Coventry & Ors v Lawrence & Anor

Factual and Procedural Background

The case concerns a long-running dispute between the owners of a residential bungalow (“the Appellants”) and the operators of a nearby speedway stadium (“the Respondents”). The Appellants succeeded at trial on their claim in private nuisance, obtaining damages of £20,750 and an injunction restricting noise levels. The trial judge also ordered the Respondents to pay 60 % of the Appellants’ costs. The Court of Appeal reversed the nuisance finding, but the Supreme Court reinstated the trial judge’s order in two earlier judgments.

The current, third judgment addresses the Respondents’ argument that being required to pay the Appellants’ success fees and after-the-event (ATE) insurance premiums—in addition to base costs—violates Article 6 of, and/or Article 1 of Protocol 1 to, the European Convention on Human Rights. The challenged cost items arose under the funding regime created by Part II of the Access to Justice Act 1999, which allowed successful litigants to recover conditional fee agreement (CFA) uplifts and ATE premiums from the losing party.

Legal Issues Presented

1. Whether the recoverability from the Respondents of the Appellants’ CFA success fees and ATE insurance premiums contravenes their rights to a fair trial under Article 6 of the Convention.
2. Whether such recoverability unjustifiably interferes with the Respondents’ peaceful enjoyment of possessions, contrary to Article 1 of the First Protocol.
3. If incompatibility exists, what, if any, remedial action should the court take (e.g., reading down or disapplying parts of the Costs Practice Direction (“CPD”)).

Arguments of the Parties

Respondents’ Arguments

• The 1999 costs regime is incompatible with Article 6 and A1P1 because it imposes excessive and arbitrary financial burdens on a subset of losing parties.
• Sir Rupert Jackson’s Review and the ECtHR judgment in MGN v United Kingdom identified four systemic “flaws”: lack of focus, no incentive to control costs, a “chilling” effect on defence, and scope for “cherry picking” easy wins.
• Paragraphs 11.7 and 11.9 of the CPD compel costs judges to ignore overall proportionality and the payer’s circumstances, thereby denying equality of arms.
• Less intrusive alternatives were available (e.g., levies on all adverse-costs payments, limiting the regime to well-resourced defendants, or requiring judges to consider total proportionality and payer means).
• The court should “read down” CPD 11.9 under the Human Rights Act 1998 to permit a holistic proportionality review, including the Respondents’ financial position.

Appellants’ Arguments (supported by the Secretary of State for Justice and professional bodies)

• The regime pursues the legitimate aim of widening access to justice after the contraction of civil legal aid.
• Costs assessment safeguards (reasonableness test, proportionality of base costs, and the court’s power to cap costs) protect paying parties.
• The scheme is a general legislative measure formed after wide consultation; occasional hard cases do not invalidate it (Animal Defenders principle).
• MGN v United Kingdom dealt with Article 10, not Article 6 or A1P1; the balancing exercise is therefore different.
• Reading down CPD 11.9 would undermine the statutory scheme by deterring lawyers from accepting CFAs and thereby restrict access to justice.

Table of Precedents Cited

Court's Reasoning and Analysis

Delivering the majority judgment, Judge Neuberger and Judge Dyson held that the 1999 scheme is a general legislative measure designed to replace legal-aid funding and therefore attracts a wide “discretionary area of judgment.” The court:

• Accepted that the scheme could produce harsh results in individual cases, but emphasised that Convention compatibility must be assessed “in the round.”
• Distinguished MGN v United Kingdom on the basis that Article 10 rights of the media require exceptional scrutiny; the present case involves a balance between competing Article 6 rights of private litigants.
• Found that costs judges act as “watch-dogs” able to disallow unreasonable or disproportionate items; respondents may also enter CFAs or obtain ATE insurance.
• Concluded that paragraphs 11.7 and 11.9 of the CPD are integral to incentivising lawyers to undertake CFA work; removing them would imperil access to justice.
• Considered but rejected alternative, less intrusive funding models as speculative, administratively complex, or inconsistent with parliamentary design.
• Placed significant weight on the legitimate expectations of parties and practitioners who had relied, for more than a decade, on appellate endorsement of the scheme.

A minority (Judge Clarke and Lady Hale) would have held the scheme discriminatory and disproportionate, largely adopting the reasoning in MGN v United Kingdom.

Holding and Implications

HELD: The recoverability of CFA success fees and ATE insurance premiums under the Access to Justice Act 1999 scheme is compatible with Article 6 and Article 1 of Protocol 1 of the European Convention on Human Rights.

Consequently, the Respondents remain liable, in principle, for 60 % of the Appellants’ success fees and ATE premiums subject to conventional costs assessment. The decision preserves the pre-2013 costs regime for thousands of pending “run-off” cases and avoids retroactive disruption of settled funding arrangements. No new precedent is set beyond reaffirming the constitutionality of the 1999 Act scheme in non-media contexts.