The Conditional Fee Agreements Order 2000 Art.4 allowed the use of a Conditional Fee Agreement (“CFA”) in all litigation except criminal, environmental and certain family proceedings. The maximum success fee was also fixed at 100%.
In this case the European Court of Human Rights (“ECtHR”) considered whether this Article breached the right to freedom of expression under the European Convention on Human Rights 1950 Art.10 (“Article 10”).
The facts of the case are well known. At trial Naomi Campbell (‘C’) was awarded £3,500 damages for breach of confidence following Mirror Group Newspapers’ (“MGN”) publication of articles concerning C’s drug addiction therapy. C was awarded her costs which amounted to over £1 million, almost £290,000 of which was attributable to a 95% success fee for her solicitors and a 100% success fee for her counsel payable under CFA’s. On appeal MGN sought a ruling that it should not be liable to pay the success fees on the basis that they were so disproportionate that it would infringe their right to freedom of expression under Article 10. The House of Lords dismissed the appeal, holding that the CFA scheme was compatible with the Convention  UKHL 61. MGN then appealed to the ECtHR alleging two violations of Article 10: (1) the substantive finding of a breach of confidence and (2) the requirement to pay the claimant’s success fees.
D failed on the substantive argument but the ECtHR held unanimously that the requirement MGN pay success fees to C was disproportionate and that, as a result, there was a violation of Article 10. The court held that the current CFA scheme was deeply flawed and exceeded the margin of appreciation accorded to the State in respect of general measures pursuing social and economic interests. The Court stated that this conclusion was clearly borne out by the facts of the case and the following points were made;
The ramifications of the decision are unclear. The decision is binding on the government but not on the courts and so it has no immediate domestic impact. Furthermore the ECtHR failed to determine whether only 100% recoverable success fees are in breach of Article 10, or whether any level of success fee sub 100% might be acceptable. Whether there is any knock on effect
Vaughan Jacob / 1st Mar 2011
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