Regional newspapers are being forced into widespread “self-censorship” because of the huge financial risks posed by being sued under “no-win, no-fee” libel rules.
Media lawyer Tony Jaffa, from Foot Anstey, who advises many local newspapers on media law said it would have to be an ‘exceptional’libel case for any regional newspaper to defend it, because the cost implications are so serious that none of these smaller businesses can take the risk.
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‘When it comes to stories were there could be a defence under fair comment or the Reynolds defence – they can’t afford to take the risk,’he said.
‘If you look at personal injury cases, success fees for lawyers are around eight to 10 per cent. What I find really objectionable is the 100 per cent success fees in libel cases.”
Press Gazette is currently campaigning against Conditional Fee Agreements, because they enable claimant lawyers to effectively hold newspapers to ransom with the threat of costs which can escalate into the tens of thousands. They work by enabling lawyers to charge a 100 per cent ‘uplift’on their fees – meaning newspapers can end up paying them up to £1,000 an hour.
Jaffa claimed that because lawyers are signing claimants up with After the Event Insurance at the outset – to pay the other side’s fees in case they lose – newspapers are being handed a £10,000 to £15,000 bill to cover the cost of this premium even if they offer to settle cases immediately.
He said: ‘When it comes to investigative journalism in the regionals, it would have to be something really special to get approval, because the financial risks of getting it wrong are so severe.”
The Government is currently considering proposals to reform the CFA system and has heard representations from 22 media organisations calling for change.
The legal expert for regional press trade body the Newspaper Society, Santha Rasaiah, agreed that CFAs are a huge threat to local newspapers.
She said: ‘Alongside the national media, the regional press is pressing for far more radical reform than the Government has offered to date. Small media publishers are particularly vulnerable to the chilling effect of the CFA system. Any small title is going to think twice about running a story, or fighting an action against an unmeritorious claim, if the costs risks are so high that it could face closure.
‘Even if a title admits a mistake swiftly on receipt of a complaint, before any legal action is started – (and there is a long tradition in the regional press of editors swiftly and informally resolving complaints without need of legal intervention) – it could be faced with success fees and ATE premiums, in addition to any costs and damages, despite the lack of risk incurred by the claimant or their lawyers.’