Examination of Witnesses (Question Numbers
19 MAY 2009
Q940 Mr Hall: Could I explore with
you the issue of costs capping. The rules were changed in April
of this year, yet the judiciary seem to have taken a very cautious
approach to this particular attempt to control the costs that
a successful person in the case can claim against the losing person
in the case. Why has there been a cautious approach to this particular
change in the rules?
Sir Anthony Clarke: Well, I think
Rupert Jackson again is the man to ask because he chaired a working
group on the Civil Procedure Rule Committee on this very question.
Sir Rupert Jackson: Well, I am
not sure one can say whether or not a cautious approach has been
taken to costs capping by the judiciary since the new rules came
into force because, as Mr Hall rightly points out, the new rules
only came into force in April and I doubt, well, there may have
been some applications since then, but four weeks is a very short
time. Before April of this year, there were no rules governing
costs-capping. When costs-capping orders were made by the courts,
although there were no specific rules, they were using the general
case management powers given to the court by Part 3 of the Civil
Procedure Rules, and it is quite right that, over the years, the
courts have been very cautious in the exercise of the costs-capping
ability under Part 3. The reason is that the costs-capping process
is extremely expensive. There is an application with supporting
evidence, evidence put in in reply, then there is a hearing, possibly
an adjournment for further material and then possibly another
hearing, and then the assumptions upon which the costs cap has
been set may be invalidated because litigation may take an unexpected
course and then there could be an application to vary the cap.
Costs-capping, which is sometimes seen as a panacea for the problems
of excessive costs in litigation, can generate its own problems;
it can give rise to satellite litigation and yet further costs,
and there is a danger that, if costs-capping is undertaken too
freely, it will end up actually increasing the costs of litigation
rather than reducing the costs. The risks may be particularly
high in relation to defamation because, as Mr Justice Eady pointed
out in the Tierney case, defamation cases, perhaps more
than other civil litigation cases, have a habit of taking unexpected
and unforeseen turns. Therefore, the courts have generally adopted
a fairly cautious approach to costs-capping, and one of the issues
which I addressed in my report is whether a more expansive approach,
or a different approach, should be adopted to costs-capping, and
you will find this addressed in chapter 45 of my report. It is
one of the serious issues in this inquiry. Last year, when the
Rule Committee was looking at this matter, the Committee essentially
codified the existing approach of the courts, and the reason that
the Rule Committee adopted that cautious approach was that the
present fundamental review of civil litigation costs was about
to get under way and it was thought inappropriate to make any
substantial changes to the costs regime before the present review
had been completed.
Sir Anthony Clarke: If I could
just add a postscript to that, as I am sure you all know, at the
end of litigation, if there is a dispute about the amount of costs,
then there may be a detailed assessment. Now, the cost of a detailed
assessment can itself be very great. If you then focus on the
costs-capping process, that itself involves identifying what the
costs are likely to be and one way of doing that is to conduct
something close to a detailed assessment in advance. Now, if you
do that, you are then spending a lot of money assessing costs
which have not yet been incurred in circumstances where (a) everybody
knows that 95% or more of the cases are going to settle, so there
will never be a judgment, and (b) even where there is a judgment,
the vast majority of costs issues are resolved as well, so there
will never be a detailed assessment, but, if you are going to
have a costs-capping exercise in every case, it has to be very
carefully monitored. You would have to have, to my mind at least,
a very robust approach so that you did not spend too much money
on assessing the costs in advance because that would be another
example of the kind of satellite litigation which one is trying
to avoid, and that is really quite a serious problem and it is
not easy to have a robust system. It is all very well for the
judge to say, "Right, what shall we say£10,000",
it is very difficult and the more robust, the more you look at
the ceiling and hope for inspiration, the more you adopt that
approach, the more likely it is that later one side or the other
will say that the costs cap is inappropriate and then there will
be endless arguments about whether it is appropriate to reopen
the costs cap, so it is not easy. It sounds easy, but it is not
Q941 Mr Hall: Thank you for that,
and both of you have anticipated the next question as to why these
costs caps are not more regularly used. If I have understood what
you are saying, you are basically saying that, on face value,
costs-capping is a good idea, but the mechanism for doing it actually
adds costs to the case.
Sir Anthony Clarke: Well, there
is a real worry about that certainly. In the future, though, I
think we are thinking of better ways and maybe, when we have seen
Rupert's report at the end of the process, we will be able to
move forward or some sensible way forward will be found. Finally,
the Rule Committee in fact refused to introduce a specific costs-capping
rule in defamation cases for the reasons we have given, on the
footing that it would be better not to do it just for defamation,
but to consider the whole matter in the round when we have the
Sir Rupert Jackson: If I may add
one additional point to this, although costs-capping has the difficulties
mentioned by the Master of the Rolls, I am looking at another
approach to this problem, which will be a form of costs management
by reference to budgets on each side of the case. This is just
one of the many matters I am looking at, and it would entail that
the solicitors on each side provide their budgets to the court
with more detail than the rules currently require and the court
manages the case by reference to the budgets on both sides, if
and insofar as those budgets are reasonable. Now, this is one
of many matters I am looking at, it is discussed in chapter 48
of the report and, since that chapter was written, I have had
some intensive meetings developing the proposals in that chapter.
Whether this will be a feasible way forward or not, I do not know
at the moment, but it may be another approach to achieve what
is sought by costs-capping which generates the difficulties mentioned.
Q942 Mr Hall: Is it right to say
that, in some cases, you can cap the costs of just one side of
the argument, for example, the claimant? Is that correct?
Sir Rupert Jackson: You could
cap the costs of one side, but it would be more fair, or it is
more likely that the judge, in his discretion, would cap the costs
of both sides.
Q943 Mr Hall: On a slightly different
note, where we have got cases for defamation or privacy that involve
media organisations, what is your view about placing caps on those
costs so that we do not have the chilling effect where we see
people refusing to publish stories or they end up in fear of litigation?
Sir Rupert Jackson: Well, I think
that costs caps in defamation proceedings give rise to the same
difficulties as they give rise to in other forms of litigation.
The danger of costs-capping in defamation proceedings is that
you may end up increasing the costs rather than reducing them.
There are times when costs-capping is appropriate and the Civil
Procedure Rules, as amended last month, provide for costs-capping
in appropriate cases, both for defamation and all other areas
Q944 Paul Farrelly: I want to come
on to issues of jurisdiction and forum-shopping in a moment, but
your answer there regarding the examination of budgets begs the
often-asked question of whether claimants should be subject to
Sir Rupert Jackson: I myself see
considerable difficulty in devising a set of rules, the effect
of which would be that only persons who satisfy a particular means
test are entitled to instruct their solicitors and counsel on
a conditional fee agreement, and I see very considerable force
in the reasoning of the House of Lords. Whilst I am conscious
of the problems which CFAs with recoverable success fees and recoverable
ATE premiums generate, I am at the moment very doubtful that means-testing
would be the way to crack the problem; I think that I have got
to look for other solutions.
Q945 Paul Farrelly: I am sorry if
you have addressed that already, but I missed it. One alternative
approach, which has been suggested by editors of certain newspapers,
newspapers which are not involved in cheque-book journalism, shall
we say, is that an early judgment on the meaning would be very
helpful in defraying costs.
Sir Anthony Clarke: Well, the
courts have powers to take individual issues and to decide them
separately from the other issues and, as far as I am aware, it
is not uncommon to have a preliminary issue on the question of
meaning, and indeed I myself was involved, I seem to remember,
in an appeal in relation to meaning where the only question was
whether the meaning, which the claimant said the words had, was
a meaning which was open to that, so yes. It is an important feature
of all kinds of litigation, namely to try and identify key issues
which can be decided shortly and comparatively cheaply which will
then, hopefully, lead on to a settlement of the whole dispute,
so the answer is yes.
Q946 Paul Farrelly: Is there anything,
in your opinion, that could be done to facilitate that?
Sir Anthony Clarke: Well, I think
the rules sufficiently facilitate it already. If a defendant,
for example, says that the meaning suggested by the claimant is
a meaning that the words complained of could not have, then there
is nothing to stop that defendant going to the court and asking
the court to direct that that issue be decided as a preliminary
question, and these days, I would have thought, judges would be
keen to do that.
Q947 Paul Farrelly: Is that normally
then subject to appeal and then it potentially runs the risk of
costs running away?
Sir Anthony Clarke: Well, there
is, of course, a risk of that, but, if the resolution of that
question is going to lead to the settlement of the whole dispute
and, in effect, cut out any further dispute or costs, then it
Q948 Paul Farrelly: Is it used often
enough? Do judges
Sir Anthony Clarke: Well, I would
have thought they did. I cannot say that I have in front of me
the statistics in relation to how often that happens in defamation
cases, but it certainly does happen, I know that, and I can see
no reason why a defendant should not apply for such an order;
it seems very sensible in all sorts of cases.
Q949 Paul Farrelly: I want to move
on to jurisdiction. The issue of jurisdiction now has become very
noteworthy in some cases, but it is also more relevant because
of the march of the internet. Is it time that our libel laws moved
with the times and that we institute the single publication rule,
as they have in the United States?
Sir Anthony Clarke: Well, I do
not really think that is something for me to comment upon; that
is a matter of principle or policy, if you like, and it is a matter
for Parliament, but it does not seem to me that, as a judge, it
is appropriate for me to comment upon. I might have a personal
opinion as to what the answer to that should be, but, wearing
my present hat, it seems that it is a matter for you, if I may
say so, rather than me.
Q950 Paul Farrelly: But we take advice
from eminent and experienced people like yourselves on these questions.
Sir Anthony Clarke: I can quite
see that there are arguments in favour of it which have been put
very forcefully to you, and then there are arguments on the other
side which have been developed in some of the cases. After all,
you do not have to leave your material on the internet and, as
some judges have said in the past, "Well, if you do that,
you've only got yourself to blame because you could remove it
or qualify it and, if you choose not to, it may be that you do
it because you like", as one judge said, "the ubiquity
of the internet", so there are two sides to the question
and I think that a quite significant case could be made for either
Q951 Paul Farrelly: That is clearly
one issue as to whether someone does not have the commonsense
to take something down, once notified, but, if it has been there
for 10 or 15 years, it is still actionable, so, in those sorts
of instances, as a judge, which of the arguments, for or against
single publication, do you find most persuasive?
Sir Anthony Clarke: Well, I do
not think I am going to answer that!
Q952 Paul Farrelly: I can see that
I am not going to get any further with this! Clearly, it is a
matter of great concern to the likes of The Wall Street Journal,
Private Eye and some of our major newspapers, but how often
do issues of jurisdiction arise in libel cases, in your experience?
Sir Anthony Clarke: Certainly
from time to time, but certainly no more than in many other areas.
I spent my whole career really, before I went on to the Bench,
dealing with commercial litigation where a good proportion of
my practice was arguing about whether or not the particular dispute
should be heard in England or in Timbuktu or wherever, so I certainly
do not think it is, in the great scheme of things, particularly
significant, although I can see that it does cause concern, but
the principles are reasonably clear, I think, at present. To my
mind, I would have thought they worked perfectly well, but I can
see that there is a concern about forum-shopping.
Q953 Paul Farrelly: It comes back
to the question that it would be useful to have some data to get
this whole issue in perspective. Is there any data at all which
we can draw on?
Sir Anthony Clarke: I do not know.
It is possible that HMCS, the Court Service, might have data about
that. I quite agree, it would be helpful to have data. I personally
do not have it, but it may be that the Court Service would.
Q954 Paul Farrelly: Perhaps we can
follow that up and, likewise, data such as how many claims for,
if you will excuse my Latin, forum non conveniens there
have been and how many have been successful, that is data which
would be useful.
Sir Anthony Clarke: That is really
the same point. I would have thought that the people to go to,
as it were, would be the Court Service on that.
Q955 Paul Farrelly: We have met with
legislators in the United States who have been bringing, or attempting
to bring, in the laws both in New York and federally, and one
of the concerns is whether the UK courts have become an object
of ridicule for admitting the sorts of claims that we have seen
where Ukrainians are sued because the left side happens to be
accessible here. Is there any threshold at all that you can give
us some guidance on as to how the courts approach it or whether
our courts are the appropriate jurisdiction?
Sir Anthony Clarke: Well, the
general principle, I think, is this: that, if you have a case
where you can find the defendant within the jurisdiction so that
you can serve the proceedings on the defendant as of right within
the jurisdiction, then, on the face of it, you are entitled to
proceed with your action, unless the defendant persuades the court
that the action should be stayed on the grounds of, what I think
is usually called, "forum non conveniens" where
you have to persuade the court that the interests of justice make
it more just that the case be tried somewhere else. As I say,
I have spent many happy hours over the years arguing about just
that on one side or the other. The case is a bit different where
you cannot find the defendant within the jurisdiction because
then you need the permission of the court to serve the proceedings
on the defendant outside the jurisdiction, and then the onus of
proof is on the claimant to satisfy the English court that the
English court is the appropriate place to bring the action. Of
course, it could only do it, in any event, if the tort, in this
case the libel, was committed within the jurisdiction, so there
would have to be publication within the jurisdiction so that it
could be said that the tort was committed within the jurisdiction.
I think the approach, or my impression, though I cannot say I
am an expert in this, is that, if there has been a significant
publication within the jurisdiction, then, in the first class
of case anyway, the courts have ordinarily taken the view that,
if the claimant has found the defendant here, he ought to be entitled
to claim about an unlawful publication here, but, if it is a very
insignificant part of a worldwide publication, then the courts
will say, "No, this case ought to be tried elsewhere".
The only thing is, of course, that the law may be different here.
So, for example, the law of the burden of proof may be different
in relation to justification. The burden is on the defendant,
I think, to justify an alleged libel here, whereas the burden
may be on the other side in some other jurisdictions. I am not
talking about the European Union where of course there are strict
rules about jurisdiction.
Q956 Paul Farrelly: Well, that is
the nub of the issue, and the two words, "significant"
and "insignificant" are also the nub.
Sir Anthony Clarke: Well, these
are questions of judgment really and they depend upon the facts
of a particular case, which is what judges are for.
Q957 Paul Farrelly: If I just take
one particular case, the case which ultimately came before Mr
Justice Eady, or two cases, John Alexis Mardas v The New York
Times and the same claim against The International Herald
Tribune, the High Court struck those claims out on 10 June
last year. The claimant had permission to appeal in August and
then Mr Justice Eady upheld that appeal in December 2008 which
led, in January this year, to a large Private Eye article,
entitled, "English law is `Carter-Rucked'". I do not
know whether you are familiar with Mr Justice Eady's judgment
in that case.
Sir Anthony Clarke: I have read
it, but I do not think it would be at all appropriate for me to
comment upon the facts of a particular case. After all, there
might be an appeal and it might come to us judicially.
Q958 Paul Farrelly: It would appear
though from this case, from Mr Justice Eady's comments, that there
cannot be any threshold, given the law as it stands. He says,
"This cannot depend on a numbers game".
Sir Anthony Clarke: Well, obviously,
one would have to look in detail at his reasoning to see if it
was sound, but the losing party could, presumably, attempt to
appeal, if they were disappointed.
Q959 Paul Farrelly: Would statutory
guidance, and in what form, be helpful?
Sir Anthony Clarke: It would have
to be extremely carefully thought out, the statutory guidance.
I think one would have to look at the guidance to decide whether
it was helpful or not.