Pre Jackson Costs regime – maintaining the status quo
The Supreme Court handed down judgment yesterday in the landmark costs case of Coventry v Lawrence as to whether the system for the recovery of costs in civil litigation in England and Wales under the Access to Justice Act 1999 (“the Act”) is compatible with the European Convention on Human Rights.
Background
The underlying case centered on a nuisance claim brought against the owners and landlords of a speedway track.
The Claimant/Appellants, the owners of a bungalow, succeeded in the High Court and in the Supreme Court on a successful appeal recovering £20,000 in damages and were awarded 60% of their costs assessed on the standard basis. Because the Claimant’s/Appellants lawyers were acting under a CFA the Respondents were also therefore liable to pay 60% of i) a success fee and ii) an After the Event (ATE) insurance premium.
The Respondents acknowledged that they could not challenge their liability to pay the Appellant’s base costs but challenged their liability to pay the success fee and ATE premium on the basis that it would infringe their rights under Article 6 of the European Convention on Human Rights if they were liable for those sums.
The Judgment
By a majority of 5 – 2 the Supreme Court held that the regime under the Act is compatible with the European Convention on Human Rights with the result that the success fee under a CFA and ATE premium are still recoverable from the losing party in respect of CFAs and ATE insurance policies entered into before 1 April 2013.
Whilst their Lordships recognised that the regime under the Act had the potential to place Defendants under considerable pressure to settle given the potential level of costs the Court held that by reference to the generality of cases the regime under the Act was justified by the need to widen access to justice following withdrawal of legal aid ii) was made following wide consultation and iii) was within the area of discretionary judgment of the legislature.
This decision is a grounded in pragmatism and does at least for now provide a conclusive answer to this issue.
There is the possibility that the decision could be further appealed to Strasbourg but it remains to be seen if the respondents will take this course.
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