In MGN v UK 39401/04 (18 January 2011) the Fourth Section of the European Court of Human Rights today held that the finding by the House of Lords in Campbell v MGN [2004] AC 457, [2004] UKHL 22 (6 May 2004) that MGN had invaded Naomi Campbell’s did not violate Article 10 of the Convention. However, the ECHR went to hold that the conditional fee arrangement (CFA) which increased the costs recoverable by Campbell from MGN (and approved by the House of Lords in Campbell v MGN [2005] UKHL 61 (20 October 2005) was contrary to Article 10. Some relevant extracts from the judgment:

II. ALLEGED VIOLATION OF ARTICLE 10 OF THE CONVENTION CONCERNING RECOVERABLE SUCCESS FEES

157. The parties devoted extensive submissions to the precise nature of this complaint. The Court considers that the applicant’s core complaint concerned the recoverability against it, over and above the base costs, of success fees which had been agreed between Ms Campbell and her legal representatives as part of a CFA. …

198. The Court will examine whether success fees recoverable against unsuccessful defendants are “necessary in a democratic society” to achieve [the legitimate aim of the protection of the rights of others within the meaning of Article 10(2)]. In particular, it must consider the proportionality of requiring an unsuccessful defendant not only to pay the reasonable and proportionate costs of the claimant, but also to contribute to the funding of other litigation and general access to justice, by paying up to double those costs in the form of recoverable success fees. …

201. However, the Court has found the most careful scrutiny on the part of the Court is called for when measures taken by a national authority are capable of discouraging the participation of the press in debates over matters of legitimate public concern (Jersild v. Denmark, cited above, § 35; and Bladet Tromsø and Stensaas v. Norway [GC], cited above, § 64. It is, moreover, not necessary to consider, in any particular case, whether a damages award has a chilling effect on the press as a matter of fact so that, for example, unpredictably large damages awards in defamation cases are considered capable of having such an effect (Independent News and Media and Independent Newspapers Ireland Limited v. Ireland, no. 55120/00, § 114, ECHR 2005-V (extracts)). …

217. … However, the Court considers that the depth and nature of the flaws in the system, highlighted in convincing detail by the public consultation process, and accepted in important respects by the Ministry of Justice, are such that the Court can conclude that the impugned scheme exceeded even the broad margin of appreciation to be accorded to the State in respect of general measures pursuing social and economic interests (the above-cited case of Tolstoy Miloslavsky v. the United Kingdom, at § 50). …

219. In such circumstances, the Court considers that the requirement that the applicant pay success fees to the claimant was disproportionate having regard to the legitimate aims sought to be achieved and exceeded even the broad margin of appreciation accorded to the Government in such matters.

220. Accordingly, the Court finds that there has been a violation of Article 10 of the Convention.