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Defamation Proceedings (Costs)

Volume 497: debated on Monday 12 October 2009

I issued the Government’s response to the consultation paper “Controlling Costs in Defamation Proceedings” on 24 September 2009.

The high level of costs incurred in defamation and some other publication proceedings have been the subject of criticism and debate in the courts and Parliament. The Government are concerned that the risk of excessive costs may force defendants to settle unmeritorious claims, which in turn may encourage a more risk-averse approach to media reporting and is a risk to freedom of expression.

In the light of the responses to the consultation paper and recommendations from the Advisory Committee on Civil Costs, the Government asked the Civil Procedure Rule Committee (CPRC) to consider draft rules to implement a number of measures to control costs in publication proceedings. The CPRC met twice to consider these proposals, and has approved amendments to:

require notice of after the event—ATE—insurance to be given to the other party with the letter before claim or within seven days of entering taking out insurance;

require additional information to be given as to whether premiums are staged and if so the stage at which increased premiums become payable and the level of insurance cover; and

in publication proceedings to introduce a 42-day period during which if the defendant admits liability and makes an offer leading to a settlement, the defendant is not liable for the ATE insurance premium.

In addition the CPRC suggested and approved a practice direction to implement a mandatory 12-month costs budgeting pilot for defamation and malicious falsehood proceedings. The Government will monitor the outcome of this pilot closely and hope that there will be close supervision, in particular, of hourly rates which are key to controlling costs in this area.

Rules to bring these measures into effect were included in the Civil Procedure (Amendments) Rules 2009 laid before Parliament to come into effect on 1 October 2009. Amendments to the pre-action protocols and practice directions also came into effect on the same date.

The Government have decided not to implement the other measures contained in the consultation paper at this time but will review them in the light of outcome of the pilot and recommendations made by Lord Justice Jackson’s review of civil litigation costs. We will also consider whether further measures are needed in this area.

Copies of the response paper have been placed in the Libraries of both Houses. The paper is also available on the Ministry of Justice website at: http://www.justice. gov.uk/consultations/controlling-costs-in-defamation-proceedings.htm

Copies have also been made available in the Vote Office and the Printed Paper Office.