Times Newspapers Limited v Flood

A successful litigant who incurred conditional-fee success fees and after-the-event insurance premiums in reliance on the statutory costs regime could retain an order recovering them, notwithstanding an assumed interference with a newspaper publisher’s article 10 rights. Retrospectively depriving the litigant of accrued rights and legitimate expectations would infringe article 1 of the First Protocol and undermine the rule of law more seriously.

The protection given to media defendants against disproportionate costs does not extend to claims founded on persistent, systematic and flagrant unlawful newsgathering which lacked legitimate public significance. In determining ordinary costs, the successful-party rule remains the starting point. Partial success, overlapping issues, settlement conduct and the practical source of costs remain matters for the trial judge’s discretion.

Three newspaper publishers appealed against orders requiring them to pay costs incurred under the conditional-fee and after-the-event insurance regime established following the Access to Justice Act 1999. The publishers argued that liability for success fees and insurance premiums infringed article 10 of the European Convention on Human Rights.

In Flood, a former police officer had succeeded in libel concerning the continued online publication of an allegation of corruption. The Court of Appeal dismissed the publisher’s costs appeal: [2014] EWCA Civ 1574. In Miller, the claimant succeeded in libel and the High Court upheld recovery of the additional liabilities: [2016] EWHC 397 (QB). In Frost, claims arose from systematic phone hacking and other unlawful acquisition of private information; the relevant costs ruling was [2016] EWHC 855 (Ch).

The central issues were whether domestic law should adopt the rule stated in MGN v United Kingdom, whether that rule displaced the existing costs orders, whether it applied to unlawful newsgathering, and whether Flood’s unqualified costs order was a permissible exercise of discretion.

1. All three appeals were dismissed unanimously. Lord Neuberger gave the judgment, with which Lord Mance, Lord Sumption, Lord Hughes and Lord Hodge agreed.

2. The court left open whether domestic law should adopt the Strasbourg rule that requiring a media defendant to reimburse success fees and after-the-event premiums will normally infringe article 10 in litigation restricting freedom of expression. The issue should not be conclusively determined without the Government, whose interests and policy choices would be materially affected. The remaining issues were decided on the assumption that the rule applied.

3. That assumption did not justify removing the additional liabilities in Miller or Flood. The claimants had incurred them in reliance on legislation, procedural rules and the House of Lords’ approval of the regime. Their accrued rights and legitimate expectations were possessions protected by article 1 of the First Protocol. Retrospective deprivation would also undermine the rule of law. Under section 8(1) of the Human Rights Act 1998, dismissing the publishers’ appeals was just and appropriate because allowing them would cause the claimants the graver infringement. Possible article 6 and article 8 grounds were noted but did not form the basis of decision.

4. The Strasbourg rule was independently unavailable in Frost. Although article 10 was engaged by publication, the claims were fundamentally based on persistent, pervasive and flagrant hacking and blagging. The conduct sought private information lacking public significance and could not realistically be connected with participation in debate on matters of legitimate public concern. Courts should proceed cautiously before placing newsgathering outside the rule, but these extreme facts did so.

5. No declaration of incompatibility was appropriate. The Government had not been notified, the former costs regime had been superseded, and the replacement legislation had not been examined sufficiently to justify a declaration.

6. The full costs order in Flood was within the trial judge’s discretion. Under the general rule in CPR 44.2(2)(a), the successful party ordinarily receives costs, although that is only the starting point. Flood had vindicated his reputation and recovered substantial damages. The publisher’s negotiating stance militated against departure from the rule; the costs of its overlapping privilege and justification defences would largely have been incurred anyway; and the judge could treat Flood as the overall winner despite his partial success.

• United Kingdom Supreme Court: Dismissed all three publishers’ appeals and upheld the relevant costs orders: [2017] UKSC 33.
• Court of Appeal — Flood: Dismissed the publisher’s appeal against the costs order: [2014] EWCA Civ 1574.
• High Court — Miller: Held that existing domestic authority required recovery of the success fees and that recovery of the insurance premium was justified under article 10(2): [2016] EWHC 397 (QB). A leapfrog certificate was granted.
• High Court — Frost: Rejected the publisher’s Convention challenge to recovery of success fees and insurance premiums: [2016] EWHC 855 (Ch). A leapfrog certificate was granted.
• High Court — Flood: Ordered the publisher to pay the claimant’s remaining costs: [2013] EWHC 4336 (QB).