Spycatcher lawyer David Hooper has accused his fellow professionals of indulging in a cash bonanza over current no-win no-fee libel arrangements.
On 26 September, the government consultation on simplifying conditional fee arrangements will end. According to Hooper, the system has become a big-money casino where the lawyers win every time. And he told Press Gazette that greater legal safeguards are needed to prevent the current abuses.
No-win no-fee first became widespread in the late Nineties for personal injury cases in response to legal aid cutbacks.
But in recent years it has been increasingly used in libel cases. To make up for the fact that lawyers might lose, government guidelines allow them to boost their fees (paid by the loser if they win) by up to 100 per cent.
Hooper, who represented Peter Wright in the Spycatcher case and is a partner at Reynolds Porter Chamberlain, said: “I think the whole position is becoming scandalous.”
He added: “You are getting cases where firms of lawyers that charge £350-an-hour are being allowed by the court to charge 100 per cent more. Some people would say charging £350-an-hour was quite a lot in the first place.” He said: “The costs are spiralling out of control and this has all been very bad for free speech. This is just bonanza and casino time for plaintiff lawyers.”
According to Hooper, the current no-win no-fee rules has led to more speculative claims with claimants increasingly playing on the fact that they can’t afford to pay papers’ costs.
In July, Associated Newspapers won a libel case brought by a pair of army officers who were reported to be having an affair while stationed in Oman. Associated won, but has little or no chance of recovering its £500,000 costs from the couple, who indicated after losing that they would file for bankruptcy. Their lawyer took the case on a no-win no-fee basis.
Hooper said: “What’s happening is people are suing for often quite trivial libels because they feel they are going to make a lot of money.”
He added: “Defence lawyers are saying, ‘You are never going to get your money back from the claimant – you might as well settle or you’re going to face £500,000 or £1m costs’.”
By Dominic Ponsford