The Ministry of Justice’s consultation on costs protection in defamation and privacy cases contained government proposals designed to help people and organisations of modest means bring and defend defamation and privacy claims.

The issues surrounding defamation and privacy have become increasingly high-profile. Emotions are running high, with press regulation and the conduct of the media proving divisive and controversial topics. However, with the spotlight focused on the nation’s press, we must be sure that any attempt to redress a perceived imbalance does not have the effect of causing the pendulum to swing too far in the other direction.

Furthermore, any action by the government needs to reflect public opinion. Our recent research found that less than half (40%) of people thought the current system, whereby ‘the loser pays’, is unfair.

The key issue is striking the right balance between the laudable aim of ensuring access to justice for all, and the undesirable effect of encouraging vexatious claimants and overburdening our smaller publications.  

The consultation asks what impact the proposals will have on businesses. This is a very pertinent question. While we agree that it is important for less-wealthy parties to be able to bring/defend proceedings covered by the consultation, it is important to recognise that many publications, particularly regional ones, have such limited means that an adverse costs award (or being denied the ability to recover their costs) in a single case runs the real risk of putting them out of business. That would have a seriously detrimental effect on free speech in the UK, not just on the newspaper business.

This is all the more worrying because our research also indicates that the proposed changes could lead to an increase in potentially vexatious claims. A quarter of people (23%) who said they would not consider taking legal action if an offensive comment about them was posted online said they would consider it if, in the event they lost, they would not have to pay both sides’ costs.

We should recognise that any such claimant would have to apply for costs protection, and the risk of an increased number of claims needs to be viewed in light of the undoubted advantages of legislative changes that mean after-the-event insurance and success fees are no longer to be paid by the defendant. But even taking this into consideration – and as noted in the consultation – the principle that ‘the loser pays’ is an important element in civil litigation because of its deterrent effect. If a party was not otherwise going to take action, the removal of the cost barrier should not be their motivation.

There are elements of the consultation that need to be ironed out. For example, it would appear that the recommendations do not fully reflect Lord Justice Leveson’s recommendations. In his report, Leveson recommended taking into account circumstances in which a speedy and inexpensive arbitration system administered by a new press regulator was available when deciding issues of costs.

Given that a royal charter on press regulation, including a requirement for a regulator to provide an arbitration system, has now been granted approval, the proposed rules should make specific reference to use of such a scheme being a factor to be taken into account on any application for a costs protection order (or variation of an order), if and when such a scheme becomes available.

Crucially, what we would advise is caution. It remains vitally important that the balance between the interests of less-wealthy claimants and media organisations is fairly drawn and carefully considered.

Amali de Silva is a consultant at specialist media law firm Wiggin

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