Stephen Brookes reviews the decision of the Supreme Court in Coventry and Lawrence (2014).
Coventry v Lawrence was a case which shows that determination counts for everything in litigation, and the capacity for the courts to create utter chaos in the operation of civil costs recovery remains undiminished. Lawrence and Shields occupied a bungalow a few hundred yards from a speedway stadium and their enjoyment of their property was affected by the noise. They sued the stadium owner and the racetrack owner for damages for the civil wrong of nuisance.They won in the lower court, lost in the Court of Appeal, appealed and won in the Supreme Court. So far so good – that’s the part about the merits of determination.
Now for the dog’s dinner.
The costs bill came in at a staggering �400,000 and the losers were ordered to pay, in addition, a success fee of 60% on that and an insurance premium of �210,000.
Success fees are a premium charged by the solicitors who won the case for taking the risk that they would receive no payment at all under a no win no fee agreement if they lost the case and the insurance was paid to obtain a insurance cover to pay the other side’s legal costs in the event the claim failed.
The 1999 Access to Justice Act made success fees and an insurance premium recoverable from the losing party. The costs of the losing claims are spread amongst the winning claims akin to insurance, where the costs of the claims are spread amongst the policyholders who purchase policies. Such cost items are not (generally) recoverable for no win no cases post-dating 31st March 2013.
The losers in Lawrence argued that having to pay success fees and an insurance premium on that amount breached their human rights upon the grounds that the European Court of Human Rights had suggested as such in MGN Ltd v UK in 2011.
The Court decided that that MAY be the case but if it was a point to be pursued, the court was going to arrange another hearing and invite the Government to make representations on the reasons why the recoverability scheme had been enacted in that way.
So, now in every case in the land which was funded by a no win no fee agreement entered into before 1st April 2013, where costs are to be recovered, we shall have every fresh from their SATs costs negotiator pointing to this case and refusing to pay success fees, claiming ( WRONGLY !! ) that this case is authority for the propostion that success fees breach human rights.
Nonsense. It is only authority for the proposition that the case was adjourned on this point but if it’s a good enough case to quote, why let factual accuracy stand in the way!