The no-win no-fee regime and libel tourism are having a serious chilling effect on the right to freedom of expression, according to a submission to the European Court of Human Rights.
The assertions are made by a group of organisations which have been given permission to intervene in the case taken to the Strasbourg court by MGN, publisher of the Daily Mirror.
The newspaper group has made two applications to the European Court of Human Rights following the decision in the Naomi Campbell case - one is about the model's claim for breach of confidence, and the second about the operation of the conditional fee agreement regime, which left it facing a massive costs bill following the hearing in the House of Lords.
The applications are being dealt with together.
The intervention is being made by the Open Society Justice Initiative, writers' group English PEN, the Media Legal Defence Initiative and non-governmental organisations Global Witness, Human Rights Watch and Index on Censorship.
The submission points out that while MGN might be a large news organisation, CFAs and the high costs with which they are associated in defamation actions have a serious "chilling effect" on smaller news organisations, which are often involved in investigative reporting and spreading information and ideas on matters of public interest.
"Any system which causes excessive costs to be awarded in defamation and privacy cases operates as a serious and unjustifiable restriction on their freedom of expression," it says.
"In the most extreme cases this might amount to what Lord Hoffmann has dubbed the 'blackmailing effect' whereby a claimant is able to commence a meritless action with no financial risk while running up massive costs for the defendant."
The document quotes the case of one newspaper with a circulation of 11,000 which published an apology and paid substantial damages and costs after publishing a letter from a reader because fighting the case and losing against a claimant on a CFA with a "success fee" would have closed the title completely.
The submission also quotes the recent study by the Programme in Comparative Law and Policy at Oxford University's Centre for Socio-Legal Studies which showed that fees in libel cases in the UK are 140 times higher than in the rest of Europe.
The research indicated that a claimant in England and Wales on a CFA incurred substantially higher costs than a defendant operating without a CFA.
The research also showed that the CFA regime failed to respect the "important principle" that costs awarded against an unsuccessful publisher in libel case must be proportional to the value of the claim.