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On appeal from: [2012] EWCA Civ 26

The Supreme Court was required to consider an outstanding question that arose out of proceedings concerning a claim in nuisance. That question related to whether the provisions of the Access to Justice Act 1999 regarding the recovery of costs in civil litigation in England and Wales are compatible with the European Convention on Human Rights, art 6, which protects the right to a fair trial, and the first protocol, art 1.

The Appellants had proceeded under a conditional fee agreement. The provisions of the Access to Justice Act 1999 meant that in addition to paying 60% of the Appellants’ base costs, the unsuccessful Respondents had also been ordered to pay 60% of a success fee to the Appellants’ lawyers and 60% of the Appellants’ After the Event insurance premium.  The Respondents challenged their liability to pay the success fee and the ATE premium.

The Supreme Court held by a majority of 5 to 2 that the costs recovery scheme under the Access to Justice Act 1999 is compatible with the ECHR, art 6. In giving the joint leading judgment, Lord Neuberger and Lord Dyson noted that key aims of the costs recovery scheme were to contain the rising cost of legal aid, to improve access to the court for the public where they have meritorious claims, and to discourage weak claims. The scheme has a legitimate aim, namely to achieve the widest possible access to legal services for civil litigation funded by the private sector. The question was therefore whether the costs recovery scheme is a proportionate way of achieving the legitimate aim pursued. The Supreme Court noted that the European Court of Human Rights recognises that a regulatory scheme may be compatible with the ECHR, even if it operates harshly in individual cases. It concluded that the scheme as a whole was a rational and coherent scheme for providing access to justice and accordingly the scheme was not incompatible with the ECHR, art 6 or the first protocol, art 1.

Lord Clarke gave a dissenting judgment, with which Lady Hale agreed, arguing that the costs recovery scheme was disproportionate because it did not treat all defendants in the same way and instead chose a certain class of defendants to impose liabilities beyond the bounds of what was reasonable or proportionate.

For judgment, please download: [2015] UKSC 50

For Court’s press summary, please download: Court’s Press Summary

For a non-PDF version of the judgment, please visit: BAILLI

To watch hearing, please visit: Supreme Court website