On
30 November 2012, following a 10-day trial, Mr Justice Bean dismissed a
libel claim brought by Reginald Mengi, the Executive Chairman of IPP
Ltd, a company which holds major newspaper and broadcasting interests in
Tanzania ([2012] EWHC 3445 (QB)). The defendant, Sarah Hermitage, had set up a blog
to record and to publicise as a warning to others her experience in
Tanzania; how, with no protection from the local courts and officials,
she and her husband were by threats and intimidation driven out of the
country and forced to abandon their investment in their farm,
Silverdale.
A major factor in the ordeal
they suffered in Tanzania was the hostile and defamatory coverage their
case received from IPP newspapers. Despite Mr Mengi’s evidence that he
was “not responsible, not accountable and not answerable” for the editorial content, Mr Justice Bean found that he had either “encouraged or knowingly permitted” the media campaign and was in that sense “complicit” in the “corruption and intimidation” which had helped his brother, Benjamin, to seize Silverdale farm. On this basis, he upheld the defence of justification.
Mr
Justice Bean ordered that Mr Mengi should pay the defence costs on the
indemnity basis. In reaching this decision, the factors cited by the
Judge included that the litigation was rightly described as “oppressive”, that “enormous costs had been thrown at the case from the beginning, indeed before the issue of proceedings” and that the evidence of the Claimant and his witnesses had in a number of respects been “misleading and untrue.” He further ordered that Mr Mengi should make an interim payment of £1.2million on account of the defendant’s costs.
The
case is the latest example, following those brought against Simon
Singh, Henrik Thomsen, Peter Wilmshurst and Hardeep Singh, where
individuals sued for libel by wealthy claimants have been able to defend
their rights with the benefit of conditional fee agreements. Although
herself a qualified lawyer, Sarah Hermitage was confronted by a highly
experienced legal team in England led by Richard Rampton QC, supported
by IPP’s in-house legal department in Tanzania, with apparently
limitless resources.
According to the
budget prepared for the Case Management Conference in November 2011, the
legal costs incurred by Mr Mengi even before the issue of proceedings
amounted to £298,245.07. It would have been grossly unfair for Sarah
Hermitage, who was in no position to fund lawyers to defend her, to be
expected to fight the case on her own. As Mr Justice Tugendhat stated in
an earlier judgment, when he ordered that Mr Mengi should pay into
court £1.86million as security for costs, “one of the obvious
realities…is that [Sarah Hermitage] would have difficulty in obtaining
the legal advice and representation she needs to defend this claim
without the benefit of the CFA which she has made with her solicitors.”
The
provision in the Legal Aid, Sentencing and Punishment of Offenders
(“LASPO”) Act 2012 by which success fees in conditional fee cases will
cease to be recoverable from opponents will make it more difficult for
those of limited means to obtain legal representation (see my earlier post).
In a situation, likely to be common, where the only realistic
possibility of paying a success fee will be from the damages recovered,
it will only be economically viable for lawyers to act on a “no win, no
fee” basis for claimants where the anticipated award is very high.
Defendants, like Sarah Hermitage, who have no prospect of recovering
damages, will have no means by which to compensate the lawyers for the
risk they take when acting on a conditional fee basis.
Access to justice requires that litigants must have a practical “opportunity to present their case effectively before the court” without an “unacceptable inequality of arms” between the parties (See Steel and Morris v UK, 68416/01 [2005] ECHR 103).
There is a serious risk, illustrated by the Sarah Hermitage case, that
the effect of the LASPO Act will be to deprive deserving litigants of
the legal representation they need.
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