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The editor of the Daily Mail last week came out to attack Conditional Fee Agreements (‘CFAs’) and After the Event (‘ATE’) insurance premiums, blaming them for a spike in complaints against the newspaper.

Paul Dacre, the editor of the Daily Mail, last week told the PressGazette that the complaints he receives against the newspaper have increased in recent years due to “the emergence of a new breed of predatory, ambulance chasing lawyers using the incentives of Conditional Fee Agreements and After the Event Insurance premiums to get as much money as they can out of newspapers”.

the basic principle of CFAs and ATE premiums is that the fee is not usually payable if the client is unsuccessful in their case
This is an interesting comment, not least as the basic principle of CFAs and ATE premiums is that the fee is not usually payable if the client is unsuccessful in their case. In order for the premium to be payable (usually by the losing party), the client needs to win. Equally, most ATE premiums are heavily discounted if a case settles at an earlier date so, settle early and the additional liability is often negligible.

BUT CAN ATE HELP THE PRESS?

If Mr Dacre is concerned that defending these claims will result in the paper losing money, he can take great comfort from the fact that the Claimant’s ATE policy would reimburse the Daily Mail’s costs in the event that they successfully defend the allegations.

This ought to be preferable from the Daily Mail’s perspective given that the alternative would require an often lengthy enforcement process against the claimant. Moreover, where the claimant is of limited means (as is often the case given that most claimants who pursue newspapers are individuals), this process could prove futile.

ATE IN LIBEL ALONE DOESN’T GIVE THE FULL PICTURE

There is a key trend with arguments concerning ATE insurance and CFA success fee recoverability in that the debate is typically focused on one or two isolated areas of litigation (libel and personal injury actions in the main).

Focusing on these two distinct areas of law often doesn’t address the debate as a whole, perhaps as those defending such cases have shouted the loudest since the reforms to the civil cost system were put forward by Lord Justice Jackson. For example, where is the impact analysis for professional negligence cases, insolvency litigation or SME business disputes to name just a few areas?

Some groups, including the Professional Negligence Lawyers Association (PNLA), have started to co-ordinate their efforts in a bid to delay the implementation of the Legal Aid, Sentencing and Punishment of Offenders Bill pending investigations into media reporting of the planned changes. But is the force of the media giants and liability insurers simply too great for the government to sustain?