Times Newspapers Ltd & Ors v Flood & Ors [2017] UKSC 33

Three newspaper publishers challenged costs orders requiring them to pay claimants' success fees and ATE premiums under the 1999 Act regime, arguing infringement of article 10 rights. The Supreme Court dismissed all three appeals, holding claimants' accrued rights and legitimate expectations prevailed.

Facts

Three conjoined appeals concerned costs orders made against newspaper publishers following trials in which the publishers lost. In Flood v TNL, a police officer succeeded in a libel claim concerning a Times article alleging corruption, with Nicola Davies J awarding £60,000 damages and ordering TNL to pay all his costs. In Miller v ANL, the claimant succeeded in a libel claim against the Daily Mail, with Sharp J awarding £65,000 damages; base costs were agreed at £633,006, with claims for £587,000 in success fees and £248,000 in ATE premium. In Frost v MGN, 23 claimants succeeded against MGN in respect of phone hacking and blagging activities, with the eight ‘wave one’ claimants receiving damages between £72,500 and £260,250.

Each claimant had funded litigation under the regime introduced by the Access to Justice Act 1999 (the ‘1999 Act regime’), involving conditional fee agreements (CFAs) with success fees and after-the-event (ATE) insurance, with both being recoverable from unsuccessful defendants. The publishers argued, relying on MGN v United Kingdom (2011) 53 EHRR 5, that requiring them to reimburse success fees and ATE premiums infringed their article 10 ECHR rights.

Issues

Four article 10 issues arose across the appeals:

• Whether the Strasbourg decision in MGN v UK should be reflected in domestic law as a general rule (the ‘Rule’) that requiring a newspaper defendant to pay claimants’ success fees and ATE premiums normally infringes article 10.
• Whether, if the Rule applied, the costs orders in Miller and Flood should be amended to exclude liability for success fees and ATE premiums.
• Whether MGN could rely on the Rule in Frost, given the unlawful means by which information had been obtained.
• Whether a declaration of incompatibility under section 4 of the Human Rights Act 1998 should be made.

A further discrete issue in Flood v TNL was whether Nicola Davies J’s costs order was outside the ambit of reasonable discretion.

Arguments

The publishers argued that MGN v UK established that the 1999 Act regime infringed article 10 rights of media defendants, and that the costs orders against them should be amended to exclude success fees and ATE premiums. Mr McCormick QC for Mr Miller argued that MGN v UK was decided on its particular facts, did not consider the broader range of cases covered by the 1999 Act regime, ignored that the regime could assist defendants, overstated the ‘blackmail’ effect, and that subsequent events justified departing from it. The claimants also argued that depriving them of recovery would infringe their A1P1 rights, given their legitimate expectations that arose under settled domestic law confirmed by the House of Lords in Campbell v MGN (No 2).

Judgment

Lord Neuberger (with whom Lord Mance, Lord Sumption, Lord Hughes and Lord Hodge agreed) dismissed all three appeals.

The Rule and its application

The Court declined to express a concluded view on whether MGN v UK should be adopted into domestic law as a general rule, particularly given the United Kingdom government was not a party. The Court proceeded on the assumption that the Rule applied.

Miller and Flood

Even assuming the Rule applied, the costs orders should not be varied. Mr Miller (and Mr Flood) had entered into CFAs and taken out ATE insurance in reliance on settled domestic law as confirmed by the House of Lords in Campbell (No 2). Depriving them retrospectively of recoverability would infringe their rights under A1P1, supported by the concurring judgment of Lord Mance in Lawrence (No 3) and Strasbourg authority including Pine Valley, Pressos, and Stretch. Lord Neuberger observed that such deprivation might also infringe article 6 (access to justice) and possibly article 8, but based the conclusion on A1P1. Under section 8(1) of the Human Rights Act 1998, the ‘just and appropriate’ order was to dismiss the appeals, since the injustice to claimants would be significantly greater than that to defendants. The rule of law required that citizens be entitled to act on legislation as it stood, particularly where confirmed by the highest court.

Frost v MGN

Two distinct reasons supported dismissal. First, the claimants had entered into CFAs after MGN v UK, but the 1999 Act regime remained lawful domestically until LASPO. Secondly, and more fundamentally, MGN could not invoke the Rule on these facts. The complaint was not principally about publication but about persistent, pervasive and flagrant phone hacking and blagging by MGN’s agents, with no public interest justification for revealing the private lives of celebrities, footballers and television personalities. The Strasbourg principle, founded on protecting press participation in debates on matters of legitimate public concern, did not extend to such unlawful newsgathering.

Declaration of incompatibility

Inappropriate to grant, both because the government was not before the Court and because the 1999 Act regime had been superseded by LASPO.

The Flood discretion issue

Nicola Davies J had not erred. Mr Flood was the successful party and the prima facie position under CPR 44.2(2)(a) was that he should recover costs. None of the factors raised by TNL – the importance of freedom of expression, the without prejudice save as to costs correspondence, the Reynolds defence (on which TNL had only partial success), and the partial success on publications – required departure from that starting point. TNL’s ‘die-hard attitude’ in negotiations had materially contributed to the failure to settle.

Implications

The decision confirms that, even where a costs regime is held to infringe a defendant’s Convention rights, courts will protect claimants’ accrued rights and legitimate expectations under A1P1 where they have committed to litigation in reliance on settled domestic law. The judgment underlines that retrospective deprivation of statutorily based claims engaging accrued rights will rarely be justified, and reinforces the principle that citizens may act on the assumption that the law is as set out in legislation confirmed by the highest court.

The decision also draws an important distinction in the application of article 10 in costs matters: the protection accorded by MGN v UK applies most strongly where the press is engaged in debates on matters of legitimate public concern, and not where the underlying conduct involves persistent and flagrant unlawful newsgathering such as phone hacking. This narrows the practical reach of MGN v UK in cases involving illegitimate journalistic methods.

The Court expressly left open the wider question whether MGN v UK should be adopted as a domestic rule, recognising that determination of that issue properly required the involvement of the government. The judgment also confirms that the 1999 Act regime continues to apply to proceedings commenced before 1 April 2013, notwithstanding the changes made by LASPO. For practitioners, the decision provides significant protection to claimants who litigated under the old regime, while confirming that decisions on costs discretion under CPR 44.2 made by experienced first instance judges will be afforded considerable respect on appeal.

Verdict: All three appeals dismissed. The costs orders against Times Newspapers Ltd, Associated Newspapers Ltd and MGN Ltd (including liability for the claimants’ success fees and ATE premiums) were upheld.

Source: Times Newspapers Ltd & Ors v Flood & Ors [2017] UKSC 33