The recent decision of the Supreme Court in the case of Coventry v Lawrence has received a lot of attention from lawyers because of its significance for the recoverability of legal costs from unsuccessful defendants to litigation. Perhaps more important is what the decision says about the attitude of the Courts to attempts to use the Human Rights Act to challenge legislation.
Ms Lawrence claimed damages and an injunction, alleging that motor sport events which Mr Coventry ran in a stadium located some 800 yards from her home caused a level of noise which amounted to a nuisance and diminished the value of her house. Ms Lawrence was successful in her claim and was awarded her injunction and damages. Mr Coventry appealed and though successful in the Court of Appeal, the Supreme Court reinstated the decision of the trial judge such that Ms Lawrence succeeded in her claim.
The issue before the Supreme Court in its final consideration of the matter was liability for legal costs. Ms Lawrence’s solicitors acted under a Conditional Fee Agreement (CFA), backed by a policy of After the Event (ATE) Insurance, which protected her against the risk of losing her claim and having to pay Mr Coventry’s costs. The CFA and ATE Policy were both entered into before 1 April 2013. Prior to that date a successful Claimant was entitled to have the success fee and the insurance premium paid by the unsuccessful Defendant with the costs of the claim. On 1 April 2013 the law changed so that successful Claimants have to meet the success fee and insurance premium elements of their costs out of their damages. The decision of the Supreme Court in this case therefore concerned the pre 1 April 2013 costs arrangements. The Supreme Court found that Mr Coventry should pay the success fee and insurance premium as part of his liability to pay Ms Lawrence’s costs.
This means that the Supreme Court has confirmed the Statutory Scheme for payment of legal costs under the Access to Justice Act 1999. There are of course still many cases being conducted under that scheme, so the Court’s decision has clarified who is liable for which costs in all cases in which clients entered into retainers with their solicitors prior to 1 April 2013.
In cases in which retainers commenced on or after 1 April 2013, Claimants have to pay the success fee and insurance premium out of damages. Thus, the Supreme Court’s decision applies only to cases under a scheme now in run-off, so the application of this decision to costs will diminish with time.
More significant in the longer term is the fact that, by majority of 4 to 3, the Supreme Court rejected Mr Coventry’s challenge made under the Human Rights Act. He argued that the statutory requirement that he should pay Ms Lawrence’s success fee and insurance premium infringed his human rights, as conferred by Article 6 of the European Convention on Human Rights, which states that citizens are entitled to a fair trial. Mr Coventry’s contention was the Statutory Scheme under the 1999 Act breached his human rights and denied him a fair trial.
It was argued on Mr Coventry’s behalf that he was a small businessman who lacked the resources which Ms Lawrence had from her CFA and ATE insurance. It was further argued that the costs regime under the 1999 Act did not give litigants an incentive to control legal costs which were in any event only assessed at the end of the case, when it was too late to control the costs which had already been spent. It was also suggested that the threat of having to pay the success fee and the insurance premium pressed people such as Mr Coventry into settling a claim, even though they considered they had a good case, in order to minimise the costs that they would have to pay.
These criticisms had already been considered elsewhere and had been voiced by the Appeal Court Judge whose report led to the legislation which came into force in April 2013, changing the costs regime set out by the 1999 Act. Mr Coventry’s arguments had therefore already received favourable consideration by a senior member of the judiciary before this case came before the Supreme Court.
The Supreme Court, was not prepared to allow the Human Rights Act to be used to challenge legislation that had been passed by Parliament, even though, by the time the case came to be considered, the costs rules had been changed. This shows that other legislation governing the conduct of litigation is likely to be applied by the Supreme Court, even when a challenge is made under the Human Rights Act.
An important example is the very substantial increase in court fees which came into effect on 9 March 2015. These increases have been widely criticised as interfering with access to justice. The fee for commencing court proceedings in the highest value cases was increased from £1,720 to £10,000. The increases in fees were as high as 622%. One might reasonably believe that such punitive increases serve to restrict access to justice and therefore offend Article 6 of the Convention of Human Rights.
Professional bodies considered challenging these increases via judicial review proceedings but did not do so. The decision of the Supreme Court in Coventry v Lawrence might well explain why that was. The courts are not minded to allow Human Rights Act challenges to legislation which has been approved by parliament.
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