Get Your Claims in! No-Win No-Fee Rules for Defamation to Change 6 April 201914 Jan 2019 // Insights
Defamation and Privacy Solicitor Rory Lynch examines the impact of the government's upcoming changes to defamation and privacy claims.
New rules are set to come into force on 6 April 2019 regarding ‘no win no fee’ agreements for defamation and privacy claims. These new rules will make it harder for claimants to attain these agreements.
Currently, a claimant with a good case in defamation or misuse of private information can enter into a non-win no-fee agreement (known as a Conditional Fee Agreement or ‘CFA’) with a solicitor, which allows the solicitor to recover their costs from the losing party along with an uplift on those costs, known as a ‘success fee’. This success fee is normally in the range of 25% to 100%.
The success fee acts as insurance for the law firm (or barrister who can also enter into CFAs), as, under a CFA, if the client loses the case, then the law firm will not be paid for the costs they have incurred (which can be very significant, sometimes hundreds of thousands of pounds).
Without the insurance policy of success fees, law firms and barristers will be more reluctant to take on CFAs with prospective claimants. This will make it harder for genuine claimants, who may not be able to afford to fund a case on their own, to get access to justice.
On a positive note, the new rules will still allow the insurance premium for ‘After-the-Event’ (ATE) insurance to be recovered from the losing party. ATE insurance protects a claimant from paying the winning party’s legal costs.
However, the government has indicated that this arrangement could also be at risk, and that the recoverability of ATE insurance premiums for defamation and privacy claims could be abolished in the future. This would have a devastating effect on genuine claimants who cannot afford to finance a claim.
In the past, defamation used to be known as a ‘rich person’s remedy’. Sadly, it seems that this may now become the case again.
We urge all potential claimants with cases of defamation or misuse of private information to get their claims up and running before 6 April 2019, so they can take advantage of the current CFA environment. After this date, law firms will be reluctant to take a risk on your case.
If this article affects you or for more information, please contact Rory Lynch in our Defamation and Privacy team on 0207 725 8000 or firstname.lastname@example.org.