Lawyers for a PR woman who sued The People have claimed more than 15 times her libel damages in costs.
PR strategist for the Find Madeleine Fund Justine McGuinness, operating on a no-win, no-fee Conditional Fee Agreement, sued The People over a story which appeared in October 2007, and settled with the statement in open court on October claiming £5,000 in damages. It has now emerged that her lawyers LLP have presented Mirror Group Newspapers with a costs bill of £78,000.
The costs have been ramped under controversial no win, no fee rules in libel cases which allow claimant lawyers to charge up to a 100 per cent success fee to compensate them for the risk of failure.
Yesterday Lord Justice Jackson published the final report in his Review of Costs in Civil Litigation in which he said these success fees should be scrapped because they have become grossly disproportianate to the level of damages awarded.
Justice Secretary Jack Straw has promised a wholesale review of UK libel law tackling the issue no win, no fee.
In the McGuinness case The People wrongly alleged that she overcharged the fund set up to find missing Madeleine McCann, who disappeared from her family’s holiday apartment in a Portuguese resort in May 2007.
It is understood that as part of the settlement, Mirror Group Newspapers (MGN), publisher of the People, paid damages of £5,000 to a charity of Ms McGuinness’ choosing, and agreed to pay her legal costs.
The newspaper’s own costs amounted to less than £15,000 – but London-based international law firm Withers LLP has presented MGN with a schedule of costs totalling £78,000.
Executives at MGN are understood to believe that the costs Withers are seeking are excessive.
But the law firm today defended its position, saying the costs were reasonable and properly incurred, given that the case took two years to settle.
It is understood that the total costs include sums accrued by the solicitor at the client’s previous firm before the solicitor and the case moved to Withers.
A spokesman for the firm said: “In October 2007, the defendants published a very serious libel about Ms McGuinness which went to the heart of her professional and personal reputation.
“Obtaining a fulsome apology was her primary concern and in the absence of an apology from the defendants, she had no option but to take legal action to remedy that reputation. This was ultimately achieved; a statement in open court was read on 16 October 2009 and the apology published on 18 October 2009.
“Ms McGuinness was represented under a CFA and Withers made special provision for the client to continue to be represented under a CFA, although CFAs are not usual at the firm, in order to provide consistency for the client when the solicitor with conduct of her case, joined Withers.
“We consider the costs to be entirely reasonable and properly and proportionately incurred, in respect of a case of this length, highly dependent on the evidence and of significant importance to the client.
“Withers has in any event, agreed to the usual process of assessment during which the level of the costs will be independently considered.”
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