The End of Recoverability?

Andy Moroz

Andy Moroz Senior Costs Consultant


In Coventry & Ors –v- Lawrence & Anor (No 2) [2014] UKSC 46, the Supreme Court has refused to order payment of a recoverable, pre-1 April 2013, success fee and ATE premium, while suggesting that it might make a declaration of incompatibility in respect of the recoverability of additional liabilities inter partes, stating that the law as it stood prior to 1 April 2013 could breach a paying party’s right to a fair trial under Article 6 of the European Convention of Human Rights, and as an unjustified deprivation of property, contrary to Article 1 of the First Protocol of the Convention. The matter has been adjourned to allow the Government the opportunity to respond. It should be stressed that the Supreme Court has merely said that it could make such a declaration if the Defendant’s arguments are correct and that no decision has been made as yet, despite the rather forthright language used in the judgment to describe the pre-Jackson regime. Any decision made will have no bearing on post-1 April 2013 CFAs but might impact on ATE premiums in clinical negligence claims.

At first glance, this all seems no more than a re-hashing of the arguments pursued, without success, in Campbell –v- MGN (No. 2) [2005] UKHL 61; however, Campbell was concerned with a potential breach of Article 10 of the Convention rather than Article 6, with the arguments being based on Ms Campbell’s means.

There was also some suggestion that the Defendant in Coventry might bring further arguments against the recoverability of additional liabilities based on Article 9 of the Aarhus Convention; however, Lord Neuberger did suggest that such a point was unlikely to succeed if argued from a Defendant’s perspective – perhaps there are grounds there for arguing that Jackson’s reforms are unlawful from a Claimant perspective?

Prior to any final decision being reached as to incompatibility in Coventry, it would seem that the law on recoverability presently stands as stated by the Court of Appeal in Sousa –v- London Borough of Waltham Forest Council [2011] EWCA Civ 194 when, in dismissing submissions to the effect that additional liabilities should not be recoverable based on the ECHR’s decision in Campbell, Moore-Bick LJ stated:

“It is for Parliament to decide what arrangements viewed overall will best serve the general requirement for access to justice. Moreover, the submission is contrary to the decision of the House of Lords in Campbell v MGN (No. 2), which remains binding on this court.”

In the absence of a final decision in Coventry, pre-1 April 2013 additional liabilities remain recoverable. Applications to stay costs proceedings pending that final decision should be resisted on the basis that the additional liabilities are payable as the law presently stands.  For how long those additional liabilities will prove recoverable, and whether the government will have to compensate the insurance industry at ruinous expense, remains to be seen.