The libel system that has cost UK news organisations millions of pounds in past years is under review via a Ministry of Justice consultation paper.

Newspapers and other media say the no-win, no-fee libel system allows claimants to hold newspapers ransom. If newspapers win a case, they usually have no chance of recovering any costs from claimants who have no money to pay their fees.

If the newspapers lose the case, claimant's lawyers “can claim an 'uplift' on their normal fees ... In libel cases, a 100 percent 'success fee' is common, giving (claimants' lawyers) double their usual fees, payable by the losing media company,” according to a UK legal advice group.

The system was designed to give less wealthy claimants “access to justice,” Press Gazette reported, and was used by Naomi Campbell in her famous privacy case against the Daily Mirror. The Daily Mirror's head of legal Marcus Partington said in 2005 the law firm Schillings sent the Mirror a 594,000 pound bill for representing Campbell at a two-day House of Lords hearing about the case. Schillings charged the newspaper 4,500 pounds for attending a 15 minute formal hearing.

According to a consultation paper, the Ministry of Justice is looking at two ways to reform the system. First is the option of doing nothing, which “would retain the existing funding procedures with its complexities and increase legal challenges on cost issues.”

The second option is to regulate success fee charges made by claimant lawyers, with a sliding scale of fees from zero to 75 percent. In cases where immediate liability is accepted, no success fee would be charged, according to Press Gazette.

The paper, Conditional Fee Agreements in Publication Proceedings, Success Fees and After the Event Insurance, is available on the Ministry of Justice Web site. The consultation is set to close Oct. 31.