New measures aimed at tackling excessive legal fees in “no win, no win” defamation proceedings have come into effect.
About 220 defamation claims are lodged in the High Court each year, and the Ministry of Justice estimates a further 80 claims are settled before court proceedings are issued.
Defendants often choose to settle claims rather than risk facing potentially huge libel costs.
From this week, there are three major changes: early notice if “after the event” (ATE) insurance has been taken out; a 40-day cooling-off period where, if the defendant admits liability and settlement is reached, the ATE premiums won’t be payable by the defendant; and a mandatory costs budgeting pilot for defamation proceedings, with close judicial supervision.
Justice Secretary Jack Straw says: “The government is taking action to ensure that, where ATE insurance is taken out, defendants are notified as early as possible, and given the opportunity to reach a settlement without being liable for the insurance premiums.
"As recommended by the Civil Procedure Rules Committee, publication proceedings will also be part of a mandatory costs budgeting pilot, with judges scrutinising costs as cases
