In Coventry v Lawrence No 2 the Supreme Court said that the costs regime introduced by the Access to Justice Act 1999 and the CPR might be contrary to Article 6 and Article 1 Protocol 1 of the European Convention on Human Rights. This was because successful Claimants could recover their reasonable profit costs, plus a success fee of 100%, plus their ATE insurance premium. This might mean that non-rich, uninsured Defendants could not exercise their right to defend themselves because the costs were prohibitive. The successful appellants who had been the victims of noise nuisance caused by the Defendants’ speedway stadium had succeeded after an 11 day trial in the High Court in obtaining an injunction and modest damages. Their base costs were over £307,000 at trial (and a further £307,600 on the appeals), their ATE premium would have been £305,000 at trial (and at least a further £200,000 for the appeals), and the 100% success fee meant that the Defendants were facing a very substantial and, they said, ruinous costs bill. Tim Dutton QC was brought in to the Appellants team in the Supreme Court by the ATE Insurers Burford to argue that the regime permitting recovery of success fees and ATE premiums did not give rise to breaches of Art 6 or A1P1. The Supreme Court found for the Appellants by a majority of 5-2. The majority (Neuberger P, Dyson, Mance, Carnwath, and Sumption) held that the system, whilst imperfect and much criticised, was not incompatible with Art 6 or A1P1. Ironically, under the Jackson reforms and LASPO 2012 it would not have been possible for the Claimants to have instructed lawyers and been able to litigate their successful claim at all. The minority (Clarke and Hale) would have held that the costs regime was incompatible with the ECHR and that the CPD should be read down so as to permit means to be taken into account in costs assessments.
The judgment can be found here.