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Defamation Law

15th July 2010

Jonathan Djanogly opens a debate on plans to review the law on defamation following concerns about the effect of the current law on freedom of speech, particularly in academic and scientific debate, the work of NGOs and investigative journalism and also to deal with so-called libel tourism.

The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly): I am delighted to open today's debate on an issue that the Government regard as being of great importance to our country. As the coalition agreement made clear, we are firmly committed to reviewing the law on defamation to protect free speech. That commitment was reflected in the announcement made last week by my noble Friend Lord McNally on behalf of the Government that we will be publishing a draft defamation Bill for consultation and pre-legislative scrutiny in the first session of this Parliament, with a view to introducing a substantive Bill as soon after that as parliamentary time allows.

That decision stems from our recognition of the concerns raised over recent months about the detrimental effects that the current law may be having on freedom of expression, particularly in relation to academic and scientific debate, the work of non-governmental organisations, investigative journalism and the extent to which this jurisdiction has become a magnet for libel claimants. In reviewing the law, we wish to focus on ensuring that freedom of speech and academic debate are protected and that a fair balance is struck between freedom of expression and the protection of reputation. We want to ensure that the right balance is achieved, so that people who have been defamed are able to take action to protect their reputation where appropriate. However, that should be done in such a way that free speech is not unjustifiably impeded.

That will help to ensure that responsible journalism and academic and scientific debate are able to flourish, and that investigative journalism and the valuable work of non-governmental organisations are not unjustifiably hampered by actual or threatened libel proceedings. Ensuring that the right balance is struck is a difficult and sensitive exercise. It raises very complex issues, on which a wide range of differing views are likely to be held. In recognition of that, any proposals for reform will need to be the subject of extensive and thorough consultation. With that in mind, publication of a draft Bill for pre-legislative scrutiny represents the most effective approach to achieving fully considered legislative proposals that focus on core issues of concern where legislation can make a real difference.

Alongside our considerations on the substantive law, we are also determined to ensure that costs in all civil proceedings, including defamation, are proportionate. The Government are very grateful to Lord Justice Jackson for his comprehensive report, "Review of Civil Litigation
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Costs," which makes a broad range of significant and positive recommendations for reducing high costs in the civil justice system. We are urgently assessing Sir Rupert's main proposals on the reform of conditional fee agreements and how they could be taken forward.

Sir Rupert's recommendations apply to all categories of case where CFAs are used, and that includes defamation cases. I am aware of the significant concerns in some quarters about the level of costs in defamation cases, but it is important that any changes in defamation are considered alongside those in other areas of civil litigation where high costs are a concern. We are committed to addressing those issues in the round and to dealing with the problems created by high costs while also ensuring that there is appropriate access to justice for claimants.

The previous Government attempted a rushed and rather limited reform to limit costs in defamation cases only. As hon. Members may know, that measure was not recommended to the House by the Committee that considered it on 30 March. We must tread carefully. We will consider all the options for addressing high costs, including those proposed by the previous Administration and, as I am sure my hon. Friend the Member for Maldon (Mr Whittingdale) will be pleased to know, by the Select Committee on Culture, Media and Sport in its recent report, "Press Standards, Privacy and Libel." We will consider those proposals alongside Lord Justice Jackson's recommendations in determining the next steps. We hope to announce the way forward as soon as possible.

It is not possible for me to indicate today exactly what provisions may be included in the Government's draft Bill on defamation. However, a number of areas have already been the subject of much discussion and debate, and I can confirm that we will be giving further consideration to them with a view to including provisions in the draft Bill. In particular, we recognise the strength of the calls that have been made for a statutory defence relating to the public interest and responsible journalism. As hon. Members will be aware, a common law defence has been developed by the courts in recent years-initially in the case of Reynolds v.Times Newspapers Ltd and Others, which offers a defence that may be relied on even where the defendant cannot prove the truth of what has been published, provided he or she acted responsibly in all the circumstances.

However, concerns have been expressed by non-governmental organisations, the scientific community and others that there is a lack of certainty over how the Reynolds defence applies outside the context of mainstream journalism, and that that has a somewhat chilling effect on freedom of expression and investigative reporting. This is a complex area of the law, and we want to give further consideration to whether and how a statutory defence can be framed in a way that is beneficial and appropriate for a range of different contexts.

We also recognise the criticism that English defamation law has received as a result of the perception that libel tourists are issuing proceedings in London, rather than in other jurisdictions with which their claim may have a significantly greater link. Differing views have been expressed about the extent of problems in that area, and whether the threat of libel proceedings by wealthy foreigners and public figures is used to stifle investigative journalism, regardless of whether actual cases are ultimately brought. A number of proposals have been made on how that issue can be tackled, and we will be examining those carefully. We want to make sure that the concerns raised in that area are addressed in an effective and proportionate way.

We are also aware of the concerns that have been expressed in the media and elsewhere about the difficulties of the so-called multiple publication rule, whereby each publication of defamatory material gives rise to a separate cause of action subject to its own limitation period, which causes problems in relation to online material. The effect of the multiple publication rule is that publishers are potentially liable for any defamatory material published by them and accessed online. The rules applies however long after the initial publication the material is accessed, and whether or not proceedings have already been brought in relation to the initial publication. We will be considering how best we can frame a single publication rule to remove the threat of open-ended liability that currently exists.

In addition to the areas I have just mentioned, the private Member's Bill introduced in another place by Lord Lester of Herne Hill contains provisions on a substantial number of other issues. In particular, Lord Lester's Defamation Bill takes in provisions on renaming and codifying the existing defences of justification and fair comment; the basis on which an action for defamation can be brought; the ability of corporations to bring defamation actions; trial by jury; defamation in the context of internet publication; and issues relating to absolute and qualified privilege, including parliamentary proceedings.

Those important issues merit further consideration in the context of the Government's review of the law. However, it is important to ensure that the views of a range of interested parties are taken into account before deciding whether it is appropriate to include such provisions in the Government's draft Bill. We therefore intend initially to conduct informal discussions over the summer with interested parties to ensure that we can reach a fully informed assessment of the merits of reform in those areas, and on any other issues that may be of concern. In the light of those discussions, we hope that it will then be possible to move towards publication of a draft Bill in the new year.

As part of that process, the views of those within Parliament are obviously of considerable importance. Lord Lester's Bill has provided an important, timely and well reasoned contribution to the process, although the Government's draft Bill may, of course, not necessarily reflect all the issues he has raised, or indeed be restricted to them. The views of those within Parliament are obviously of considerable importance to us in reviewing the law.

The Second Reading of Lord Lester's Bill last week provided an opportunity for those in another place to make their views known, and an extremely helpful and wide-ranging debate took place. I hope that the Government's decision to secure today's debate will provide an opportunity for hon. Members to express their views on those important matters, so that we can consider them when deciding how best to move forward.

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Mr Djanogly: I thank the hon. Member for Newcastle-under-Lyme (Paul Farrelly) and my hon. Friend the Member for Maldon (Mr Whittingdale) for the interesting and helpful views that they have expressed during the debate. I recognise that the co-operative approach taken by the hon. Member for Warrington North (Helen Jones) is the best way to help the Bill to become law.

The wide range of issues that have been raised and the strongly held opinions that exist serve to illustrate the complexity of this debate. They also show the importance of finding solutions that are workable in practice and will achieve a fair balance that preserves and upholds the right to freedom of speech, while not preventing people from taking action to protect their reputation from defamatory material where appropriate. The views that hon. Members have put forward will be of considerable help to the Government in developing proposals for a draft Bill that will endeavour to strike the right balance on those important and sensitive matters.

As I said at the beginning of the debate, I am not in a position today to indicate exactly which provisions may be included in the draft Bill, or to set out conclusively the Government's position on all the individual points raised. However, I assure hon. Members that I will take all the views that have been expressed fully into account, together with those views that have emerged from the recent debate in another place and the outcomes of the informal consultation with interested parties that will take place over the summer. A large number of points have been raised, and I would like to expand on some of them. I do not wish to restrict the consultation process in any way but, I repeat, today is about the Government encouraging debate, not about providing conclusions.

In that vein, let me congratulate my hon. Friend the Member for Maldon on his re-election as Chair of the Culture, Media and Sport Committee, not least because he can now see through his Committee's valuable work on defamation. In a report published earlier this year, the Committee made recommendations on a range of issues relating to the law of libel. Those included proposals about a responsible journalism defence, libel tourism, the defences of justification and fair comment, the ability of corporations to bring libel actions, the early resolution of meaning and issues relating to the internet, and the multiple publication rule.

On CFAs, the Committee agreed that costs were too high and that reform was needed. As my hon. Friend said, the Committee also recommended that in defamation cases, CFA success fees should remain at 100% of base costs, but that only 10% should be recoverable from the defendant. The Committee's approach therefore differed from both the previous Government's proposal to impose a maximum success fee of 10%, and from Lord Justice Jackson's recommendation to abolish the recoverability of the success fee and the after-the-event premium.

I am grateful to my hon. Friend and the members of his Committee for the valuable contribution to the debate made by that report. As the hon. Member for Stoke-on-Trent North (Joan Walley) noted, many of the issues raised were also included in a report entitled "Free speech is not for sale", which was published by English PEN and Index on Censorship last autumn, in a report by the Ministry of Justice's libel working group in March this year, and in Lord Lester's private Member's Bill. I would like to extend the Government's thanks to all those involved in considering those important matters. I confirm that their views will be taken into account both in our review of the substantive law and in how we progress the issue of CFA reform.

Paul Farrelly: Will the Minister give way?

Mr Djanogly: I am moving on to CFA reform, if that is what the hon. Gentleman wishes to speak about.

Paul Farrelly: It is.

Mr Djanogly: Then the hon. Gentleman should listen-I knew that I would not get away by saying just that. He addressed the issue of cost and mentioned the statutory instrument produced by the previous Government at the end of the previous Parliament. I would like to explain our thinking on that issue. I confirm to him and to my hon. Friend the Member for Maldon that we are firmly committed to taking timely action to reduce the high costs under CFAs, while ensuring appropriate access to justice. As my hon. Friend spelled out in great detail, the high cost of CFAs is a concern not only in defamation proceedings, but more widely across other areas of civil litigation. I was pleased that he thought it important to look at the issue in the round, and I confirm that we will not delay the process as a consequence of that.

I am conscious that, as the hon. Member for Warrington North said, the attempt by the previous Government to limit CFA success fees in defamation cases through the Conditional Fee Agreements (Amendment) Order 2010 was not recommended to the House of Commons by the Committee. The Labour Government seemed to believe that by reducing the success fee mark up on CFAs and defamation cases, the problems that we are debating today would simply go away. It is true that those who were not rich would have been denied access to justice, but that would not have been the case for a wealthy individual or a corporation that wanted to suppress academic or scientific research, because they would not have wished to use CFAs in the first place. That blundering piecemeal approach is exactly what the Government intend not to pursue, and we will be looking at the issue in the round. I was pleased to hear the hon. Lady agree to that.

Paul Farrelly: The issue is complex. One person who was relieved that the statutory instrument did not succeed was Peter Wilmshurst, who is a consultant cardiologist at Shrewsbury and the University hospital of North Staffordshire. He is being sued by an American company, NMT Medical, and is being defended under a CFA. His problems are that there is one-way traffic. There are costs and delays and ultimately, he has no guarantee of getting his costs back if he is successful in countersuing for libel, or if NMT Medical loses the case. That is an example of the complexity of the issue, and the way that the libel laws urgently need to be reformed because of the costs and complexities involved, and the ability of companies to silence scientific debate.

Mr Djanogly: I disagree that the proposed order would have had the immediate impact that the hon. Gentleman suggests. However, we are moving on and the process is under way. That order sought only to reduce success fees in defamation-related proceedings. Although those proceedings are important, we know that CFAs have been a cause of major concern in other areas such as clinical negligence cases against the NHS, or in the context of the so-called "compensation culture" debate.

The change that the order sought to achieve was inconsistent with more considered proposals in the field, which were known to the Government at that time. Lord Justice Jackson spent a year considering those proposals and wider issues, and made recommendations in January this year for the reform of CFAs across all areas of civil litigation. In addition, the report by the Culture, Media and Sport Committee entitled, "Press Standards, Privacy and Libel" was published under the chairmanship of my hon. Friend the Member for Maldon. The Government recognise the urgency and the complexity of these issues, but we strongly believe that it is important to consider the case for potential reform across all areas of civil litigation, rather than confine it to individual areas. Lord Young of Graffham is currently conducting a review into health and safety law and the compensation culture, and we await his report with interest. We are examining the options for reform and will announce the way forward as soon as possible.

My hon. Friend the Member for Maldon discussed funding litigation in a wider context, and I should add that Lord Justice Jackson is persuaded that solicitors and barristers should be permitted to use so-called "contingency fees" in litigation, subject to appropriate regulation and arrangements for costs recovery. Contingency fees are a type of no win, no fee agreement, under which the lawyer's fee is payable only if the client wins, and is calculated as a percentage of the sum recovered. Importantly, the lawyer's fee is a percentage of the damages, rather than being fee-based. That type of funding is widely available in other jurisdictions, but is not permitted in civil litigation in England and Wales. Lord Justice Jackson considers that contingency fees could increase access to justice. We shall also need to consider his recommendations on that issue.

My hon. Friend the Member for Maldon expressed concern on libel tourism. There is a widespread perception that the English courts have become the forum of choice for those who want to sue for libel and that that is having a chilling effect on freedom of expression in other countries. For example, in the USA, a number of states have introduced legislation to prevent foreign libel judgments from being enforced there. I understand that legislation on the issue completed one of its stages in the US Senate this week. My hon. Friend mentioned that.

Although we need to review the implication of that possible law and other laws, such as those coming from the EU, as far as they relate to English jurisdiction, I am concerned that we should not be stampeded into basing our laws on an American world view of free speech. My hon. Friend the Member for New Forest East (Dr Lewis) expressed that point very well in his strong and valuable intervention.

There are mixed views about how far libel tourism is a real problem. A wide range of interesting views were expressed in the Second Reading debate on Lord Lester's Bill in another place on 9 July, including by Lord Hoffmann, who in his speech and in a very interesting lecture earlier this year was extremely sceptical about the extent of any problem in that area. The problem with the Ehrenfeld case, for instance, is that she did not defend the action, so it is difficult to draw conclusions from it. Lord Hoffmann suggested that Dr Ehrenfeld could have relied on the Reynolds defence. I make no comment on that, but those issues will need to be reviewed.

Research that we conducted in the context of the Ministry of Justice libel working group's consideration did not show any significant number of actual cases involving foreign litigants in the High Court in 2009. However, non-governmental organisations have said that a major problem arises from the threat of libel proceedings by wealthy foreigners and public figures, which is used to stifle investigative journalism, regardless of whether actual cases are in the end brought, so the number of cases alone may not accurately reflect the extent of the problem.

A number of possible approaches have been proposed to deal with any problems that exist. For example, the libel working group proposed procedural steps to tighten the rules and practice in order to head off inappropriate claims at the earliest possible stage in cases in which court permission is required to serve a defamation claim outside England and Wales. Lord Lester's Bill has adopted a different approach, which focuses on whether the publication in England and Wales can reasonably be regarded as having caused substantial harm to reputation, having regard to the extent of publication elsewhere. We shall consider those proposals and other possible options carefully in reaching a decision on the way forward. In doing so, we will of course have to keep it in mind that there is relevant European legislation-in particular, the Brussels I regulation on jurisdictional matters-with which we shall need to ensure compliance.

The hon. Member for Newcastle-under-Lyme discussed the timing of our considerations of the Jackson review. I can advise him that we intend to revise the relevant cost-related recommendations in conjunction with our review of legal aid. That will be consulting in the autumn of this year, which he will appreciate is before the time when the draft defamation Bill is to be tabled for consultation.

Paul Farrelly: May I come back on that, as the Minister might have expected? I think that I noticed the quizzical brow of my friend the Chairman of the Select Committee, the hon. Member for Maldon (Mr Whittingdale). The Minister's statement on going ahead and more consultation in line with the reforms to legal aid has left me none the wiser as to when that process will come to an end.

Mr Djanogly: As I said, I cannot at this stage give a firm date for when a draft Bill will be published or for when the legal aid consultation will finally be settled. However, I can tell the hon. Gentleman that those matters are moving forward at speed. The legal aid consultation will be published in the autumn. I hope that he will take some comfort from the fact that we are not pushing the issue into the long grass.

Paul Farrelly: With respect, I think that comfort will be taken in certain quarters-I can hear the Bollinger corks popping as we speak.

Mr Djanogly: Given the time for which the present Government have been in position, the hon. Gentleman should appreciate that we are moving fairly quickly, despite his suggestion of Bollinger corks popping.

The hon. Gentleman mentioned super-injunctions. In the light of recent concerns highlighted in the Trafigura case and the John Terry case, the Master of the Rolls has established a committee to examine the use of super-injunctions, the principle of open justice and other issues relating to injunctions that bind the press. As the concerns are largely procedural, relating to notification, service of documents and the application of the civil procedure rules and practice directions, it is appropriate for the judiciary to take a lead in that matter. There was a meeting of the committee at the end of June, so I can confirm that the matter is proceeding.

My hon. Friend the Member for Maldon discussed the important issue, contained in Lord Lester's Bill, of parliamentary proceedings being protected by privilege. I agree that that will need to be reviewed carefully, and possibly in the context of a wider parliamentary privilege Bill.

The hon. Member for Newcastle-under-Lyme asked whether restrictions should be placed on the ability of corporations to bring claims for libel. I think that he was referring to clause 11 of Lord Lester's Bill, which would require a claimant corporation to show that the publication complained of had caused or was likely to cause it substantial financial loss. English PEN and the Select Committee suggested that restrictions should be placed on the ability of corporations to sue and that key elements should be a requirement for a corporation to prove actual damage to its business, and the burden of proof being altered.

The introduction of reforms to restrict the circumstances in which corporations could bring a claim would certainly be controversial and would raise a number of legal and practical issues-for example, whether claims between competing companies should be treated differently from those where a company is suing an individual or a newspaper, and how any provisions would affect corporate bodies that are not businesses, such as academic institutions. Also unclear is the extent of any problem in that area and how any difficulties could best be addressed. We would need to consult on and consider the issue most carefully.

As I said, we aim to publish our draft Bill for formal consultation and pre-legislative scrutiny in the new year. I am sure that all the issues raised today will be the subject of extensive further discussion both within and outside Parliament in the context of that consultation and more generally. It is of great importance that we ensure that the law achieves a fair balance between freedom of expression and the protection of reputation. I thank hon. Members again for the valuable contribution to the ongoing debate on these issues that they have made today.

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