Master Rowley has cast doubt over Master Gordon-Saker’s Judgment in BNM v MGN, which had ruled recoverable additional liabilities are subject to the new costs rules on proportionality.
In his Judgment Master Gordon-Saker had ruled that the recoverability of additional liabilities, which was preserved following the Jackson Reform programme, was not maintained in tandem with the old proportionality rules; In King v Basildon & Thurrock University Hospitals NHS Foundation Trust, Master Rowley ‘respectfully disagreed’ with this Judgment and in so doing provides an alternative judicial view as to whether the new paragraphs in CPR 44.3 apply to CFA success fees and ATE Insurance premiums in defamation and privacy claims.
The Master averred that costs as now defined in the new proportionality test, did not include additional liabilities and so a costs Judge should not include such fees in reviewing the cost of ATE premiums or success fees, when the test was only meant to encompass base costs.
This will no doubt cause uncertainty until guidance is provided as to how the new legislation is to be applied in litigation. BNM v MGN is listed to be heard by the Court of Appeal in 2017 but the clarity required is likely to be provided much earlier when the Supreme Court hears Miller v Associated Newspapers Ltd in late January.
The Court is to hear from the appellant (MGN) that the recoverability of additional liabilities breaches Human Rights law and inhibits the right to freedom of expression. Such a view was put forward in Campbell v MGN (HL) in relation to success fees and was rejected. Whilst it is true that the European Court of Human Rights has entertained such a view (MGN v UK), Parliament has since enacted LASPO but preserved recoverable additional liabilities for certain cases in law.
This is an important year for costs law, and with spiralling litigation fees and court disbursements, the importance for firms to be aware of the range of funding options available increases.
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