yarmouth. The Sun said it had admitted liability, published an apology, offered damages of £10,000 and costs before Carter-Ruck became involved. It also immediately agreed after Carter-Ruck took up the case to publish apologies by way of adverts in the regional newspapers in the area Gazley lived.

Carter-Ruck’s bill for handling the case worked out as £800 per hour, including the 100 per cent uplift, for a partner.

Farrer & Co, who acted on behalf of News Group, argued before the costs judge that Gazley had no need to instruct London solicitors; and the success fee should be reduced as there had been little risk of Carter-Ruck failing to beat the £10,000 damages offered by The Sun.

The judge reduced Carter-Ruck’s fees to Norwich solicitors’ partner rates of £200 an hour rather than £400 and the success fee was cut to 20 per cent.

Nigel Tait, of Carter-Ruck, told Press Gazette that The Sun had run a second apology to Gazley with a photograph, upped his damages to £50,000 and agreed the regional adverts only after Carter-Ruck had taken on his case.

“The issue wasn’t Carter-Ruck’s costs but the fact that the judge didn’t think it was reasonable for Mr Gazley to instruct London solicitors and awarded us Norwich solicitors’ rates. It seems unreasonable to say he shouldn’t contact a London solicitor given what he was accused of. We are seriously considering whether to appeal.”

Nicholas Alway, partner in the media department of Farrer & Co, writing in this week’s Press Gazette, says of the judge’s ruling: “This might be seen as a rare victory for the media on CFAs, but it puts paid to the suggestion that all libel cases attract a success fee at 100 per cent. The court will form a view on a casebycase basis.”

By Jon Slattery

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