No Win No Fee Agreements Threaten Local Papers

Many newspapers have complained recently of the unfairness of being ‘held to ransom’ by lawyers acting on a no win no fee basis in libel cases.

Tony Jaffa, a media lawyer, says that in most cases, regional newspapers cannot defend themselves because the possible costs are so high that smaller papers cannot risk it.

“When it comes to stories were there could be a defence under fair comment or the Reynolds defence – they can’t afford to take the risk,” he said.

“If you look at personal injury cases, success fees for lawyers are around eight to 10 per cent. What I find really objectionable is the 100 per cent success fees in libel cases.”

A number of newspaper companies are campaigning against no win no fee agreements, otherwise known as conditional fee agreements, claiming that they make it impossible for them to defend themselves due to the massive costs if they lose which are much too high for some smaller newspapers to cope with.

Costs can escalate into the tens of thousands with no win no fee lawyers able to charge an uplift on their usual fees of up to 100%. This means that some newspapers can end up paying them £1000 per hour, in addition to their own legal fees.

Mr Jaffa claims that No win no fee lawyers acting in libel cases are taking out After the Event Insurance for their clients in order to push costs up meaning that newsapers are being issued with a £10,000 to £15,000 bill even if they settle immeadiately.

Santha Rasaiah, legal expert for the Newspaper Society, agrees that no win no fee libel claims pose a massive risk to local papers:

“Even if a title admits a mistake swiftly on receipt of a complaint, before any legal action is started – (and there is a long tradition in the regional press of editors swiftly and informally resolving complaints without need of legal intervention) – it could be faced with success fees and ATE premiums, in addition to any costs and damages, despite the lack of risk incurred by the claimant or their lawyers.”

Carys is an author of several articles pertaining to No Win No Fee, Compensation Claims, Personal Injury Claims and other legal articles.