Times Newspapers Limited v Flood

The Supreme Court considered three appeals challenging orders for costs made against newspaper publishers after trials in which the publishers lost. The core legal issues concerned the recoverability by claimants of conditional fee agreement "success fees" and after-the-event (ATE) insurance premiums under the 1999 Act regime and whether requiring a defendant publisher to reimburse those sums infringed its article 10 rights.

The Court treated the Strasbourg judgment in MGN v United Kingdom (2011) as potentially authoritative that, in cases engaging freedom of expression, it would normally offend article 10 to require a publisher to reimburse a claimant’s success fee and ATE premium. However, the Court declined to lay down a general domestic rule as a binding proposition in these appeals and proceeded on the assumption that the Strasbourg reasoning could apply.

Applying that assumption, the Court held that nevertheless the costs orders in Miller v Associated Newspapers Ltd and Flood v Times Newspapers Ltd should stand because disallowing recovery of success fees and ATE premiums would retrospectively deprive claimants of accrued rights and legitimate expectations protected by A1P1 and would risk infringing other Convention rights; accordingly, dismissal of those appeals was just and appropriate. In Frost and others v MGN Ltd the Court held that the Strasbourg line of reasoning could not be relied upon by MGN because the claims were based on persistent unlawful phone hacking and blagging and the publisher’s article 10 interest did not warrant the protection contemplated in MGN v UK. All three appeals were dismissed.

This consolidated judgment arose from three separate appeals by newspaper publishers against High Court costs orders made after trial. The proceedings below comprised libel claims (Flood v Times Newspapers Ltd; Miller v Associated Newspapers Ltd) and a series of privacy and wrongdoing claims based on phone hacking and related unlawful information-gathering (Frost and others v MGN Ltd). Successful claimants sought to recover base costs plus CFAs' success fees and ATE insurance premiums under the costs regime created by the Access to Justice Act 1999 and the then-applicable Civil Procedure Rules.

The principal issues for this Court were:

• whether the Strasbourg decision in MGN v United Kingdom (2011) should be adopted in domestic law to the effect that, in cases engaging article 10, it would normally be incompatible with article 10 to require a publisher to reimburse a claimant’s success fee and ATE premium under the 1999 Act regime;
• whether the costs orders in Miller and Flood should therefore be amended to exclude recovery of success fees and ATE premiums;
• whether the same reasoning could be invoked by MGN in Frost, where the claims involved systematic unlawful phone hacking; and
• whether a declaration of incompatibility with the Human Rights Act 1998 should be made in respect of the 1999 Act regime or subsequent costs legislation.

The Court reviewed the history and criticisms of the 1999 Act regime, including Campbell v MGN Ltd and the Jackson Review, and noted the legislative changes effected by LASPO and related instruments (though those changes did not apply to the present proceedings). The Court declined to express a definitive view that MGN v UK must be treated as establishing a domestic “Rule”, preferring to proceed on the assumption that it could apply. On that assumption, it held that:

• in Miller and Flood, although applying the Strasbourg reasoning would mean that the publishers’ article 10 rights were infringed by orders requiring reimbursement of success fees and ATE premiums, altering the costs orders would unjustifiably deprive claimants of accrued rights and legitimate expectations protected by A1P1 (and risk infringing access-to-court rights under article 6). On balance, dismissal of the appeals was the just and appropriate remedy under section 8(1) of the Human Rights Act 1998;
• in Frost, the publisher could not successfully rely on that reasoning: the claims chiefly concerned unlawful and persistent phone hacking and blagging, conduct so flagrant and pervasive that the public-interest/newsgathering considerations relied on in MGN v UK did not apply; accordingly the costs orders including success fees and ATE premiums could stand;
• it would be inappropriate in the present proceedings to make a declaration of incompatibility in relation to the 1999 Act regime or subsequent legislation given legislative change and the absence of the United Kingdom government from the issues here; and
• as to the discrete challenge in Flood that the first-instance judge had acted outside her discretion in awarding all costs to the claimant, the Court rejected that challenge and upheld the exercise of discretion.

The Court therefore dismissed all three appeals and refused to alter the costs awards below.

Appeals dismissed. The Supreme Court concluded that although the Strasbourg decision in MGN v UK supported the proposition that, in cases engaging freedom of expression, it would normally be incompatible with article 10 to order a defendant publisher to reimburse claimants’ success fees and ATE premiums under the 1999 Act scheme, the costs orders in Miller and Flood should nevertheless stand because depriving the claimants of recovery would retrospectively strip them of accrued rights and legitimate expectations protected by A1P1 (and risk infringing other Convention rights). In Frost, the Court held that the Strasbourg reasoning did not apply to claims predicated upon persistent and flagrant unlawful phone hacking and blagging, so the costs orders there also stood. The Court declined to make a declaration of incompatibility and upheld the exercise of discretion in Flood.

Appeals to the Supreme Court from: Court of Appeal decision in Flood v Times Newspapers Ltd [2014] EWCA Civ 1574; High Court (Queen's Bench) decision in Miller v Associated Newspapers Ltd [2016] EWHC 397 (QB); High Court (Chancery) decision in Frost and others v MGN Ltd [2016] EWHC 855 (Ch). The Supreme Court heard the consolidated appeals and dismissed all three.