Hilary Term [2017] UKSC 33 On appeals from: [2014] EWCA Civ 1574, [2016] EWHC 397 (QB) and [2016] EWHC 855 (Ch)

Times Newspapers Limited (Appellant) v Flood
Miller (Respondent) v Associated Newspapers
Limited (Appellant)
Frost and others (Respondents) v MGN Limited
Lord Neuberger, President
Lord Mance
Lord Sumption
Lord Hughes
Lord Hodge
11 April 2017
Heard on 24, 25 and 26 January 2017
Appellant (Times
Newspapers Ltd)
Respondent (Flood)
Richard Rampton QC James Price QC
Ms Kate Wilson William Bennett
(Instructed by Bates Wells
& Braithwaite LLP
(Instructed by Edwin Coe
Appellant (Associated
Newspapers Ltd)
Respondent (Miller)
Gavin Millar QC William McCormick QC
Ben Silverstone James Laughland
(Instructed by Reynolds
Porter Chamberlain LLP
(Instructed by Simons
Muirhead and Burton
Appellant (MGN Ltd) Respondents
(Frost and ors)
Lord Pannick QC Hugh Tomlinson QC
Jamie Carpenter Simon Browne QC
Jeremy Reed
(Instructed by Reynolds
Porter Chamberlain LLP
(Instructed by Atkins
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LORD NEUBERGER: (with whom Lord Mance, Lord Sumption, Lord
Hughes and Lord Hodge agree)
1. Each of these three appeals involves a challenge to an order for costs made
by a High Court judge against a newspaper publisher after a trial. In two of the
appeals, Flood v Times Newspapers Ltd and Miller v Associated Newspapers Ltd,
the trial involved an allegation that the newspaper had libelled the claimant; in the
third appeal, Frost and others v MGN Ltd, the trial involved allegations that the
newspaper had unlawfully gathered private information about the claimants by
hacking into their phone messages. In each case, the newspaper publisher lost and
was ordered to pay the claimants’ costs, and in each case the newspaper publisher
contends that the costs order infringes its rights under article 10 of the European
Convention on Human Rights. In Flood v TNL, the newspaper publisher also argues
that the order for costs made against it was outside the ambit of what a reasonable
judge could have decided.
2. In all three cases, the proceedings against the newspaper publisher had been
brought by claimants who were able to take advantage of the costs regime introduced
by the Access to Justice Act 1999 and reflected in the provisions of the relevant
Civil Procedure Rules then in force, in particular CPR 44. It is the provisions of this
regime (“the 1999 Act regime”) which found the basis of the contention that article
10 is infringed. The 1999 Act regime has now been largely replaced by a new
regime, and, although the new regime has no bearing on the awards of costs in the
present cases, it is of some relevance to the issues which have to be considered.
Accordingly, I shall start by briefly describing the 1999 Act regime and its
aftermath. I will then summarise the facts of each case before turning to the issues.
I will deal first with the article 10 issues which apply in all three cases, and I will
finally discuss the issue specific to Flood v TNL, which turns on its own facts.
The 1999 Act regime and its aftermath
The 1999 Act regime, Callery v Gray and Campbell v MGN
3. Around 20 years ago, the government decided to curtail the availability of
civil legal aid very substantially, and it appreciated that in order to do so a new
system had to be introduced if people who were not particularly well off financially
were to be able to enjoy access to legal advice and representation. After some, if
limited, consultation, the government introduced a Bill into Parliament which
became the 1999 Act. That statute severely cut down the availability of legal aid in
the field of civil law and introduced the 1999 Act regime instead.
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4. The 1999 Act regime was described in a little detail in the leading judgment
of this Court in Lawrence v Fen Tigers Ltd (No 3) [2015] 1 WLR 3485, paras 12-
25, and its background is more fully explained in paras 65-69 of that judgment. In
essence, under the 1999 Act and the rules made thereunder, a claimant could bring
proceedings on terms which involved (i) the claimant’s lawyers agreeing under a
conditional fee agreement (a “CFA”) to be paid nothing if the claim failed, but to be
entitled to receive up to twice their normal rates if the claim succeeded, and/or (ii)
the claimant taking out so-called after-the-event (“ATE”) insurance against the risk
of his having to pay the defendant’s costs (and on terms that the insurer was only
paid if the claim succeeded), and (iii) the claimant being able to recover from the
defendant the “success fee”, payable under the CFA, and the premium payable in
respect of the ATE insurance, as part of his costs if his claim succeeded.
5. The 1999 Act regime was considered by the House of Lords in two cases,
Callery v Gray (Nos 1 and 2) [2002] 1 WLR 2000, and Campbell v MGN Ltd (No
2) [2005] 1 WLR 3394. In the former case, which involved a successful personal
injury claim, the defendant challenged the level of success fee and the ATE premium
which had been held to be recoverable by the claimant, in circumstances where the
level of success fee had been reduced by the Court of Appeal. It was said that the
success fee was too high and that the ATE insurance had been taken out prematurely.
Both arguments failed. However, while accepting that the system introduced by the
1999 Act improved access to justice for claimants, all members of the panel were
plainly concerned about the possibility of abuse of the 1999 Act regime.
6. In Campbell (No 2), the newspaper publisher, MGN, which had lost a privacy
infringement claim and had been ordered to pay Ms Campbell’s costs, contended
that “they should not be liable to pay any part of the success fee on the ground that,
in the circumstances of this case, such a liability is so disproportionate as to infringe
their right to freedom of expression under article 10 of the Convention” – para 6, per
Lord Hoffmann. In para 22, he explained that this argument was based in part on the
disproportionality of the level of costs bearing in mind what was at stake in the
litigation, and in part on the fact that the particular claimant did not need to fund the
litigation with the benefit of a CFA and ATE insurance. Lord Hoffmann then
proceeded to reject both contentions in paras 23-28, and made the point that the 1999
Act regime had to be considered as a whole, because “concentration on the
individual case does not exclude recognising the desirability, in appropriate cases,
of having a general rule in order to enable the scheme to work in a practical and
effective way” (para 26). However, he went on to express considerable reservations
about the level of recoverable costs engendered by the 1999 Act regime in relation
to claims against the press.
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The Jackson Review, the Leveson Inquiry, and subsequent legislation
7. The concern about the 1999 Act regime expressed in those two cases had
started to become widespread by the time Campbell (No 2) was decided. In 2008,
the then Master of the Rolls, Sir Anthony Clarke, asked Sir Rupert Jackson to
investigate the costs of civil litigation, and this resulted in the Review of Civil
Litigation Costs: Final Report (December 2009), which was published in 2010. In
the Review, Sir Rupert was very critical of the 1999 Act regime, and proposed
substantial changes, most of which have now been implemented by and pursuant to
the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (“LASPO”), and
which (as a broad generalisation) apply to proceedings begun after 1 April 2013.
However, some of his proposals have not been adopted, although it is clear that the
implementation of a new regime to replace the 1999 Act regime is still work in
8. Some of the principal changes to the 1999 Act regime effected by LASPO
did not apply to defamation and privacy claims – see article 4 of the LASPO
(Commencement No 5 and Saving Provision) Order 2013 (SI 2013/77). Thus, such
claims are now an exception to the general rule which excludes the recoverability of
success fees and ATE premiums by successful claimants. (The only other current
exception is mesothelioma claims). This was justified by the fact that such claims
would be covered by other legislation. Another recommendation made by Sir
Rupert, namely qualified one-way costs shifting, has also been introduced, but only
to a limited extent, in that it only extends to personal injury claims, and therefore
does not apply to defamation or privacy claims.
9. However, certain changes introduced following Sir Rupert Jackson’s
“Review” do apply to defamation and privacy cases. They include more muscular
case management by the courts to deal with cases proportionately, costs budgeting
and costs management, which involve the parties and the court controlling the level
of recoverable costs at the start of the proceedings (see CPR 3.12(1)), costs-capping
(by virtue of PD 3F para 1), and new provisions which limit the level of overall
recoverable costs to what is proportionate (pursuant to CPR 44.3(2)(a)).
10. There are two other statutes which should be mentioned in the present
context. The Defamation Act 2013 contained provisions which afforded a degree of
substantive protection to potential defendants in defamation actions; however, that
statute did not deal with costs. The Crime and Courts Act 2013 (“the CCA 2013”)
on the other hand did concern itself with costs (among many other issues). The CCA
2013 was enacted in part to give effect to the recommendations of Sir Brian Leveson
in his An Inquiry into the Culture, Practices and Ethics of the Press (November
2012) (HC 780). Section 40 of the CCA 2013 (which is not in force) provided that
if a newspaper publisher became a member of an approved press regulator, it would
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have a measure of protection against an adverse costs order in any court proceedings
brought against it which could have been brought under the regulator’s arbitration
scheme, but any publisher which was not a member of such a regulator would be at
greater risk of adverse costs orders than before. The Government has launched a
public consultation as to whether section 40 of the CCA 2013 should be
implemented, and this has led to a sharp difference of views.
MGN v UK and Lawrence v Fen Tigers
11. Meanwhile, MGN was dissatisfied with the House of Lords’ decision in
Campbell (No 2), and applied to the Strasbourg court, who, on 18 January 2011,
decided that MGN’s article 10 rights were infringed by having to reimburse the
claimant the success fee and the ATE premium which Ms Campbell had incurred –
MGN v United Kingdom (2011) 53 EHRR 5 (“MGN v UK”). The Strasbourg court
acknowledged that the 1999 Act regime “sought to achieve the legitimate aim of the
widest public access to legal services for civil litigation funded by the private sector”
(para 197). However, at paras 207 to 210 of its judgment, the Strasbourg court
discussed a number of flaws in the system that Sir Rupert Jackson had identified in
his Review; to quote from Lawrence (No 3), para 43:
“The flaws were (i) the lack of focus of the regime and the lack
of any qualifying requirements for appellants who would be
allowed to enter into a CFA; (ii) the absence of any incentive
for appellants to control the incurring of legal costs and the fact
that judges assessed costs only at the end of the case when it
was too late to control costs that had been spent; (iii) the
‘blackmail’ or ‘chilling’ effect of the regime which drove
parties to settle early despite good prospects of a defence; and
(iv) the fact that the regime gave the opportunity to ‘cherry
pick’ winning cases to conduct on CFAs. At para 217, the court
concluded that:
‘… the depth and nature of the flaws in the system …
are such that the court can conclude that the impugned
scheme exceeded even the broad margin of appreciation
to be accorded to the state in respect of general measures
pursuing social and economic interests.’”
Accordingly the Strasbourg court held that the order for costs upheld by the House
of Lords in Campbell (No 2) infringed the article 10 rights of MGN. In a subsequent
judgment, the Strasbourg court awarded MGN compensation in a figure the precise
basis for whose quantification is impossible to assess – (2012) 55 EHRR SE9.
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12. In Lawrence (No 3), this Court had to consider the contention that a
substantial order based on the 1999 Act regime against unsuccessful defendants in
a nuisance claim was incompatible with their rights under article 6 of the Convention
(access to court) and/or article 1 of the First Protocol to the Convention (right to
property – “A1P1”). The Supreme Court rejected the argument that this contention
was supported by the reasoning of the Strasbourg court in MGN v UK. In the leading
judgment, Lord Dyson MR and I said that the criticisms of the 1999 Act regime in
MGN v UK were made in “the context” of the Strasbourg court’s “concern about the
effect of the scheme in defamation and privacy cases”, and that “the balancing of
the article 6 rights of [claimants] against those of [defendants] is an exercise of a
wholly different character”, and the same applied to A1P1 – para 52.
13. The leading judgment then went on to address the defendants’ further
contention that, even if MGN v UK was not of assistance to their case, the 1999 Act
regime, at least in so far as it applied in the case of Lawrence v Fen Tigers was
incompatible with their article 6 and/or A1P1 rights. After considering the question
in some detail, Lord Dyson and I rejected that contention also, concluding in para
“We accept that, in a number of individual cases, the scheme
might be said to have interfered with a defendant’s right of
access to justice. But … it is necessary to concentrate on the
scheme as a whole. The scheme as a whole was a rational and
coherent scheme for providing access to justice to those to
whom it would probably otherwise have been denied. It was
subject to certain safeguards. The government was entitled to a
considerable area of discretionary judgment in choosing the
scheme that it considered would strike the right balance
between the interests of appellants and respondents whilst at
the same time securing access to justice to those who would
previously have qualified for legal aid.”
A summary of the facts of each case
Flood v TNL
14. Mr Flood was a detective sergeant with the Metropolitan Police, although he
retired during the currency of these proceedings. Following an allegation of
corruption against him, a police investigation was begun in April 2006, and he was
suspended from his duties. On 2 June 2006, an article was published in the Times
newspaper, both in hard copy and on the Times website, suggesting that there were
strong grounds to believe that Mr Flood had been guilty of corruption. The
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investigation resulted in a report which was made available internally only in
December 2006, which found no evidence against Mr Flood, and he returned to his
duties that month.
15. In July 2006, Mr Flood instructed solicitors in connection with the
publication of the article, and in January 2007 they instructed junior counsel, who
entered into a conditional fee agreement (a “CFA”). In May 2007, Mr Flood issued
proceedings claiming damages for libel against the publisher of the Times, TNL. In
July 2007 TNL served its Defence advancing, inter alia, a defence based on (i)
justification and (ii) the principle in Reynolds v Times Newspapers Ltd [2001] 2 AC
127 – ie that, even if Mr Flood was innocent of any wrong-doing, the article had
been properly researched and was in the public interest (the “Reynolds defence”). A
Reply was served on behalf of Mr Flood in August 2007.
16. On 5 September 2007, TNL received a letter from the Metropolitan Police
informing them that Mr Flood had been exonerated by the investigation. Despite
this, TNL did not take down the story from the Times website. Between midSeptember and mid-November 2007, the parties tried to settle the claim in
negotiations which were expressed to be “without prejudice save as to costs”. When
those negotiations came to nothing, Mr Flood took out ATE insurance in connection
with his claim. In January 2007, he entered into a CFA with his solicitors and a
second CFA with junior counsel. He also entered into a CFA with leading counsel
in early 2010. Meanwhile, after procedural hearings and further attempts at
settlement, there was a four-day hearing before Tugendhat J of TNL’s Reynolds
defence. In a judgment given on 16 October 2009, he held that the defence
succeeded albeit only up to 5 September 2007 – [2010] EMLR 169. The Court of
Appeal allowed Mr Flood’s appeal, but the Supreme Court restored the judgment of
Tugendhat J – [2011] 1 WLR 153 and [2012] 2 AC 273. The parties have reached
agreement as to the costs of these two appeals.
17. The consequence of Tugendhat J’s judgment was that the only publications
of the article in respect of which Mr Flood’s case could succeed were those that
remained on TNL’s website after 5 September 2007. On 25 July 2013, Tugendhat J
gave judgment in favour of Mr Flood as to the meaning of the words used in the
article, and ordered TNL to pay Mr Flood’s costs of that issue – [2013] EWHC 2182
(QB). On 1 October 2013, TNL withdrew its defence of justification. Accordingly,
the way was clear for Mr Flood to succeed in his claim for damages in respect of the
continuing publication of the article on TNL’s website. Following a two-day
hearing, Nicola Davies J handed down judgment awarding Mr Flood £60,000
damages – [2013] EWHC 4075 (QB). In arriving at that figure, she took into account
the attitude of TNL in open correspondence with Mr Flood, which she described as
“aggressive and unpleasant”, and she said that it had “increased the distress and
anxiety of [Mr Flood]” – paras 27, 76. She also characterised TNL’s attitude as
“oppressive and high-handed” and concluded that it “serve[d] to aggravate the award
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of damages” – para 78. It is also worth mentioning that the Judge considered that
“TNL’s conduct meant that [Mr Flood] had no choice but to pursue these
proceedings in order to clear his name” – para 79.
18. There followed a hearing on costs, and Nicola Davies J ordered TNL to pay
all Mr Flood’s costs of the proceedings (other than those which had been the subject
of a prior order or agreement) – [2013] EWHC 4336 (QB). TNL’s appeal to the Court
of Appeal was dismissed – [2014] EWCA Civ 1574. TNL now appeals against that
19. In this Court, TNL runs two arguments. The first is that, despite the Court of
Appeal holding otherwise, the Judge’s order that TNL pay all Mr Flood’s costs was,
in all the circumstances “illogical, factually unsustainable and unjust”, to quote from
its printed case. Secondly, TNL argues that, relying on MGN v UK, the order for
costs, insofar as it requires TNL to reimburse Mr Flood any success fee or ATE
premium, constitutes an infringement of its article 10 rights, and should be set aside.
As already mentioned, I propose to deal with the first point at the end of this
Miller v ANL
20. On 2 October 2008, the Daily Mail published an article suggesting that Mr
Miller’s management consultancy had received “contracts … worth millions of
pounds of public money” as a result of “improper conduct and cronyism”. In
September 2009, Mr Miller instructed solicitors and counsel, all of whom entered
into CFAs, and he took out ATE insurance. In the same month, Mr Miller’s solicitors
issued proceedings for libel against the publishers of the Daily Mail, ANL. After
various discussions and a hearing as to the meaning of the article in question and the
issue of an amended particulars of claim, the claim was met by ANL with a formal
defence of justification, served in July 2010.
21. Thereafter, there were further discussions, during which Mr Miller warned
ANL that he would have to increase his ATE cover unless ANL agreed to limit their
recoverable costs if they were to win, a proposal to which they did not agree.
Accordingly, Mr Miller increased his ATE cover in June 2011 (and negotiated a
further increase in June 2012). In December 2011, Mr Miller offered to settle the
case for £18,000 pursuant to CPR Part 36, and this was met by an offer from ANL
in March 2012 in the sum of £5,000 with no apology. Following further discussions,
the case did not settle and there was a full trial before Sharp J. In her judgment given
on 21 December 2012, she rejected the defence of justification and awarded Mr
Miller £65,000 – [2012] EWHC 3721 (QB). As this exceeded the sum he had offered
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to accept, he was awarded his costs on a standard basis until January 2012 and on
an indemnity basis thereafter.
22. Mr Miller’s base costs (ie his costs ignoring any success fees or the ATE
premium) have been agreed at £633,006.08. However, he claimed in addition
£587,000 in respect of success fees and £248,000 in respect of his ATE premium.
While not challenging the reasonableness of these figures as such, ANL contended
that, following the reasoning in MGN v UK, it would infringe their article 10 rights
if they had to reimburse these sums. That issue was referred to Mitting J, who held
that he was bound by the reasoning in Campbell (No 2) to reject ANL’s arguments,
although he also said that reimbursement of the ATE premium was justified under
article 10(2) – [2016] EWHC 397 (QB). He granted a “leapfrog” certificate. The
issue on this appeal is whether this Court should reverse Mitting J’s order that ANL
should reimburse Mr Miller the success fees and the ATE premium.
Frost v MGN
23. A number of individuals had their phones hacked by MGN, the publisher of
the Daily Mirror, Sunday Mirror and the People. More particularly, this involved
MGN or its agents hacking, ie unlawfully listening to voicemails on mobile phones,
and blagging, ie masquerading as the individuals concerned or as other people
legitimately entitled to obtain telephone call data, and then MGN publishing articles
in its newspapers based on the information so obtained. Many of these individuals
began proceedings against MGN; they included eight “wave one” claimants, whose
claims were ordered to be heard together. Those claimants proceeded to the trial of
their claims, which succeeded, in sums varying between £72,500 and £260,250, for
reasons given by Mann J in a comprehensive judgment in May 2015 against whose
decision the Court of Appeal dismissed MGN’s appeal – see sub nom Gulati v MGN
Ltd [2016] FSR 12 and [2017] QB 149 respectively. The other 15 claimants settled
their claims prior to the hearing before Mann J. Each of the 23 claimants is entitled
to recover his or her costs from MGN.
24. On various dates between August 2011 and October 2014, each of the 23
claimants entered into CFAs with their lawyers, and 18 of them took out ATE
insurance. The parties were able to agree (subject to an issue on proportionality) as
to the reasonable base costs in each of the 23 cases, varying between £22,000 and
£210,000. The Costs Judge determined a reasonable success fee in each case,
varying between 25% and 100%, and the ATE premiums incurred by the claimants
varied between £13,515 and £87,450. MGN contended that, following the reasoning
of the Strasbourg court in MGN v UK, it would be an infringement of their article
10 rights to require them to reimburse the claimants the success fees or the ATE
premiums. Mann J rejected that argument – [2016] EWHC 855 (Ch). MGN was
granted a “leapfrog” certificate to appeal to this Court against that conclusion.
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25. Similar arguments arise in relation to the costs in the Court of Appeal, where
the claimants are seeking from MGN £739,456.87 by way of base costs,
£645,799.88 by way of success fees and £318,000 for their ATE premium.
Overview of issues and conclusions
26. As explained in para 19 above, the appeal in Flood v TNL raises a discrete
and case-specific issue, namely whether the first instance judge’s decision to award
Mr Flood all his costs of the proceedings (other than those which had already been
awarded or agreed) was a permissible exercise of her discretion, and I propose to
deal with that point at the end of this judgment.
27. The main focus of this judgment is on the issues raised in all three appeals
arising from the engagement of article 10 by the costs orders made by each first
instance judge. In that connection, there are four issues to be considered. The first is
whether, as ANL contends (with the support of TNL and MGN), the domestic law
should reflect the Strasbourg court’s decision in MGN v UK to the extent of laying
down a general rule (“the Rule”). That rule is that, where a claim involves restricting
the defendant’s freedom of expression, then at least where the defendant is a
newspaper or broadcaster, it would, as a matter of domestic law, normally infringe
the defendant’s article 10 rights to require it to reimburse the success fee and ATE
premium for which the claimant is liable under the 1999 Act regime. If we reject the
existence of the Rule, then the remaining article 10 issues fall away, whereas if we
accept its existence, those remaining issues are as follows.
28. The second issue is whether the effect of the Rule should be that the costs
orders made by Mitting J and Nicola Davies J in Miller v ANL and in Flood v TNL
respectively must be amended to exclude the defendant in each case paying the
success fee and the ATE premium for which the claimant is liable. The third issue
is whether the Rule could be relied on by MGN in Frost v MGN, so that the orders
for costs against MGN made by Mann J and by the Court of Appeal should be
amended to exclude any liability for the claimants’ success fees and ATE premiums.
The fourth issue is whether this Court should make a declaration of incompatibility
under section 4 of the Human Rights Act 1998 in relation to the 1999 Act regime,
or indeed the costs regime which applies following LASPO and the 2013 Act.
29. For reasons which are set out in paras 42 to 63 below, I consider that, even if
the answer to the first of those issues is that the Rule applies, so that it would
normally infringe a newspaper publisher’s article 10 rights to require it to reimburse
the claimant’s success fee and ATE premium under the 1999 Act regime in a case
involving freedom of expression, the orders for costs made in the three cases should
not be varied to remove the defendant’s liability for the claimant’s success fee and
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ATE premium. In those circumstances, I believe that it would not be appropriate to
express a concluded view on the first issue, because the party who would be, at least
potentially, most detrimentally affected by the decision is not before us. That party
is of course the United Kingdom government. If we were to conclude that the Rule
is part of domestic law, it would not technically bind the government, but it would
make it difficult for the government to re-open the question in this country, and it
could make it more difficult for the government to challenge the conclusion and
reasoning in MGN v UK in Strasbourg. Although we are not being asked to make a
declaration of incompatibility, a decision that the Rule applies but cannot assist the
appellants in the three appeals could have very similar consequences, and section 5
of the Human Rights Act 1998 requires the government to be notified if a declaration
of incompatibility is sought in any proceedings.
The article 10 arguments
Should MGN v UK be applied domestically?
30. I turn now to the issue of whether ANL’s (and TNL’s) article 10 rights are
infringed by the order for costs made by Mitting J (and Nicola Davies J). In this
section and the next section (starting with para 42 below) of the judgment, I shall
concentrate on Miller v ANL, as the article 10 argument was advanced in relation to
that appeal, but my comments apply equally to Flood v TNL.
31. It is, of course, open to a domestic court to refuse to follow the Strasbourg
court’s analysis and conclusion in MGN v UK, especially as it is a single decision of
one section of the Strasbourg court. It is not as if there is a number of section
decisions to the same effect or a decision of the Grand Chamber; it is also of some
possible relevance that there was no oral argument in MGN v UK.
32. However, there is undoubtedly a very powerful argument for concluding that
we should effectively follow the Strasbourg court’s approach in that case. The
judgment was full and careful, and the ultimate decision was based on a report which
was prepared by a senior United Kingdom judge and was largely acted on by the
UK government. The 1999 Act regime gave rise to some concern in the House of
Lords in Campbell (No 2) and was criticised in this court in Lawrence (No 2) [2015]
AC 106, para 37. The UK government did not try to have the decision in MGN v UK
reconsidered by the Grand Chamber. Indeed, the UK government relied on the
decision in MGN v UK to justify its initial decision to forbid recovery of success
fees and ATE premiums in defamation and privacy actions (see the Joint Committee
on Human Rights Legislative Scrutiny: Defamation Bill Seventh report of Session
2012-2013 (HLP84: HC 810), para 64). It also appears to have been assumed (albeit
without expressly deciding the point) by the five Justices in the majority in Lawrence
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(No 3) that MGN v UK represented the domestic law, and the conclusion reached by
the two dissenting Justices was based on the proposition that it did represent
domestic law.
33. Nonetheless, in a spirited and impressive argument on behalf of Mr Miller,
Mr McCormick QC contended that there were good reasons for this court to refuse
to follow the Strasbourg court’s decision.
34. I would reject his first argument, namely that the Strasbourg court merely
decided that the imposition of reimbursement of the success fee and the ATE
premium represented an infringement of MGN’s article 10 rights on the facts of the
particular case. It seems to me clear that the decision of the Strasbourg court was
based on the 1999 Act regime in principle. In paras 217 and 218, the court said that
it was “the depth and nature of the flaws in the system, highlighted in convincing
detail by the public consultation process, and accepted in important respects by the
Ministry of Justice” which led the court to “conclude that the impugned scheme
exceeded even the broad margin of appreciation to be accorded to the state in respect
of general measures pursuing social and economic interests” and that this
“conclusion is indeed borne out by the facts of the present case”. This does not mean
that article 10 is automatically infringed in every case involving freedom of
expression where an unsuccessful defendant has to reimburse the claimant the
success fee and ATE premium, but it does mean that it will normally be the case.
35. There is perhaps a little more force in the contention that the Strasbourg court
did not have regard to the wide range of civil cases to which the 1999 Act regime
applied. The Strasbourg court concentrated on civil claims where article 10 was
engaged, rather than looking at civil claims across the board, which were subject to
the 1999 Act regime. However, in my view, they were entitled, and arguably bound,
to do that. The principle that claims involving article 10 were in a special category
for present purposes was accepted by Lord Hoffmann in Campbell (No 2), para 19,
where he emphasised the importance of freedom of expression and the “special
position of the media as defendants to actions for defamation and wrongful
publication of personal information”.
36. There is more force in the contention that the Strasbourg court does not
appear to have taken into account that the 1999 regime could actually assist
defendants who wished to defend claims involving article 10, as they could enter
into CFAs and take out ATE insurance, as pointed out in Lawrence (No 3), para 68.
It is also a fair criticism of the judgment in MGN v UK that the Strasbourg court
accepted at para 208 the argument that under the 1999 Act regime, “there was no
incentive on the part of a claimant to control the incurring of legal costs on his or
her behalf”. In fact, in many cases claimants could often find themselves liable for
at least some costs which were held to be irrecoverable from the defendants, and in
Page 13
other cases the defendants might not be financially able to meet a costs order, which
would leave a claimant out of pocket. Another criticism of the judgment in MGN v
UK which has some, if limited, force is in relation to its reliance on the “blackmail”
effect of the 1999 Act regime (in para 209). In most cases, a claimant under that
scheme will have ATE insurance which would reduce this factor significantly by
allowing a successful defendant to recover its costs (and the cases cited in footnote
73 to para 209 were cases where the claimant had not taken out ATE insurance).
37. Although the points discussed in the immediately preceding paragraph have
some force, it seems to me that they are not particularly powerful. They represent
qualifications to some of the factors relied on by the Strasbourg court, but it seems
to me unlikely that they would have caused the Strasbourg court to reach a different
conclusion if they had been raised. However, there are other points relied on by Mr
38. In particular, it is argued that events after the decision in MGN v UK justify
this Court not applying the reasoning in that decision. There is nothing in this point
in so far as it relies on changes in the law – ie the changes which have been made by
and pursuant to LASPO and which have been mooted in the CCA 2013. Those
changes do not apply to any of the instant three cases, and there is therefore no basis
for relying on them to justify the regime which does apply.
39. However, there is somewhat more force so far as other matters which
occurred after the decision in MGN v UK are concerned: they provide some support
for the notion that the 1999 Act regime could reasonably have been thought to be
the least bad option to enable access to justice in relation to defamation and privacy
claims. Thus, the UK government failed to persuade the House of Commons to
include in the Defamation Act 2013 a provision which reduced the potential
exposure of defendants to costs in defamation and privacy actions. And the Joint
Committee in its report referred to in para 32 above expressed concern about any
“change to CFAs and ATE” as it “may prevent claimants and defendants of modest
means from accessing the courts, a particularly pertinent concern when the action is
one of defamation” – para 68. Sir Brian Leveson’s Inquiry expressed similar
concerns at Part J, Chapter 3, paras 3.7 and 3.13, suggesting that simply removing
recoverability of success fees and ATE premium would risk “turning the clock back
to the time when, in reality, only the very wealthy could pursue claims [for
defamation or breach of privacy]”.
40. These points demonstrate the difficulty in which the government found itself
after deciding to reduce drastically the availability of legal aid, while wishing to
ensure access to justice. The exclusion of defamation and privacy cases from some
of the major changes effected by LASPO and the politically controversial nature of
section 40 of CCA 2013, and indeed the decisions in Campbell (No 2) and MGN v
Page 14
UK, demonstrate the even greater difficulties involved in balancing access to justice
for claimants and the article 10 rights of defendants in such actions.
41. I rather doubt, however, that these points, even taken together with the points
made in para 36 above, would justify a domestic court refusing to follow the
reasoning and conclusion of the Strasbourg court. The Strasbourg court accepted
that the government enjoyed a “broad” or “wide” margin of appreciation in this
connection. However for reasons which were largely sound and reflected Sir Rupert
Jackson’s criticisms, and which have led to significant changes and projected
changes as explained above, the court decided that the article 10 rights of MGN had
been infringed. However, as explained in para 29 above, I consider that we should
leave the point open, and proceed to the remaining article 10 issues on the
assumption that we should follow MGN v UK, and so the Rule as defined in para 27
above does apply.
Would the Rule prevent Mr Miller and Mr Flood recovering the success fee and ATE
42. As just explained, in this and the next section of this judgment (starting at
para 57), I am assuming that the effect of MGN v UK is that, where a claim involves
restricting a defendant’s freedom of expression, it would normally be a breach of its
article 10 rights to require it to reimburse the claimant any success fee or ATE
premium which he would be liable to pay. Even if that contention is correct, it is
argued on behalf of Mr Miller (and Mr Flood) that it would be wrong to invoke it to
deprive him of the ability to recover from ANL (and TNL) the success fee and ATE
premium for which he is liable to his legal advisers and ATE insurers respectively.
43. If the Rule applies, it was effectively conceded on behalf of Mr Miller that,
in the absence of any good reason to the contrary, it would mean that this Court
should ensure that any order for costs should not impose such a liability on ANL.
That is because section 6(1) of the Human Rights Act 1998 provides that it is
“unlawful for a public authority to act in a way which is incompatible with a
Convention right”, and subsection (3) provides that “public authority” includes “a
court or tribunal”.
44. I am prepared to proceed on the basis that this concession is correct, although
it may be that Mr Miller could have invoked section 6(2) of the Human Rights Act,
which provides:
“(2) Subsection (1) does not apply to an act if
Page 15
(a) as the result of one or more provisions of primary
legislation, the authority could not have acted
differently; or
(b) in the case of one or more provisions of, or made
under, primary legislation which cannot be read or given
effect in a way which is compatible with the Convention
rights, the authority was acting so as to give effect to or
enforce those provisions.”
On the face of it, this does not assist Mr Miller, as the primary legislation merely
provides that an order for costs “may, subject in the case of court proceedings to
rules of court, include” any success fee or ATE premium payable by the party in
whose favour a costs order is made – see section 58A(6) of the Courts and Legal
Services Act 1990, as inserted by section 27 of the 1999 Act, and section 29 of the
1999 Act, set out in Lawrence (No 3), paras 16 and 17. Accordingly, there is obvious
force in the point that the provisions which would have the effect of infringing the
article 10 rights of ANL in the instant case are in the CPR and Practice Directions
(whose relevant provisions are set out in Lawrence (No 3), paras 19 to 25), and they
can, indeed, at least normally, should, be disapplied by a court to the extent that they
infringe the Convention. However, all these provisions are part of a single statutory
scheme, as Lord Dyson MR and I explained in Lawrence (No 3), paras 76-78, and it
may be arguable that section 6(2) of the Human Rights Act could be invoked on the
basis that disapplying provisions which enable Mr Miller to recover the success fee
and ATE premium from ANL would “imperi[l] the whole scheme which had been
put in place by the 1999 Act” to quote from Lawrence (No 3), para 78. It is right to
add that Lord Clarke’s view as expressed in para 136 of his dissenting judgment in
that case (with which Lady Hale agreed) is to the contrary. Whatever the right
analysis, I am prepared to proceed on the basis that, if the Rule applies as a matter
of domestic law, ANL would in the absence of a good reason to the contrary, be
entitled to require the costs order made by Mitting J to be amended so as to remove
the success fee and ATE premium from the scope of that order.
45. On behalf of Mr Miller it is argued that there is a good reason to the contrary,
in that, if we were to order that ANL should not have to pay the success fee or the
ATE premium for which Mr Miller is liable, we would be wreaking a plain injustice
on him. He embarked on his claim against ANL, and in particular he incurred
liabilities to his lawyers for any success fee and to his insurer for the ATE premium,
in the expectation that, if the claim succeeded and he obtained an order for costs,
ANL would be liable to reimburse not only the base costs but also the success fee
and ATE premium. And he did so in 2009, to the knowledge of ANL and at a time
when that expectation not only reflected the law according to the relevant legislation
(ie the 1999 Act and the consequential provisions of the CPR), but also when that
Page 16
law had been held by the House of Lords in Campbell (No 2) to be consistent with
the Convention, and in particular with article 10.
46. In this connection, I consider that it would not simply be a plain injustice on
Mr Miller to deprive him of the ability to recover the success fee and the ATE
premium; it would in my view infringe his rights under A1P1, and that is a factor
which can, indeed which must, be taken into account when considering how to
dispose of ANL’s appeal. That view derives direct support from the concurring
judgment of Lord Mance (with whom Lord Carnwath agreed) in Lawrence (No 3),
para 106, where he said that claimants who had entered into a CFA and taken out
ATE insurance under the 1999 Act regime must “have had a legitimate expectation
that the system would apply and be upheld”, especially as “appellate courts have
repeatedly endorsed the system”. Accordingly, he said:
“[The claimants’] legitimate expectation that the system would
be enforced is one which falls to be taken into account at the
present stage [ie when deciding whether to extend the costs
order to payment of the success fee and ATE premium] and is
not merely a matter that might (being itself a protected
possession within A1P1) be raised as against the United
Kingdom in Strasbourg.”
47. Support for the notion that Mr Miller can rely on A1P1 in the instant
circumstances appears to me to be found in the discussion on A1P1 in Simor and
Emmerson on Human Rights Practice para 15.010, which includes the proposition
that “where in reliance on a legal act, an individual incurs financial obligations, he
may have a legitimate expectation that that legal act will not be retrospectively
invalidated to his detriment”. Strasbourg jurisprudence also supports this
proposition. Pine Valley Developments v Ireland (1991) 14 EHRR 319, Pressos Cia
Naviera SA v Belgium (1995) 21 EHRR 301, and Stretch v United Kingdom (2003)
38 EHRR 12 are all cases where the applicant’s disappointed legitimate expectation
of a legal right was held to justify his A1P1 claim. In Pine Valley (assumed validity
of a planning permission) and Stretch (assumed validity of a contractual option), the
basis of the claim was not as strong as here, where it is based on primary legislation
whose validity was approved by the Law Lords; on the other hand, both cases related
to loss of land-related rights rather than a money claim. Pressos provides a closer
analogy for present purposes, as it involved retrospective amendment of legislation
which deprived the applicant of an accrued statutorily based claim for damages.
48. Having said that, not all retrospective deprivations of accrued rights will
offend A1P1. As the Strasbourg court pointed out in Pressos, para 38, the question
of proportionality will normally arise, and this typically involves balancing “the
demands of the general interest of the community and the requirements of the
Page 17
protection of the individual’s fundamental rights”. Even bearing that factor in mind,
I find it very difficult to see how Mr Miller’s A1P1 claim could be defeated.
Parliament did not see fit to render the LASPO regime retrospective: on the contrary,
as explained above, the 1999 Act regime applies to all proceedings begun before 1
April 2013. Parliament thereby correctly recognised that, while the 1999 Act regime
was unsatisfactory, it would be wrong to disapply it to proceedings which had been
issued in the expectation that that regime would continue to apply to those
49. In addition to A1P1, although this was not raised in argument, it seems to me
that, especially given that the purpose of the 1999 Act regime (as the Strasbourg
court accepted in MGN v UK at para 197) was to enable people to get access to the
courts, to hold that Mr Miller could not recover the success fee and the ATE
premium could infringe his rights under article 6 of the Convention. As Lord Dyson
MR and I said in Lawrence (No 3), para 77, recovery of success fee and ATE
premium was “integral to the means of providing access to justice in civil disputes
in what may be called the post-legal aid world”, and “necessary in order to secure
access to justice”, so that “[i]f it were otherwise, there would have been a real danger
… that litigants who previously qualified for legal aid would have been
unrepresented and the fundamental and legitimate aim of the 1999 Act scheme
would have been frustrated”.
50. In MGN v UK at paras 142 and 199, the Strasbourg court unsurprisingly
accepted that a claimant’s article 6 rights were engaged in a case such as Miller v
ANL. In those circumstances, given that the 1999 Act regime was intended to enable
potential claimants to obtain access to the courts, and that the recoverability of the
success fee and ATE premium was an essential ingredient of the regime, it appears
to me that a decision which deprives a successful claimant of the right to recover
such sums retrospectively would probably serve to infringe his article 6 rights. I note
that in Stankov v Bulgaria 49 EHRR 7, paras 53 and 54, the Strasbourg court
accepted that “the imposition” on a successful claimant of “a considerable financial
burden due after the conclusion of the proceedings” infringed his article 6(1) rights
even though he “had ‘access’ to all stages of the proceedings”.
51. Further, it may be that such a decision would infringe Mr Miller’s article 8
rights as well, given that the purpose of his bringing the proceedings was for the
purpose of restoring or maintaining his personal dignity.
52. However, no argument based on article 6 or article 8 was raised at all on
behalf of Mr Miller (or Mr Flood). In those circumstances, I prefer to base my
conclusion on Mr Miller’s A1P1 right not to be deprived of his accrued rights and
his legitimate expectations.
Page 18
53. It follows from all this that upholding Mitting J’s costs order would infringe
ANL’s article 10 rights for the reasons given by the Strasbourg court in MGN v UK
and would therefore involve an injustice, but amending that costs order in the way
sought by ANL would not only involve an infringement of Mr Miller’s A1P1 rights:
it would undermine the rule of law. It is a fundamental principle of any civilised
system of government that citizens are entitled to act on the assumption that the law
is as set out in legislation (especially when its lawfulness has been confirmed by the
highest court in the land), secure in the further assumption that the law will not be
changed retroactively – ie in such a way as to undo retrospectively the law upon
which they committed themselves. To refuse the costs order which Mr Miller seeks
would directly infringe that fundamental principle. While freedom of expression is,
of course, another fundamental principle, it is not so centrally engaged by the issue
in this case: the decision in MGN v UK is essentially based on the indirect, chilling,
effect on freedom of expression of a very substantial costs order.
54. In these circumstances, whether we allow or dismiss this appeal, a
Convention right would be infringed. When deciding what to do in such
circumstances, section 6 of the Human Rights Act does not assist ANL any more
than it assists Mr Miller. However, section 8(1) of that Act seems to me to be in
point. It provides:
“In relation to any act (or proposed act) of a public authority
which the court finds is (or would be) unlawful, it may grant
such relief or remedy, or make such order, within its powers as
it considers just and appropriate.”
It appears clearly to follow from this that the “just and appropriate” order is to
dismiss ANL’s appeal because to allow the appeal would involve a graver
infringement of Mr Miller’s rights than the infringement of rights which ANL will
suffer if we dismiss the appeal.
55. It is right to record that we were pressed with the argument that Mr Miller
would not in fact suffer if the costs order did not entitle him to recover the success
fee or ATE premium, because his lawyers and insurance company would not in
practice press for payment of, respectively, the success fee or ATE premium, if they
knew that he could not recover them from ANL. That was an argument which was
also raised in Lawrence (No 3), and it was rejected – see the first point discussed in
each of paras 91 and 92. In any event, it must be at least arguable that lawyers who
conducted their professional practices on the basis that the 1999 Act regime was
lawful, could claim that their A1P1 rights were infringed if they were, in practice,
deprived of their success fees by a determination that the CFAs into which they had
entered into with their clients were not fully enforceable.
Page 19
56. In summary, then, in the present case either ANL or Mr Miller has to suffer
an injustice (including infringement of Convention rights), and it is clear to me that
it should be ANL that suffers, as the injustice on Mr Miller would be significantly
more substantial. Accordingly, I would dismiss the appeal in Miller v ANL, and, at
least on the article 10 ground, the appeal in Flood v TNL.
If MGN v UK applies, can Ms Frost recover the success fee and ATE premium?
57. The claimants’ argument in Frost v MGN to the same effect as that just
discussed in Miller v ANL is weaker in that they all entered into CFAs and took out
ATE insurance after publication of the judgment of the Strasbourg court in MGN v
UK. Despite that, I would reach the same conclusion as in Miller v ANL.
Notwithstanding the judgment in MGN v UK, until LASPO came into force, the
1999 Act regime, as approved by the House of Lords in Campbell (No 2), was lawful
in domestic terms, and, with all its flaws, it represented the domestic policy whereby
citizens could get access to the courts to vindicate their civil legal rights. Parliament
could have enacted that decisions of the Strasbourg court had direct effect on UK
law, but, for good reasons, it did not do so: such decisions are, of course, simply to
be “take[n] into account” by a UK judge when they are “relevant to the proceedings”
before him or her – see section 2(1) of the Human Rights Act.
58. However, in my view, there is another, more fundamental, reason why it is
not open to MGN to rely on the Rule when it comes to the costs orders in Frost v
MGN. In order to rely on the Rule, MGN would have to establish that the principle
laid down in MGN v UK applies in cases where information is obtained illegally by
or on behalf of a media organisation. Although I accept that article 10 is engaged in
such a case, I cannot accept that the Rule can have any application, at least on facts
such as those in Frost v MGN.
59. When it comes to a costs order in a successful claim against a media
organisation in proceedings where the 1999 Act regime applies, there are two
applicable principles at play. The first is that, where article 10 is not engaged, there
is normally no Convention basis for refusing to order an unsuccessful defendant to
reimburse the claimant’s success fee and ATE premium – see Lawrence (No 3). The
second principle is that in such proceedings where article 10 is engaged, the Rule
applies and so it is normally a breach of such a defendant’s Convention rights if he
is required to pay the success fee and ATE premium.
60. In Frost v MGN, the court was not merely concerned with the complaint that
MGN had published, or threatened to publish, information which infringed the
claimant’s privacy rights. It was also concerned with the complaint that the
Page 20
information in question had been obtained unlawfully by or on behalf of MGN.
Thus, as Mann J said in his judgment at [2016] FSR 12, paras 1, 13 and 702,
“In all [eight] cases the infringements of privacy rights were
founded in what has become known as phone hacking, though
there are also claims that confidential or private information
was also obtained in other ways (principally from private
investigators). In all cases except [one], there is also a claim
that infringements of privacy rights led to the publication of
articles in the various newspapers just described, which articles
were themselves said to be an invasion of privacy rights and
which would not have been published but for the earlier
invasions which provided material for them. …
[T]he claimants make claims which are said to fall into three
main categories – wrongfully listening to private or confidential
information left for or by the claimant, wrongfully obtaining
private information via private investigators, and the publication
of stories based on that information. MGN admits all those
activities …
None of the articles in respect of which I have awarded
compensation would (on the admitted case) have been
published had it not been for the underlying prolonged phone
hacking that went on, which was known to be wrongful. That
hacking existed in all cases whether or not an article resulted.
The length, degree and frequency of all this conduct explains
why the sums I have awarded are so much greater than
historical awards. People whose private voicemail messages
were hacked so often and for so long, and had very significant
parts of their private lives exposed, and then reported on, are
entitled to significant compensation.”
61. When the Judge assessed damages, he awarded seven of the eight claimants
separate sums for (i) hacking, (ii) blagging, and (iii) (save in one case) publications,
(iv) general distress, and (v) (in one case) aggravated damages. The remaining
claimant, who was subjected to hacking and blagging, but not publication, was
awarded a single figure which included a modest sum for aggravated damages. The
awards of these sums were upheld by the Court of Appeal, in a judgment which
includes a schedule which sets out the details of the damages awarded to each of the
eight claimants.
Page 21
62. I accept that this is a case where MGN’s article 10 rights are engaged, in the
sense that an aspect of the complaints of most of the claimants is that their private
information was published in MGN newspapers. However, to treat this case as one
where the newspaper publisher’s article 10 rights are not merely engaged, but should
be given anything like the sort of weight which they were given in MGN v UK seems
to me quite unrealistic. The fundamental complaint of all the claimants is that their
phone records were unlawfully hacked or blagged by agents of MGN on a persistent
and systematic basis. It is true that this hacking and blagging was done with a view
to obtaining information which might be published in MGN’s newspapers.
However, this was not a case where there can be any suggestion of MGN or its
agents even hoping, let alone intending or expecting, that the end would justify the
means, as might be the case where unlawful means are used in the expectation, or
even the reasonable hope, that it may yield information which it would be in the
public interest to reveal. The claimants were generally celebrities, footballers,
television personalities and the like; people whose private lives may be of interest
to the public, but the revelation of whose private lives is not normally in the public
63. I accept that the courts must be careful before deciding that a particular case
of this sort involves newsgathering whose nature is so extreme as to lie outside the
territory which should be subject to the Rule. However, bearing in mind the
persistence, pervasiveness and flagrancy of the hacking and blagging, and the lack
of any public significance of the information which it would be expected to and did
reveal, it appears to me that this is not a case where the Rule can properly be invoked
by MGN. As the Strasbourg court explained at para 201, its decision that the liability
for costs in MGN v UK offended article 10 was based on the proposition that “the
most careful scrutiny on the part of the Court is called for when measures taken by
a national authority are capable of discouraging the participation of the press in
debates over matters of legitimate public concern”. I cannot accept that such a
proposition applies in relation to claims based on a defendant’s unlawful hacking
and blagging of the phone records of individuals such as the 23 claimants in Frost v
A declaration of incompatibility?
64. For the reasons given in para 29 above, it would be inappropriate to grant a
declaration of incompatibility. In addition, it would not be right to grant such a
declaration in relation to legislation which contains the 1999 Act regime, because
that regime has been superseded by other legislation, including LASPO, the
Defamation Act 2013 and CCA 2013. And it would plainly be inappropriate even to
consider making a declaration of incompatibility in relation to those statutes, as their
effect does not need to be, and was not, considered in any detail in order to dispose
of the instant appeals.
Page 22
The exercise of the Judge’s discretion in Flood v TNL
65. The final issue is whether TNL is right in its contention that, in ordering it to
pay Mr Flood’s costs of the proceedings (other than those costs which had already
been the subject of an order of the court or agreement between the parties), Nicola
Davies J acted outside the ambit of her discretionary powers. This is not a point
which would normally come before this court: it is a one-off issue relating to the
exercise of a discretionary power where the first instance judge’s decision has been
upheld by the Court of Appeal. It is only before this Court because the article 10
issues in relation to the costs order are before us, and it seemed sensible not to shut
out TNL from pursuing its contention that Nicola Davies J had erred in principle
when making that order.
66. The Judge formed the view that, as Mr Flood had established that he had been
defamed and had obtained an order for substantial damages, “the starting point” was
that he should have his costs, and there was no reason to depart from that position.
She thought that this conclusion was supported by the fact that Mr Flood had
vindicated his reputation, and she also considered that TNL’s attitude in open and
“without prejudice save as to costs” correspondence made it substantially harder for
the case to settle. TNL complains that the Judge wrongly concluded that she was
“not persuaded that there were good grounds to depart from” the starting point,
notwithstanding (i) the importance of freedom of expression, (ii) the “without
prejudice save as to costs” correspondence (“the correspondence”), (iii) the fact that
Mr Flood had fought the Reynolds defence and lost, and (iv) the fact that TNL had
successfully defeated the claim in respect of all publications apart from those posted
on TNL’s website after 5 September 2007.
67. In my judgment, the Court of Appeal was correct in holding that Nicola
Davies J made no error in her decision. She was clearly right to start with the
proposition that the prima facie position was that, as Mr Flood was the winner, he
therefore ought to get his costs. He had had to go to trial to vindicate his reputation,
when TNL had accused him of corruption and had maintained a plea of justification
for a substantial time, and to recover substantial damages, indeed substantially more
than he had offered to accept. As Sharp LJ put it in the Court of Appeal, “[t]he
outcome of the litigation could properly be described as a victory for Mr Flood”
(para 27). In those circumstances, as the successful party, “the general rule” set out
in CPR 44.2(2)(a) was that he should have his costs. However, as Nicola Davies J
rightly acknowledged, that is only the starting point. It is thus necessary to consider
whether any of the points raised on behalf of TNL justify its contention that the
Judge could not reasonably have refused to depart from that starting point.
68. First, the importance of freedom of expression. In my view, important though
freedom of expression undoubtedly is, it cannot assist TNL in its challenge to the
Page 23
unqualified order for costs made in favour of Mr Flood (save, of course, in so far as
MGN v UK assists its contention in relation to the success fee and the ATE premium
as discussed above). There are many cases in domestic courts and in the Strasbourg
court which emphasise the fact that potential and actual defamation actions have an
inhibiting effect on freedom of speech, and the consequent need for the court to
scrutinise orders which it makes in that connection (see eg Derbyshire County
Council v Times Newspapers Ltd [1993] AC 534, 547F and 548D and Bladet Tromsø
and Stenaas v Norway (1999) 29 EHRR 125, para 64). However, save in exceptional
circumstances, it would be quite inappropriate to invoke that principle so that it
renders it more difficult for claimants in defamation actions to obtain access to
justice than claimants in other types of civil claim. As pointed out on his behalf, Mr
Flood also had rights: just as TNL’s rights are covered by the Convention (through
article 10) so were his (through article 8).
69. While such exceptional circumstances were found to exist in MGN v UK, it
is worth noting that no complaint was ever made about the level of base costs in
Campbell v MGN. And it is worth pointing out that, while, as already mentioned,
Lord Hoffmann emphasised the importance of freedom of expression and the
“special position of the media” in Campbell (No 2), para 19, he nonetheless refused
to accept that even requiring MGN to reimburse the success fee and ATE premium
payable by Miss Campbell offended freedom of expression.
70. Secondly, the correspondence. Although we were taken to the
correspondence in a little detail by counsel on behalf of each party, it is unnecessary
to consider it in any detail. As is not uncommon in such correspondence, there were
passages emanating from each side, which, at any rate with the benefit of hindsight,
would have been better omitted. More importantly, I can see nothing in that
correspondence which assists TNL’s challenge to the Judge’s award of costs. I
accept that some people might characterise the attitude revealed by Mr Flood in that
correspondence as intransigent, but I consider that description would be unkind.
TNL were adopting a very tough attitude in the correspondence; some people might
use a more critical adjective.
71. Thus, as in the open negotiations alluded to in paras 16 and 17 above, TNL
was making it very clear in the correspondence that it was maintaining its plea of
justification and would be taking steps to find witnesses to support that case. TNL’s
plea of justification would have involved showing that there were grounds to justify
a police investigation, and it was a plea which was of course eventually abandoned
after TNL lost on meaning. In addition, TNL suggested that Mr Flood would be
likely to be financially ruined by the costs if he proceeded with his claim and lost,
whereas TNL could easily take such a risk if it lost; the Judge not unfairly described
TNL’s approach as involving “unsubtle threats” (para 20). It is fair to emphasise that
nothing said on behalf of TNL in the correspondence was improper, but, if the
correspondence is to be relied on in relation to the issue of costs, in my view, and in
Page 24
agreement with the Judge (who described TNL’s approach as involving a “die-hard
attitude”: para 20), it was undoubtedly TNL’s negotiating stance far more than that
of Mr Flood which prevented the claim from being settled. On any view, it is
impossible to suggest that it assists TNL’s case on costs. Indeed, in my view the
Judge was entitled to regard TNL’s attitude in the open discussions and in the
correspondence as a reason which militated against departing from the prima facie
position, namely an unqualified costs order in favour of Mr Flood.
72. Thirdly, the Reynolds defence. It is true that Mr Flood contested TNL’s
Reynolds defence case very strongly. In so far as the costs attributable to that issue
going to appeal are concerned, they have been disposed of by agreement or by court
orders. As to the success of the Reynolds defence it was, as Nicola Davies J pointed
out, “no clear-cut win for [TNL]”, as the defence failed in relation to the continuing
website publication after 5 September 2007.
73. In any event, Tugendhat J, whose experience in this field was unrivalled,
refused to make a costs order in favour of TNL following his judgment on the
preliminary issue as to the availability of the Reynolds defence, on 25 July 2009
after a four day trial. He said that “having regard to the way the matter has been
contested, I see no reason to doubt that the defendant would have conducted the trial
of the preliminary issue very substantially, if not identically, to the way in which
they did, even if the claimant had conceded that qualified privilege was a defence in
respect of the print publication, and even if they had conceded it was a defence in
respect of some of the website publications”. To much the same effect, Nicola
Davies J said that “the defences of Reynolds privilege and of justification could not
easily be separated” (para 21). In other words the costs of arguing the Reynolds
defence would have been incurred anyway.
74. Finally, there is the fact that Mr Flood was only partially successful. There
are, of course, cases where a claimant (or indeed a defendant) is successful, but the
success is partial or limited to an extent which would make it unreasonable to award
him all his costs. In the instant case, there is an initial attraction in the notion that
the fact that Mr Flood succeeded on the material posted on TNL’s website after 5
September 2007 but failed on the hard copy and website material published before
that date, means that there should be some amendment in TNL’s favour to the costs
order made by Nicola Davies J. However, as Sharp LJ said in the Court of Appeal
(para 41), the fact that TNL had “won on a significant part of the case, comprising
numerically the greater proportion of the publications” was a factor to be taken into
account when deciding what costs order to make, but the effect of that factor on the
eventual decision was a matter for the first instance judge. As she also said, on the
facts of this case, the first instance judge was entitled to resolve to award costs on
the basis that Mr Flood was the overall winner rather than making an issues-based
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75. It follows from this that all three appeals must be dismissed.