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Defamation Bill

Volume 561: debated on Wednesday 24 April 2013

Consideration of Lords message

Clause 1

Serious harm

I beg to move,

That this House agrees with Lords amendment 2B in lieu of Lords amendment 2, to which this House has disagreed.

The reasons that this House gave for disagreeing to certain amendments to the Bill have been considered in the other place, and a further amendment has been agreed there that now requires consideration by this House. I ask the House to agree to Lords amendment 2B.

The Lords amendment is to clause 1 and makes it clear that a body that trades for profit will satisfy the serious harm test only if it is able to show that the statement complained of has caused that body, or is likely to cause it, serious financial loss. As I made clear when we originally considered Lords amendments, we recognise the strength of feeling that exists on whether there should be a specific provision in the Bill on the issue. I indicated that I would consider the matter further, and the amendment reflects the outcome of those considerations.

As the Government explained at earlier stages of the Bill’s passage, we amended what was initially a “substantial harm” requirement to one of “serious harm” to raise the bar for bringing defamation claims. The Lords amendment therefore refers to “serious financial loss”, to reflect that aim, and is now linked explicitly with the serious harm test.

We consider that the approach that we have taken is clearly preferable to that in the earlier Lords amendment 2 for two main reasons. First, the use of the words “serious financial loss” makes it absolutely clear that the financial loss required to meet the serious harm test must itself be serious. By contrast, the reference in the earlier amendment to “substantial financial loss” could inadvertently have weakened the requirements of what must be shown to satisfy the test.

I am sure that my hon. and learned Friend will go into details about the motion that he tabled, but as we have made clear, we think it is helpful that there will be a direct link between serious harm and serious financial loss. That will make the situation absolutely clear to those wishing to bring an action.

The second reason why Lords amendment 2B is preferable to the earlier Lords amendment 2 is that the term that we have used to define those who will be subject to the requirement—

“a body that trades for profit”—

is a much clearer and simpler definition. Those are the bodies about which people have expressed concern, so we have phrased the amendment specifically and directly to meet those concerns.

I believe that the Lords amendment represents an effective and proportionate approach that addresses the concerns that have been expressed in this House and elsewhere. I urge the House to support it.

Thanks to a lot of hard work—especially in the other place, it has to be said—the Bill is now in a much better place. It is still far from perfect, sadly, which is a huge shame. It could have been perfect and a marvel to behold, but sadly the to-do list in the Bill includes early strike-out, website operator regulations and clarification for booksellers of the innocent dissemination rules, about which they were concerned. It also includes costs, which are a strange case, because we are really no further forward on them.

Indeed, we are left in a wholly unsatisfactory place. The last-minute announcement of a consultation on costs over the summer shows how sloppily this Government have treated parts of the Defamation Bill. The mess in respect of defamation, Leveson and the Legal Aid, Sentencing and Punishment of Offenders Act 2012 means in future people in a similar position to the Dowlers, Simon Singh and Peter Wilmshurst who will fight defamation cases will probably be in a worse position on costs than they would have been had the Government not got their hands on this legislation. Despite the promises that were made during the passage of the LASPO Act, costs is a major issue, and it should have been dealt with properly before this Bill returned to the Chamber.

The Minister commented on extending the Derbyshire principle to private companies. It is estimated that, following this Government’s privatisation agenda, in the NHS alone private companies will take over £16 billion- worth of Government contracts to provide services previously carried out by the public sector. Those services will go to private companies that use the law to chill debate in a way that the NHS cannot. Atos frequently suppresses disquiet, and Baroness Hayter cited Serco in the other place yesterday.

I hope the judiciary is listening to this debate and has listened to some of the other debates, because as Ministers both in this House and the other place have repeatedly said, the courts should further develop the Derbyshire principle in line with the will of Parliament. That is an unsatisfactory position, however, and this is on the to-do list of things that would have improved the Bill dramatically, but I hope the courts will now extend Derbyshire to contracts between the private sector and the Government or local authorities, because that is in line with the will of this House. [Interruption.] The Minister has commented on that, as I have said.

It is thanks to Opposition Members that the Bill has been improved. No matter what is claimed on the Liberal Democrat Voice website, not once have the Lib Dems backed us against the Government. Indeed, yesterday in the other place in the vote on the Derbyshire aspect of what was amendment 2—[Interruption.] The Minister keeps chuntering about Derbyshire, but the issue here is clearly that the will of this House has been expressed on many occasions, but thanks to the Liberal Democrats supporting the Government, we are not able to take that forward. It is important to put that on the record. No matter what they say, it is all talk and no action from the Liberal Democrats.

This is now a better Bill, but it is not the best it could be, and we will need to return to it after Labour is re-elected to government in 2015—or sooner, I hope. It is the best we can expect at present, however, and that is a shame. I am disappointed—and also surprised, although perhaps I should not be—that the hon. and learned Member for Harborough (Sir Edward Garnier) has introduced his proposal. We will hear his observations on this matter in a few moments. We will decide whether what is before us is the best we can get today after we have heard the Minister’s final comments.

I must disappoint the hon. Member for Stoke-on-Trent South (Robert Flello) because I do not think my motion has been selected. None the less, I am not prevented from—and nor shall I be inhibited from—saying a few things about where we are now.

There are plenty of aspects of the Defamation Bill—which has been chuntering away in the background in this House and the other place for a few years now—that are commendable, and other aspects that are utterly harmless; they will not do any good, but neither will they do any harm. I am disappointed as well, however—although I suppose that might partly be to do with my having been first elected to this House 21 years ago and having been here too long—that the coalition Government have allowed themselves to create the law of England through a series of backdoor deals, rather than through any rational and coherent thought.

I think the hon. Gentleman largely agrees with me about where we are now with this Bill, as, I suspect, does my hon. Friend the Minister, but she is in a difficult place and I sympathise with her about that. It is a pity that the Secretary of State for Justice is not here to defend where we are now and to speak up for the Bill for which he has responsibility on behalf of the Government.

Last week my hon. Friend and I were in agreement; this week we are not. Last week the Government whipped coalition Members to support what I and my hon. Friend were advocating—that it is not in the public interest to have a financial damage hurdle for companies to overcome that want to bring proceedings in libel. This week, the Government have changed their mind—or have had their mind changed for them. I am all for people changing their mind if the circumstances or evidence supports that. What I find intolerable—and what I think amounts to a form of incoherence and political feebleness, and which is little short of intellectual dishonesty—is for a Government to march their troops up the hill one week and then to rush down the hill the next week saying, “We didn’t really mean it last week,” or “We had not really thought about it,” or “We are doing this for no other reason than that we are under political pressure from A, B or C, and we have decided to ask our Government troops to do something else.”

I do not think that is a proper way to create the law of England. If we want to adjust the law of defamation we can, of course, do so; Parliament is sovereign and it can do that as and when it sees fit. On the whole, however, Parliament and this Government will be better respected if they do so on the basis of having thought about the matter and having relied on the evidence that supports their case, as opposed to running harum-scarum all over the place and looking confused. I think we are in a confused position. Sadly, nothing that I heard from my hon. Friend this afternoon, or from the Minister in the other place, Lord McNally, when he spoke to the Government position, has filled me with any confidence that this is anything other than a backstairs deal. If the Government admit this is a backstairs deal, so we can clear that up, that will be good, but I have a suspicion it is being dressed up as a matter of principle when there is no principle other than the shenanigans of coalition politics.

As is clear from my unselected motion, I have an interest to declare. I declared it last week, and I shall probably go to my grave with R in square brackets printed on my forehead, but if a Member of Parliament happens to know a bit about something, such as an area of law, it is a pity if he or she feels he or she cannot say something about that subject when a Bill touching upon it comes to be considered.

Clause 1 currently states:

“A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant”.

It is now being proposed that these words be added to it:

“For the purposes of this section, harm to the reputation of a body that trades for profit is not ‘serious harm’ unless it has caused or is likely to cause the body serious financial loss.”

Those words are perfectly understandable; they are ordinary English words and my hon. Friend and I can well understand what they say. What I find troublesome, however, is that last week she did not approve of them being inserted into the Bill, but this week she does. As I have said, this smells of a pretty low-grade backstairs deal.

Last week, I made some arguments that the House accepted, and it therefore rejected an amendment whose terms are broadly similar to the one the Government are now pushing upon us, so I will not repeat what I said in the House last week, and nor will I repeat what my noble Friend Lord Faulks said in the other place—although I urge those in this House and elsewhere who are interested in this subject to look at what he said. He made a short and considered speech; it was a shorter speech than the one I am making. In it, he unpicked in a gently generous way my noble Friend Lord McNally’s arguments—I should, perhaps, put that word in inverted commas.

It strikes me—and I think it struck my noble Friend yesterday—that the additional requirement of special damage, which the Government’s amendment proposes, is unnecessary because of the serious harm test that will already exist in clause 1. The clause will simply have the effect of ensuring that libel claims brought by corporations generate satellite litigation and become more costly. Special damages claims are expensive to try, more complicated and far less easy to settle. Those who chose to defend libel claims brought by corporations, but who ultimately fail, will have an even bigger bill to pay.

The clause as amended—if the Government have their way—will not achieve its aims because usually the more damaging a libel, the more likely a corporation is to try to silence its critics. There are remarkably few cases of the kind that are cited as examples of bullying, which keep being repeated and repeated—Wilmshurst and GE Healthcare are two cases that are cited. I know from my experience and listening to others who know a little bit about this area of law, that the number of cases involving corporate plaintiffs is remarkably few.

Would the hon. and learned Gentleman not accept, however, that what we hear time and time again is that cases do not get to court because of the bullying by corporations at an early stage? People give in straight away or, more often—as in the Serco case, which I think Baroness Hayter raised yesterday in the other place—newspapers face the difficult decision of whether to pursue something that might end up being challenged, even if they are citing the truth.

The hon. Gentleman no doubt makes a correct factual point, but I think he exaggerates it. The number of cases involving corporate claimants is small and the damages they recover, absent special damages, is low. Damages to trading reputation alone probably attract £20,000 at the top end and usually no more than £10,000, so we are not talking about hugely extravagant damages claims.

Allegations of bullying can be made against anybody who has more money than the person they are suing. Jimmy Goldsmith, now long dead, sued about 100 distributors—I was involved in the case in a junior capacity—such as WH Smith, Menzies and so forth. He issued proceedings in his dispute with Private Eye. It was suggested by those defendants that he was doing it to shut them down—to prevent them from distributing a newspaper.

The Court of Appeal disagreed with that and said—the case is called Sperrings, if the hon. Lady is interested—that there was no basis for suggesting that Jimmy Goldsmith was misconducting himself, albeit that a reasonable person could comment that he was using his financial wealth to bully those defendants. The same could be said of Robert Maxwell, who stole Daily Mirror employees’ money in order to run libel actions against every Tom, Dick and Harry he could lay his fingers on.

What is the difference between complaints about financial wealth or strength in the hands of individuals being used to bully defendants, compared with financial wealth in the hands of corporate claimants being used to do that? If the case is an abuse—if it does not come within the terms of the currently unamended clause 1—the court will stop it. However, what has happened is that a general case has been built up, but on the basis of about two, three or four cases—I congratulate the campaigners and those who have seduced my hon. Friend and the Opposition into believing that what they are doing is in the public interest. That is illogical, although it has been highly effective politically—you can perhaps hear from the frustration in my voice, Mr Deputy Speaker, that I recognise defeat when I see it. I am about to be defeated, because the Government have simply whipped the people who voted one way last week to vote another way this week.

Although my hon. Friend was not here at the beginning of the debate, I will, if I may, permit him to intervene.

My hon. and learned Friend is absolutely right, but as soon as I saw that he was on his feet, I came as fast as I could, dropping everything else. Last week I voted the way I intend to vote this week.

And I still think I am right. Can my hon. and learned Friend give some examples of where corporations have taken defamation or libel cases that were necessary and could not have been dealt with in another way? As he says, the problem with illustrative cases is that they do not always make good law, but the cases involving Dr Peter Wilmshurst and Simon Singh were examples of how the law did not bring justice within a time scale and for an amount of money that ordinary people or publishers can afford.

Obviously I cannot give my hon. Friend a catalogue of cases one way or the other. What I can tell him is that if clause 1 is amended as he always wanted and as the Government now want, the case of Wilmshurst, in which he was sued by NMT Medical, would probably pass the “serious financial loss” hurdle. If my hon. Friend thinks that he is helping Dr Wilmshurst or those like him by amending the Bill in that way, I am afraid he is wrong. If he wants to lock future Dr Wilmshursts into satellite litigation about “serious financial loss”, then make my day, as they say. That will be the unintended consequence of what is going to happen.

As I said last week and as was said in the other place yesterday, the great and sadly late Lord Bingham said in the case of Jameel that corporations have trading reputations that ought to be worthy of protection. A corporation’s trading reputation is a thing of value. However, the Government and those who support them on this particular volte face confuse themselves because they have separated out—no doubt for well intentioned reasons—non-trading companies and trading companies for the purposes of the amendment to clause 1. However, trading companies have different types of reputation, as Mr Justice Tugendhat said in the case of Thornton last year. Individuals—and certainly companies—have different segments of their reputation that are susceptible to being defamed.

I used the example of the BBC last night on “The World Tonight”, at about quarter past 10. The BBC is a large trading corporation. It sells things for profit—programmes—but it has another reputation as a source of unbiased and disinterested news reporting. It has another reputation as a supporter of good causes such as Children in Need and another reputation as an employer. I could libel the BBC in its trading capacity and it might or might not overcome the hurdle that clause 1, as about to be amended, would present. However, I could also accuse it of being, let us say, a hotbed of or a magnet for child sex abusers. That would not necessarily cause it serious financial loss, but it would most certainly defame the BBC and undermine its reputation as a place to be employed or a place to go and visit. Despite the fact that that would cause it serious reputational loss, the BBC would be unable to vindicate its reputation, because it would be unable to show serious financial loss.

It strikes me that as I begin to repeat myself and say what I said last week—

It is all sorts of things and it will not cause my hon. Friend financial loss, but he will still be able to sue me if I repeat it outside—assuming that accusing somebody of my hon. Friend’s distinction of being elderly were defamatory. But anyhow, I digress—I am amused to be led to digress by my hon. Friend, because he is an amusing and diverting person.

I will not call a Division this afternoon, because I can do a bit of arithmetic and also because by not calling a vote I will create more embarrassment for the Government. I urge them to think carefully about what they think they are doing, why they have done it, and whether they can justify what they have done. Are they able to answer accusations of backstairs deals, and allegations of incoherence or producing a measure that will have huge and unintended consequences of deleterious effect?

The Government are making the law of England in a wholly non-party political area. This is a technical issue about the proper regulation of libel law. If they wish to go on and make a fool of themselves, fair enough. I cannot stop them. I do not have the votes behind me, albeit that exactly the same Members of Parliament were behind me last week, one of whom was my hon. Friend—not my hon. Friend the Member for Worthing West (Sir Peter Bottomley), but the Minister on the Front Bench. If the Government wish to go ahead—fair enough, I cannot stop them. However, I regret today’s state of affairs which I think is unwise, and the Government are being very silly. I congratulate those who have supported this campaign on pulling this particular rabbit out of the hat at this late stage, but in the end they will no doubt have little to congratulate themselves on, and the courts will be full of satellite litigation about the definition of “serious financial loss.”

When I asked the Minister about the difference between serious financial loss and substantial financial loss or harm, she said simply that I would be able to answer that question better myself. If that is what she said—

She is shaking her head to say she did not, but I am not sure that is an answer to the question. The Government should come to the Dispatch Box and have a coherent case to make, but they do not.

Old and ill-tempered Members of Parliament, whether they represent Worthing or Harborough, must draw their remarks to a conclusion at some stage so I shall do that now. I do so, however, with acute disappointment, and I think the Government are letting themselves down.

My hon. and learned Friend the Member for Harborough (Sir Edward Garnier) is clearly experienced in these matters, but he is not satisfied by the conclusion reached by the two Houses after a huge amount of consideration over a very long period, with attempts by everybody to achieve maximum consensus. I understand his point that Parliament works by doing a deal at the end of the day. A Government—any Government—have to get a Bill through both Houses of Parliament, and for a long time no single party has had a majority in the House of Lords. The House of Lords has often intervened to say that it does not like what the House of Commons is doing, and there have been one, two or three attempts at the end of the Session to see whether we can reach a point of conciliation. That is what has happened in this case.

My hon. and learned Friend and I might agree that we ought to have a system that always gives the final vote on Third Reading of a Bill to the elected House at the end of discussions. I hope I can persuade colleagues on the Procedure Committee to eventually come forward with such proposals, but that is for another day.

I do not suggest that what is being done today is unconstitutional; I say simply that it is incoherent and foolish.

I understood that and I will say why I think the measure is a reasonable last change that the House should support. I wish to pay tribute to several people, including Lord Lester of Herne Hill who introduced a private Member’s Bill to Parliament some years ago and in many ways triggered this reform of our defamation legislation. I also pay tribute to my noble Friend Lord McNally, who has steered a controversial Bill through many stages. He referred in his speech yesterday to the fact that it has been through the pre-legislative stage and the legislative stage. It has been considered by the Liberal Democrat party; there were conference debates and resolutions were passed on it, and there have also been many cross-party conversations.

I was a little troubled that the hon. Member for Stoke-on-Trent South (Robert Flello) was slightly churlish about the point we have reached. His party and mine, as well as the Conservatives and Cross Benchers, have worked together on the threshold for dealing with corporate claims, and we have made progress on that. Therefore, today is progress along the lines that he wanted, and that he knows colleagues from all three parties wanted. He pretends to be naïve—which he is not—about the way these things work, whether or not there is a coalition Government. At the end of a political process in Parliament, negotiations take place in the public light and also behind the scenes. As he knows perfectly well, that has happened with all three parties to try to get to the most agreeable and consensual place. My party has been as much a part of that process as the Labour party and the Conservatives in arriving at this point.

The Minister rightly says that this is not about what is known as the Derbyshire principle. For those outside the House who have no clue what that is, in essence—I do not pretend to be legalistic about this—it is a principle enunciated by the courts in a case to do with a local authority, which effectively stated that local authorities cannot generally sue to protect their reputation because they are public authorities. However, as I think everybody has agreed in both Houses, common law will evolve, which does not stop it being dealt with by further judgments of the courts across the United Kingdom. In light of the Localism Act 2011, there may be further definitions of a public authority that seek to deal with the issue of a private body that does public authority work. That business remains unaltered by the Lords amendment.

The Lords amendment, which has returned to this House in a form I hope will be accepted, would provide one additional hurdle for people who are seeking as companies to use this country’s defamation legislation. It states:

“For the purposes of this section, harm to the reputation of a body that trades for profit—”

therefore not a body that makes no profit—

“is not “serious harm” unless it has caused or is likely to cause the body serious financial loss.”

I heard the previous speech and we can debate whether that is the perfect wording. It is, however, a clear statement that there must be “serious financial loss” before someone gets to a position from which they can win a defamation case. The Government rejected the idea of a pre-hearing. I understand that and think they were right because it would have meant going round the courts twice.

The Government have accepted that the bar for companies should be higher than that for individuals, which I am sure is right. That measure is meant to deal with the sort of cases that my hon. Friend the Member for Worthing West (Sir Peter Bottomley) alluded to where in the past individuals were clobbered by companies with huge resources and assets in a way regarded as totally unfair. As Lord McNally pointed out yesterday in the House of Lords, not only have we now, I hope, protected the little person in financial terms against the big corporate giant, we have also done things to protect academic reputations and academic dispute, and to allow that to go on without the threat of defamation. We have also, I hope, made the law clearer and brought it up to date.

The hon. Member for Stoke-on-Trent South said that if the Labour party returns to government, it may wish to return to these matters, and I suppose any Government may want to do that. In this country, however, we understandably do not reform defamation law—generally a cross-party exercise—very frequently. This is a major piece of legislation and I hope that we have dealt with the last tricky issue in a way that provides greater protection for the individual against the big corporate. I think that is a job well done in both Houses of this Parliament.

I apologise for not being present at the start of the debate, and I am grateful to my hon. and learned Friend the Member for Harborough (Sir Edward Garnier) for introducing my interest. I should declare that I have been successful in three major defamation actions, and I hope I shall not have to take another.

I want to tell the story of Richard Doll, who drank too much college beer when applying to study mathematics at Trinity college, Cambridge. He did not get chosen, so he went to St Thomas’ instead. He had an interest in asthma and lung diseases. In 1950, he did a quick study on whether motor fumes or tarmac caused lung cancer, as was suspected at the time. He and his colleague, Bradford Hill, discovered that the common factor was smoking. They did not show until 1955 beyond any doubt what had first been suspected by German scientists in the 1930s, namely that, if a person smokes 25 cigarettes a day, their chances of developing lung cancer or associated serious illnesses increased by 25 or 50 times—I forget the actual figure.

If the too-frequent current habit of commercial companies suing for damage had been prevalent when Richard Doll published his material, I suspect that the tobacco companies would have shut him down. When he later came out with the proposed link, which was proved, between asbestos and serious lung conditions, the same thing might have happened. One vital question is how we protect scientific speculation and the publishing of preliminary findings without the risk of action.

I believe we should accept the Lords amendments in lieu because they give conditions in which court authority is necessary if the action is to start. There is one condition by which the court “must” rule action out. I hope the courts realise that they “may” disqualify such action on other grounds. There is a “must”, but the measure leaves open the “may” option for disqualifying cases.

Beyond clause 1—the serious harm test—we have clause 6, on peer-reviewed statements in scientific or academic journals. Clause 6 comes to the aid of scientists or medical experts such as Professor Doll if they make statements of that nature that are published in a peer-reviewed magazine or whatever, but there are plenty of other ways in which they could be assisted, such as through the common law, other measures in the Bill and earlier Defamation Acts.

Indeed—that is why my hon. and learned Friend’s career will not be interrupted by the passage of the Bill. Plenty of people will seek his advice. The condition in the proposed new clause in lieu states:

“(2) The permission of the court must be obtained in order to bring an action…(3) The court must strike out an application under subsection (2) unless”

it can show X, Y and Z. My point is that the courts also have a “may” power, which I hope they use.

The Trafigura event, which involved super-injunctions, was another example of people trying to shut down public knowledge, inquiry, discussion and debate.

I am aware of that—my hon. and learned Friend is guiding me into making my speech longer than I had intended.

When I was appointed to the Joint Committee on the draft Defamation Bill, I had hoped that the Government and their Law Officers would introduce positive proposals that went further than the Bill and that gave more power to people to speculate in public, defend their arguments and themselves. Defamation provides limits in that context.

When I had to take defamation action, I did so as a private individual. What was said about me made such action necessary—I was labelled, in effect, as a paedophile on the front page of a major Sunday paper. It struck me that it was not true, not privileged and damaging, and therefore that it provided justification for action. Auberon Waugh made a living for four years out of calling me all sorts of things under the sun. One journalist said, “Why don’t you sue him?” I said, “First, I don’t mind; secondly, it might be true; and, thirdly, it is not compulsory to sue.” It would be fair if those who take defamation action justified why they were taking it, so that they do not just pile up costs, which can become too great.

I should return to my earlier point. What comes before peer review? Suppose I am a scientist or someone else who suspects that there is a link between a commercial product and a bad consequence. I should not have to keep absolutely silent about it until I have managed to do a research study, which would involve getting the funding for the research study, finishing it, delivering it to the magazine so it can send it to other publications, and getting permission to make it public. Speculation requires people having the ability to speak more openly, but perhaps not always with certainty—they may have to put their views in terms of speculation rather than of direct accusations.

We have had the recent case—it is now finished—of the fraud related to the device that was supposed to detect improvised explosives. If someone had spoken up against that company long before there was evidence for the court case, would they have faced a defamation action? We should remember that many magazines and newspapers do not have a great deal of money.

If we accept the Lords amendment and pass the Bill, we will have done good, but not enough. I therefore make a plea to the Minister—she does not need to answer this point today—to work out how the relevant Departments can, either by themselves or by proxy, monitor defamation actions. They should have studies that report on the kinds of actions that are being taken, the writs that are being issued, the writs that are served having been issued, and the results—whether there is a settlement or whatever.

My last question—having not given notice to the Minister, I do not necessarily expect an answer now—is this. If tomorrow, for the first time, Paul Dacre printed on the front page of the Daily Mail the names of those who are thought to have murdered Stephen Lawrence, would either the new press code or the Bill allow those accused to take action? Could they say that such a publication was improper? It was certainly unusual and rare when it happened, but I reckon it was in the public interest. That is the kind of permission or liberty that our media ought to be able to take, and I am glad Paul Dacre did so on that occasion.

Question put and agreed to.