Ground breaking ruling in Matadeen v Associated Newspapers libel case

Associated Newspapers, represented by Taylor Wessing, has successfully obtained the first cost capping order against a claimant in a libel action.

Mrs Matadeen (the claimant) is being represented by her solicitors on a conditional fee agreement. It is common that these sorts of agreements provide that, if the claimant is successful, her lawyers will claim from the Defendant up to twice their standard costs.

Where a claimant has no after the event insurance (which will meet the defendant's costs if the claimant is unsuccessful) and is represented on a conditional fee agreement, defendants face the real and substantial risk that, if they are successful, the claimant will not be able to meet their costs. Equally, if the claimant is successful, the defendant will have to meet most of the claimant's costs plus a claim for an uplift on the costs of up to 100%. This scenario could have a chilling effect on freedom of speech.

The case is being referred to a costs judge who will decide the maximum level of costs (including any uplift) that the claimant may be able to recover from the defendants if she is successful. If the claimant's costs go beyond that level, the claimant will be responsible for these costs.

The ruling may well have the effect of putting off claimant firms from taking on some types of cases on a conditional fee basis.

Harvey Kass, Legal Director of Associated Newspapers Limited, comments:

"The conditional fee regime is out of control, probably unlawful and needs to be modified urgently.  Lawyers are using the inadequate rules to attempt to pressurise publishers from defending claims which are sometimes unjust.  When the cost of defending one article can equate to the cost of employing 100 journalists for a year, the consequences of freedom of expression are extreme.  Conditional fee claimants have no problem with their lawyers claiming £900 an hour because someone else is paying.  This landmark decision is just one small step towards correcting this situation."

Niri Shan, Media and Entertainment partner at Taylor Wessing, specialising in defamation, comments:

"Hopefully this decision will be the first step in the process of bringing proportionality on the issue of the costs recoverable by claimants under Conditional Fee Agreements."

The TW team comprised Niri Shan, Neil White and Lorna Caddy.