Coventry & Ors v Lawrence & Anor (No 2) [2014] UKSC 46

In Coventry & Ors v Lawrence & Anor (No 2) [2014] UKSC 46 the Judgment was before Lord Neuberger, President, Lord Mance, Lord Clarke, Lord Sumption, Lord Carnwath.It had been ordered that the Respondents should pay 60% of the Appellants costs which was broken down into three different parts, in accordance with the Courts and Legal Services Act 1990 as amended by sections 27-31 in Part 11 of the Access to Justice Act 1999 and was split as follows:

  • “base cost” the Lawyers charges were on an hourly basis plus the disbursements.
  • Success fee – when Lawyers are acting on a conditional fee agreement (CFA) they are allowed a success fee because the agreement they are working under is for no win no fee.
  • ATE premium – is an amount paid to the insurer who has underwritten any monies due to the Respondent from the Appellant in respect of costs, if the Respondents had been the victors.

In this matter the Appellants base costs were £398,000, the success fee could have been approximately £319,000 if they had been based at the highest level permissible with the ATE being in the region of £350,000. Therefore, if the Respondents had to pay the whole of the Appellants costs up to the date of the Order they would have to pay approximately £640,000.

The Lords were very concerned at the scale of costs involved. If they ignored the success fee and ATE there still remained a large amount of legal costs and disbursements to pay, in this case £400,000, which would be a huge burden for two people to pay who were merely trying to safeguard their right to live in peace within their own home. Their house value was less than £300,000 which would then be devalued by the nuisance coupled with the appeals leaving further “base rate” costs to pay and any other costs. The Lords said that it would be wrong of them not to highlight their disquiet concerning the base costs in this matter in the hope that the powers responsible for administering Civil Justice in England and Wales would ensure an unfettered way of accessing justice through the Courts.

On the other hand the Lords considered the Respondents position. They also faced the burden of costs. They were a fairly small business paying their own costs and being responsible for paying towards the Appellants costs in the sum of £240,000 when, even though they lost, they believed in the court action for the good of their business, the strength of their case having been supported by their victory in the Court of Appeal.

The Lords assessed that the total amount of recoverable costs in the matter was probably about three times more than the base costs and the system brought in by Part 11 of the 1999 Access and Justice Act introduced some aspects which had an adverse effect on proceedings but which has since been repealed and replaced by Punishment of Offenders Act 2012.

Those aspects highlighted by the Lords involved the Claimants not having any interest in how much the base costs, success fee or ATE were as it the case was defeated they had nothing to pay and if they won, costs were paid by the Defendants with the Lawyers costs which the Defendants could not challenge except when the costs went to assessment. Defendants who lost their cases became liable for not only their costs but up to three times the Claimants “real costs”.

The Respondents in this matter were quite understandably upset at the Judge’s Order which made them responsible for 60% of the Appellants costs which translated into them paying that same percentage of the success fee and ATE. Their Barrister, Mr McCracken QC, argued that the Respondents had a grievance within article 6 of the European Convention on Human Rights and because of s.6. of the Human Rights Act 1998 the Court, which is a public body, must act within those bounds when agreeing costs ignoring the CPR and Practice Directions in respect thereof.

The Lords on looking at the case in accordance with the 1990 Act as amended by Part 11 of the 1999 Act and the CPR together with the Court judgments in Strasbourg of MGN Limited v United Kingdom (2011) and Dombo Beher BV v Netherlands (1994), which cases had been relied on by the Respondents Barrister, Mr McCracken, the Lords agreed that the Respondents might be right in their argument that their liability for costs does not fall within the European Convention on Human Rights. However, the Lords continued that they could not decide on this aspect, only the Government could address this point.

The Respondents, by their Barrister, Mr McCracken, further argued that their liability for costs under the 1999 Act costs recovery regime contravenes Article 9 of the Aarhus Convention. Articles 9.3 and 9.4 cover the areas that members of the public should enjoy access to the Courts, effective remedies and the proceedings not being “prohibitively expensive”.

If it was established by a United Kingdom Court that the 1999 Act did contravene article 6 of the European Convention on Human Rights this could have a serious outcome for the Government as people who have been adversely affected by the 1999 Act may well have a claim against them for contravening their article 6 rights.

The Lords continued that it would be wrong of them to continue to discuss this line of argument. If the Respondents wished to rely upon this then the appeal should be re-listed for hearing before the Lords after notice had been given to the Attorney-General and the Secretary of State for Justice. Following this the majority of the Lords supported Lord Neuberger’s view that there should be an adjournment for further hearing and that the Aarhus Convention would be of no assistance to the Respondents.


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