Jack Straw has firmed up his promise to reform the libel laws revealing a plan to “introduce a radically reduced cap on the level of excessive success fees in defamation cases”.
Although there was no new legislation on media law in the Queen’s Speech – Straw has said that the proposed changes can be made under secondary legislation, which does not need the assent of Parliament.
In an interview published this week’s New Statesman, Straw said: “Our libel laws are having a chilling effect. By definition, it’s not hitting the most profitable international media groups, News International or Associated Newspapers and so on, though it’s not good news for them.
“It is hitting the press that is vital to our democracy but whose finances are much more difficult, and that includes magazines, one or two of the nationals, and regional and local newspapers, and it’s really bad for them. That’s why I will be changing the law on defamation costs”.
Publishers have long complained about the high fees charged by claimant lawyers under the no win, no fee system.
Under the current rules claimant lawyers charge a 100 per cent success fee to the publishers if they win, effectively doubling their money to compensate for the risk of failure.
Press Gazette’s Media Law Conference last year heard that the cost to a publisher of defending a major libel action at trial was now around £2.4m.
This comprises: the libel claimant’s legal costs of £750,000, a 100 per cent success fee under CFA for the claimant’s lawyers of another £750,000, the publisher’s own costs of £500,000 and a further £420,000 to pay the insurance premium which the claimant would have taken to protect themselves against losing.
In an interview with the Sunday Times two weeks ago Straw said he was impressed with a report by Index on Censorship and English PEN which proposes capping libel damages at £10,000 and making an apology the chief remedy. The report also proposed banning libel cases from being heard in London unless at least 10 per cent of the publication’s circulation is in the UK.