The family of murdered schoolgirl Milly Dowler have written to Prime Minister David Cameron urging him not to scrap the ‘no win, no fee’ rules which enabled them to take on News International.
Their lawyers were today understood to be close to finalising a £3m out-of-court with News International over the hacking of Milly’s phone in the weeks following her disappearance in 2002.
In letters sent to Prime Minister Cameron and his deputy Nick Clegg they said that they could not have afforded to pay the legal fees to take out a legal action. And they said they were particularly helped by the ‘after the event insurance’ system – which means that were insured against paying News International’s fees if they lost.
The Dowlers said in their letter to Cameron: ‘We were lucky that we fell under that system. We understand that the new law will affect thousands of people who want to sue News International and other papers.
‘We had understood that you were on the side of the people and not the press. Please do not change the law so that the ability to sue papers is lostâ€¦
‘We are sure that you do not want to go down in history as the Prime Minister who took rights away from ordinary people so that large companies could print whatever they liked and break the law without being able to challenge them.”
Lawyer Steven Heffer, who is representing 25 News of the World phone-hacking victims, said that the Legal Aid Bill – currently going through Parliament – will stop less well off individuals suing newspapers.
He said: “Instead of the loser in court claims paying as now, the successful claimant will have to fund a significant proportion of costs out of damages – and contrary to common perception damages in libel and privacy cases are generally very modest. The absence of ATE insurance will prevent most claimants from taking action against the media, unless they are willing to risk their home and face bankruptcy, in the event that the case is lost.”
The current no win, no fee system has been widely criticised because of the high costs it imposes on publishers. Success fees charged by claimant lawyers mean that the cost of losing a libel action at trial can run into several millions. Facing this potential risk, publishers are often forced to make early pragmatic settlements of cases they might win.
According to Heffer, the vast majority of those suing the News of the World for breach of privacy over phone-hacking are doing so under no win, no fee deals. He said he believes that proposals to limit success fees charged by claimant lawyers would be enough to fix the current system.