Newspaper loses 'no win, no fee' legal bid

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The Independent Online

The model employed solicitors Schillings on a conditional fee basis for her successful privacy challenge against the newspaper in the House of Lords over its coverage of her treatment at Narcotics Anonymous.

Under no win, no fee rules, Schillings was able to charge the Mirror a 100% uplift in its costs - intended as a compensation for the risk of losing.

All five Law Lords dismissed the Mirror's argument that the size of the success fee infringed rights to free speech.

They said it was up to Parliament to change the rules.

At a hearing in May, Richard Spearman QC, for the newspaper, told the panel of Law Lords that cost claims in no win, no fee cases were now "totally out of control".

The scale of the fees was a violation of the right to freedom of speech under the European Convention on Human Rights, he argued.

Campbell was a wealthy woman and therefore would not have been denied access to the courts if there had been no conditional fee agreement.

In May last year, the Law Lords overturned a Court of Appeal ruling that the newspaper had been justified in publishing information about the supermodel's battle against drugs.

By a 3-2 majority, they reinstated a High Court damages award of £3,500 to Miss Campbell, based on breach of confidentiality and duty under the Data Protection Act.

Lord Hoffmann, giving his ruling in today's appeal, said: "MGN were mortified to find that although the award of damages had been only £3,500, they were being asked to pay legal costs (in addition to their own) in the sum of £1,086,294."

He said the newspaper group complained that the threat of a liability to pay a large sum by way of costs was just as likely to inhibit freedom of expression as the threat of liability to pay a large sum of damages.

The Law Lord said the extension of the use of conditional fee arrangements to defamation and breach of confidence claims was to enable people of modest means to protect their reputations and privacy from powerful publishers who in the past did not fear litigation.

"Finding ways of moderating the costs of defamation cases would then be in the best interests of all concerned. But the rich and powerful have also had to pay the price of failure."

"Finding ways of ensuring that the impecunious claimant can also do this may be more of a challenge. In the end, therefore, it may be that a legislative solution will be needed."