Coventry v Lawrence  UKSC 50
In its judgment delivered on 22 July 2015, the Supreme Court upheld the costs recovery scheme introduced by the Access to Justice Act 1999 (the 1999 Act) as being valid and compatible with article 6 and article 1 of the First Protocol to the European Convention on Human Rights (the Convention). The decision was made by a majority of five to two.
The judgment acknowledged the ongoing need to balance the interest of claimants who gain access to justice through the benefit of CFAs and ATE insurance with defendants who seek to defend such claims at a reasonable and proportionate cost.
The question to be determined was not whether the scheme introduced by the 1999 Act was unfair or had flaws, nor whether a fairer approach could have been introduced, but whether it introduced a scheme that was a proportionate method of achieving a legitimate aim.
The judgment emphasised that the European Court of Human Rights had already recognised that a legislative or regulatory scheme may be compatible with the Convention even if it operates harshly in certain, individual cases.
The Supreme Court identified three factors that suggested that the scheme introduced by the 1999 Act was compatible with the Convention:
It provided a general measure which was justified by the need to widen access to justice to litigants following the withdrawal of legal aid;
It was made following wide consultation; and
It fell within the wide area of discretionary judgment of the legislature to make laws.
The potential unfairness of the scheme on unsuccessful litigants was mitigated by the role of “watchdog” played by district and costs judges when enforcing the law, whilst the defendants could also have entered into CFAs and taken out ATE insurance to protect themselves. The court also highlighted that the financial position of the paying party had never been a factor that should be taken into consideration when assessing costs.
The scheme has been repeatedly endorsed by domestic courts over a decade since its introduction, and has been legitimately relied upon by lawyers and litigants throughout. This has provided legal certainty and consistency in the scheme which points towards compatibility with the Convention.
The dissenting Judges suggested that the scheme caused some classes of defendant to be treated differently from others. In their view the scheme allowed unfair discrimination of uninsured defendants who became burdened with costs that vastly exceeded the fair and reasonable costs incurred by the claimants; just so that solicitors would be encouraged to take the initial costs risk and burden of acting for claimants in claims that may fail.
Click here to read the judgment.