Libel trials should be heard by judges sitting without juries, Lord Justice Jackson recommends.
He also proposes an increase in libel damages of 10 per cent and making claimants pay the “success” fees that their lawyers charge if they succeed with a “no win, no fee” claim.
But success fees need not be capped, as he recommends for accident cases, because in libel claims, damages payments would not have to be used to fund future personal care bills. In accident cases he suggests an uplift limit of 25 per cent, compared with the 100 per cent that can be charged now.
Referring to libel claims, he said: “The main vindication is vindication by the judgment of the court or the statement in court after settlement. I see no reason why such claimants should not be prepared to pay a substantial proportion of the damages to their lawyers as success fees.
“I do not accept that such a regime would amount to a denial of justice,” he added.
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He also said that claimants in libel cases have to be protected against the risk of paying out huge costs because usually the claimant in such cases is of modest means and the defendant a well-resourced media organisation.
But, he said, the present system and the way it seeks to protect claimants “is the most bizarre and expensive system that it is possible to devise.”
The case brought by the supermodel Naomi Campbell was the classic example of the flaws in the way the costs regime has been working. The law lords in 2004 overturned a ruling that the Daily Mirror had been justified in publishing information and pictures of her leaving a drug addiction treatment centre.
The newspaper then faced total costs of more than £1 million and lost an appeal over the costs.
It highlighted how a fees regime brought in to widen access to justice had turned into a costs industry that could leave media organisations at the mercy of claims they could not afford to defend.