Top lawyer says European judgment is 'staggeringly' important for liability insurers

Insurers could save millions by slashing success fee payments following a groundbreaking European judgment in a case involving Naomi Campbell.

Campbell's costs, including success fees, should not have been £1m when she won a privacy case against a British newspaper, judges at the European Court of Human Rights ruled.

Campbell was awarded compensation of just £3,500 for the case.

Barrister Dr Mark Friston, recognised as a leading authority on civil costs following his book, Civil Costs: Law and Practice, believes that even though the judgment is not binding, losing parties can use this case to argue for a slashing in success fee costs - and the argument has a very high chance of success.

Friston says that although the case involved privacy, it should translate across to personal injury.

Futhermore, he says the judgment will speed up the Lord Jackson recommendation on success fees, which could be incorporated into law in just a few months.

He believes losing parties could slash success fee payments by between 80% and 90% of many current payments because of the judgment.

Friston said: “For liability insurers it is staggeringly important, and it’s likely to have a dramatic impact. If I’m right, it will have a dramatic effect on what they are paying out.”