Press Gazette has for many years now been an outspoken critic of Conditional Fee Agreements in libel cases.
But the case of Dr Peter Wilmshurst – which has become a touchstone for the Libel Reform Campaign – shows that CFAs are not always a bad thing.
CFAs were brought about under Labour’s access to justice reforms and work by allowing claimant lawyers to charge double to the losing side in order to compensate them for the risk of failure. In practice, this means newspapers stand to lose millions if they take a libel case to trial and hundreds of thousands in any case if they don’t settle fairly quickly.
This leads to a ‘ransom factor’. Even if you believe you are right, often you must settle because the risk of losing is so high. And even if publishers win at trial, they will probably lose financially- because claimants can seldom afford to pay newspapers’ own substantial costs.
Dr Wilmshurst is being sued by a US company over concerns he raised about the safety of a medical device. He has only been able to defend is reputation because his lawyer, Mark Lewis, has taken the case on a CFA.
As the current Government prepares to put out it its hotly anticipated Libel Reform Bill to consultation next March, Lewis cautions that we should not “throw out the baby with the bathwater” on CFAs.
He told Press Gazette: “Whilst there might be problems with libel costs, it is the underlying cost that causes the problem not the CFA uplift. As with all libel claims, the importance is the maintenance of the balance.
“The removal of CFA’s and the absence of public funding takes us back to a very sorry situation whereby only the super-rich can afford reputations – even if they don’t deserve them. What needs to be addressed is access to justice for both claimants and defendants.”
UPDATE: Press Gazette has learned that Law firm Carter Ruck, normally the scourge of publishers, is defending journalist Hardeep Singh on a CFA in his libel fight against an Indian holy man.