Press standards, privacy and libel - Culture, Media and Sport Committee Contents

Examination of Witnesses (Question Numbers 940-959)


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 easy.

  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 whole picture.

  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 of litigation.

  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 means-testing.

  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 is desirable.

  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 view.

  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.

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