Success Fees and ATE Premiums Are Compatible with Art 6 ECHR - Coventry v Lawrence and another

Article

03 August, 2015

The highly anticipated judgment in the matter of Coventry v Lawrence has been handed down by the Supreme Court. By a majority of 5-2, the Supreme Court held that the system for the recovery of costs in civil litigation under the Access to Justice Act 1999 ("the AJA") is compatible with article 6 of European Convention on Human Rights - right to a fair trial and article 1 of the First Protocol to the Convention.

With Lord Neuberger and Lord Dyson providing the main judgment they found that the key aims of the regime under the AJA had been to contain the rising cost of legal aid, to improve access to the courts for members of the public and to discourage weak claims.

The Court summarised the four flaws of the AJA regime as set out by the ECtHR in the leading case of MGN v United Kingdom:

  • the regime was unfocussed,
  • costs were assessed at the end of the case,
  • there was an ability to impose an excessive costs burden on opposing parties which in some cases amounted to a denial of justice; and
  • there was an opportunity for lawyers to cherry pick cases.

Lord Neuberger and Lord Dyson described that the third listed flaw was at the heart of this case. The Court considered whether this flaw rendered the 1999 Act scheme incompatible with article 6.

Whilst much has been made of the alleged unfairness of the system, according to Lord Neuberger and Lord Dyson the issue was not whether the system was unfair or had flaws, it was whether it was a disproportionate way of achieving the legitimate aim:

"there was, and indeed there is, no perfect solution to the problem of how best to enhance access to justice following the withdrawal of legal aid for most civil cases".

Furthermore, they concluded that

"the scheme as a whole was a rational and coherent scheme for providing access to justice to those to whom it would probably otherwise have been denied".

It was held that the government was entitled to a considerable area of discretionary judgment in choosing the scheme that it considered would strike the right balance between the interests of appellants and respondents whilst at the same time securing access to justice to those who would previously have qualified for legal aid. This led to the majority conclusion that the scheme was not incompatible with article 6 of the European Convention Human Rights or article 1 of the First Protocol to the Convention.

Forbes comment

After five months of deliberation the Supreme Court took the unsurprising step of finding that success fees and ATE premiums are recoverable, this perhaps foreseeable ruling has avoided the significant fall out which would have been inevitable had the Court found that the AJA system was incompatible with the ECHR. It remains to be seen of course whether the case will be pursued to the European Court of Human Rights, however this seems unlikely. We will of course keep you updated on any further developments.

For further information please contact Sarah Wilkinson.

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