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Grand Committee

Monday, 17 December 2012.

Defamation Bill

Defamation Bill 9th Report from the Constitution Committee


3.30 pm

The Deputy Chairman of Committees (Lord Colwyn): My Lords, it is very unlikely, but should there be a Division in the Chamber we will adjourn for 10 minutes.

Clause 1 : Serious harm

Amendment 1

Moved by Lord Browne of Ladyton

1: Clause 1, page 1, line 3, after “publication” insert “, and the extent of its publication,”

Lord Browne of Ladyton: My Lords, I beg to move Amendment 1, which is in my name and that of my noble friend Lady Hayter. If it is convenient to the Committee, I shall speak also to Amendment 2, which is also in our names, and Amendment 3, which is in the name of the noble Lord, Lord Mawhinney. First, it may be appropriate to set out the Opposition’s position in relation to this Bill. At Second Reading, I made it clear that we welcome this Bill but that we are a critical friend of the draft before your Lordships. It is appropriate to recognise the work, in particular, of the Joint Committee on the draft Bill, and everyone in working groups and campaign groups who have got us to this point.

We on these Benches support the modernisation of our defamation laws. As was said at Second Reading, there have been concerns that defamation laws are outdated, have fallen behind technological developments of restricted freedom of expression and have attracted libel tourism. The current system is also skewed by the high cost of defamation proceedings. All these issues will exercise our minds as we examine the provisions of the draft Bill.

The objective of the exercise is to amend and revise the law to leave us with laws that are clearer and more proportionate. It is important that in any review and reform of defamation laws we get the right balance between freedom of speech and expression on the one hand and protecting reputations on the other. I am sure that noble Lords will express that objective in many different ways as we proceed. Essentially, that is what we are seeking.

I pay tribute to the Minister for the way in which he has engaged with my noble friends and me, and, I am sure, with other noble Lords. At Second Reading, he indicated that the Government were listening and that they would engage in debate and discussion about a number of aspects of this Bill. I suppose that it is slightly premature to say that the Bill has already been improved but I think that one can anticipate that some of the proposed government amendments will be accepted by your Lordships’ House. In that sense, I think that I

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am on safe ground to suggest that the Bill will be improved. It has been improved already through its passage in the House of Commons. Since Second Reading, because of engagement with the Government, we have high hopes that there will be a continuation of improvement.

There still are other issues that we wish to address and with which we wish to engage in debate. We hope that the attitude shown so far by the Ministers and their supporting officials will continue, that the Government will continue to listen to the argument, and that we will be able to further improve the Bill.

Amendment 1 seeks to expand Clause 1 by adding the words,

“and the extent of its publication”,

to the test of seriousness. This amendment will be recognised by some as being very similar to an amendment proposed in Committee in the House of Commons. However, the drafting of that amendment properly was interpreted by the Minister, Mr Djanogly, as being restrictive rather than expansive of seriousness. Thus, the Minister avoided engaging with the issue which it was intended to bring forward.

The purpose of the first two amendments is to elicit from the Minister a clarification of the meaning of “serious harm” for these reasons. I commend paragraph 27 of the report of the Joint Committee on Human Rights when scrutinising the draft Bill. It sets out clearly the existing threshold by referring to the threshold of seriousness that requires to be reached to establish that a statement is defamatory and that the courts have the power to throw out a claim where this is not met or where no “real and substantial” tort can be demonstrated. There is wide agreement that that threshold is too low and that the balance in the existing law is not being struck properly. Under the Bill, a statement is not defamatory unless its publication has caused, or is likely to cause, serious harm to the reputation of the claimant. We have been told through comments made by Ministers in the course of the debate thus far that the intention is to raise the bar from what is currently the law.

Overall, Labour supports the objective of raising the bar and reducing the number of trivial cases, but believes that the clause is not sufficiently clear. We have tabled the amendments now before us and those tabled in the Commons in order to clarify the meaning of “serious harm”. They sit neatly with the amendment tabled by the noble Lord, Lord Mawhinney, which would require the Secretary of State to issue guidance on which claims should be struck out by the court for not meeting the test of serious harm. I should record that when this issue was debated in Committee in the House of Commons, the Minister addressed it in an attractive and simple way by saying that the test would be set by Parliament and we should not seek to restrict how judges interpret it. I have some instinctive sympathy with that view. We make the law and the judges interpret it; it is not for Parliament or the Government to lay down exactly what the test means. However, we are trying to achieve a better balance between freedom of speech and expression on the one hand and protecting someone’s reputation on the other, and we are seeking to do that principally through this test. There is an

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onus on Parliament to understand what it is doing and to be convinced that the devices it uses meet the objective. Therefore, without an explanation of what the effect of this test will be, what the Government intend by it and how in practice they think it will meet the objective, it will be well nigh impossible for Parliament to be convinced that the objective of striking the proper balance has been met. These amendments seek to provide the Government with an opportunity to explain how the objective is met by the test.

The amendments have also been tabled against the background of the history of this process. The draft Bill had a different test. The Joint Committee recommended yet another test. The tests are similar to each other, and the Government chose a third one. There is an argument that the process has confused rather than clarified the position. I refer to the first sitting of the Committee on 19 June 2012, where Karl Turner, the MP for Kingston-upon-Hull, rose to support an amendment similar to those before your Lordships today. He started off by setting out his agreement with the underlying principle behind the existing clause. He said he was,

“searching for clarity in the face of some possible confusion”,

and he set out broadly the argument that I have sought to set out. He said:

“Clause 1 aims to introduce a hurdle for pursuing claims through imposing a serious harm test, meaning that a published statement can be defamatory only if it has caused or is likely to cause serious harm”.

He said that he thought that that was sensible, and set it against the current situation. He went on to accept—and I accept—that the,

“decision to apply such a hurdle will allow judges to strike out trivial claims … early on, and reduce the expense and time taken by needless and vexatious litigants”.

He then explained why he supported the amendment and encouraged the Minister to engage with it. He said that,

“a clearer statement of what is meant by ‘serious harm’, specifically how it differs from harm”,

would be helpful. He added:

“There must be a clear indication of the intended meaning of serious harm, otherwise the clause is likely to fail in its principal aim, which is, as I have said already, to prevent vexatious claims. The explanatory notes outline that the clause raises the bar for bringing a claim, but the lack of understanding regarding the true meaning of ‘serious harm’ means that we do not know how high the bar is being raised. This is a concern not only for the lawyers and judges”—

we have enough lawyers in this Room to engage in this debate and keep us going for a long time—

“who will be required to interpret the law once it is passed, but also for the House, which has to scrutinise the legislation now”.

He continues by making the point that makes my point in the clearest way. He said:

“Unless we are clear about how high the bar has been set, we shall be unable to understand fully whether the Bill strikes the correct balance between freedom of expression and the protection of reputation, which I think we all agree is what the measure seeks to achieve. It would thus be helpful if the Minister could place on record some examples of what he considers ‘serious harm’”.—[Official Report, Commons, Defamation Bill Committee, 19/6/12; cols. 9-10.]

I could continue because my honourable friend supported his argument well thereafter.

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The disappointment thereafter was, with respect to the Minister, Jonathan Djangoly, that he did not engage with this issue at all and suggested that just the history of the process—the consultation and the decision made by the Government to rest upon “serious harm”—was quite sufficient and that it was thereafter a question for the judiciary. I do not agree with that. We should continue to give the Government the opportunity to explain and answer these questions. I have repeated a slightly revised version of the original amendment for that purpose, and we have drawn on the work of the Joint Committee by proposing to add the words, “and substantial” to this clause, which was the committee’s recommendation, and give the Government the opportunity to give the explanation that they have thus far avoided giving.

Finally, before I sit down, I say that this test is crucial to what the Government are seeking to do and what we, and most of those who will contribute to this debate, are seeking to support. We will continue to return to this test because it is at the heart of the argument. If we can get clarity about this at the beginning, many of the other proposed amendments to the legislation can be seen off by reference to the effectiveness of a proper test. If there is no clarity, amendment after amendment will be tabled—and many have already been put down—seeking to draw further explanation in order that noble Lords can be satisfied that the objective will be met.

I support the amendments in the name of the noble Lord, Lord Mawhinney, who served with great distinction in his chairmanship of the Joint Committee and has done us great service on this Bill, in order to give the Government and the Minister the opportunity to set us off on our discussions with some certainty and clarity, and provide an explanation that will serve us well during the rest of our debates.

3.45 pm

Lord Mawhinney: My Lords, I am not sure what the proprieties are but for the record I had the privilege of chairing the Joint Committee, the report of which is a seminal document in the consideration of this Bill. Before I turn to the amendments in my name and the amendment in the name of the noble Lord, Lord Browne of Ladyton, and the noble Baroness, Lady Hayter of Kentish Town, I should say that the committee was enormously assisted by two noble Lords present this afternoon: namely, the noble Baroness, Lady Hayter of Kentish Town, and the noble Lord, Lord Bew. All the outcomes of the committee’s deliberations were supported by both my noble friends. I shall use that word in its normal rather than parliamentary setting. The report was greatly enhanced by their contributions, for which I thank them.

The report also acknowledges the considerable help that the noble Lord, Lord Lester of Herne Hill, contributed to our conversations and deliberations. He knows that we are appreciative of that. I add to that the name of the Minister—the noble Lord, Lord McNally. His door was always open to me and we had a number of very good and constructive conversations. I thank him and express with great confidence the hope that the spirit which imbued our earlier conversations will continue to prevail in this Committee.

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Amendments 2 and 3 stand in my name, so I shall start with those. The first seeks to change the test to “serious and substantial”. As I told your Lordships’ House at Second Reading, this emanated from the evidence given to us by the noble and learned Lord, Lord Mackay of Clashfern, who is probably one of the most highly regarded Members of your Lordships’ House. He was quite explicit. He apologised to me privately for not being able to be here today. I told him that I had put down an amendment to try to persuade the Committee, and subsequently the House, that the test should be “serious and substantial”. He said, “It is quite straightforward, Brian. ‘Serious’ means that what is said can be very damaging but may not be substantial if the ripple effect—the extent of publication—is very limited. On the other hand, it might be only borderline serious but the extent of publication may be so great that substantial harm is done, so there are arguments for the ‘serious and substantial’ test”. The committee was impressed by the evidence given by the noble and learned Lord, Lord Mackay, and we translated what he said to us into our report.

The noble Lord, Lord Browne of Ladyton, makes a good point when he says that we are in danger of leaving everybody slightly confused by the terms “substantial”, “serious and substantial” and “substantial to serious”. That raises another question as to whether or not the Government are seeking in this Bill to codify or to write new statute. Paragraph 27, to which the noble Lord, Lord Browne of Ladyton, referred, addresses this point.

The Secretary of State for Justice, the right honourable Kenneth Clarke, said in his evidence to us that Government were looking for new statute. He was accompanied at that evidence session by our Minister, and after I queried exactly what the Government’s position was supposed to entail, he wrote and said that we were essentially only seeking to codify the law. I must therefore say to my noble friend that we really do need to know whether the Government want to codify or to write new statute. We in the committee were fairly clear that new statute needs to be written, because as the noble Lord, Lord Browne of Ladyton, said, our view—and the view of almost everybody who gave evidence to us— was that the present bar is too low.

That leads me to another point. The noble Lord, Lord Browne of Ladyton, quoted—I think—my honourable friend Mr Djanogly in saying that this legislation needed to be clear, because Parliament set the law and the judges interpreted it as if it was a new and bold step forward into the unknown. That is how our constitution works. We have to decide what we want to tell the judges to use as the basis of their judgments. It is not complicated; it is quite straightforward. This Committee therefore needs to focus on whether “serious and substantial” would be so confusing to our judges that they could not handle it. Frankly, I do not believe that for an instant, but that is an argument that has been floated. We need to be crystal clear what the will of Parliament is. The will of Parliament as reflected by the Joint Committee was that the bar should be raised, and the will of Parliament as reflected by our committee was that this required new statute rather than a codification of existing common law.

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That leads me to Amendment 3, which is in my name. The committee formed the view that while ultimately it is for judges to decide whether defamation has occurred or whether the charge is serious enough that it should be pursued in court, the evidence we received and the judgment we formed was that that process is delayed too long. Guidance needs to be issued to the judiciary in whatever form is appropriate. I am not a judge, so I am not going to leap into waters which may very quickly get above my head, but we were quite clear that there needed to be guidance in order for the judiciary to come to an early judgment as to whether this test had been met; and if so whether the case should proceed; and if not that it should be terminated immediately.

Lord Phillips of Sudbury: I thank the noble Lord for giving way. Will he explain to us—because it is not clear to me—whether this process of the Secretary of State issuing guidance goes through any secondary legislative procedure? It does not on the face of it appear to do so.

Lord Mawhinney: I think the truthful answer to my noble friend is that I cannot tell him that. However, my understanding from listening to hours of evidence is that pathways by which the Government can issue guidance already exist, and I assume that that would be covered by that arrangement. If this is not the case, I would encourage my noble friend, who knows more about these things than I do, to put down appropriate amendments on Report to clarify the issue that he has raised.

Therefore, it is question of new statute, not codification; of raising the bar; and of the judiciary making early judgments as to whether these cases before them should proceed. I stress that because—and I am not going to apologise to noble Lords—I fear I am going to return regularly through these sessions to one of the overwhelming judgments that we made. That was that the cost of defamation has risen to such an extent that it is driving way beyond the means of ordinary people their ability to seek the protection under the law to which they are entitled.

The committee occasionally, in trying to balance legal action against cost, came down on the side of cost. Legal niceties are good, important and proper but they are irrelevant if the ordinary man on the street cannot afford to go to law in the first place. Therefore cost is going to be a recurring theme. I encourage the Minister to take that point seriously so that he does not get irritated with me. He is presiding over a system that is out of the financial reach of most of our fellow citizens. This legislation ought, to some extent, to reverse that procedure—not wholly, we are all sensible and grown up and there is cost attached to these legal procedures. However, as many people as possible ought to be enabled to use the law to defend themselves and that is simply not the case at the moment.

What I have said indicates that I have sympathy with the first amendment tabled by the noble Lord, Lord Browne of Ladyton. “Publication” and “the extent of publication”, “serious” and “and substantial”,

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fall in the same ball park and I look forward to hearing the Minister’s reply. I have pleasure on behalf of my committee as well as personally in speaking to both of the amendments in my name.

Lord Scott of Foscote: My Lords, Amendments 1 and 2 seem thoroughly sensible and I support them without hesitation. However, I am troubled by Amendment 3. If it is established that the alleged defamatory publication has caused serious and substantial harm to the claimant, that is an issue of fact and it will have to be made good by evidence. The judge cannot possibly come to a conclusion on an issue of fact of that sort until he has heard both sides. He must hear the claimant’s evidence that asserts that he has or is likely to suffer serious and substantial harm. If that is disputed, as it may be—if it is accepted, of course that is that—then he must hear evidence from the other side.

I do not see how one can have the statute telling the court how to deal with disputed issues of fact. Ordinary procedure of the court should deal with that. The parties can be required to give particulars of the case they rely on before the proceedings begin so that the matter is ventilated as fully as it may be. They can be ordered to exchange copies of their witness evidence so that that can be compared. However, at the end of the day, the judge must decide which of two sets of disputing evidence he is to prefer.

Lord Mawhinney: I am grateful to the noble and learned Lord. I quite understand the argument. If the guidance issued were to say, for example, that evidence had to be produced within a given—probably short—timeframe, which would have cost benefits, would that fall foul of the arrangement?

Lord Scott of Foscote: I do not think that would fall foul of it at all. If the parties are given sufficient time to collect and produce their evidence and provide copies of it to the other side, that is fine. However, once that has happened, the judge must come to a conclusion of fact. Once he has come to that conclusion, although it is unlikely to be appealed if it is on an issue of fact and he has heard the evidence, it is theoretically appealable and is not necessarily the end of the case.

4 pm

Lord Faulks: I declare an interest as a practising barrister. I practise principally in the law of tort, which includes, but does not specialise in, defamation. I am sorry that I was not here at Second Reading, but I have had the opportunity of reading the Second Reading speeches.

The aim of this group of amendments is clearly to provide a further hurdle to prevent vexatious and frivolous actions. I am sure all noble Lords agree that that is a desirable aim, but a claimant already has to cross a considerable hurdle in establishing that something is potentially defamatory. With great respect to the noble and learned Lord, Lord Scott, many of the decisions about meaning and whether something is potentially serious—if this amendment is accepted—will be taken without a formal rehearsal of evidence, simply on the pleadings, the submissions, by both sides.

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I respectfully say that it seems to me that the word “serious” embraces “substantial”. It is a simple word which, after all, we ask juries to consider in cases of serious bodily harm. I entirely agree with the noble and learned Lord, Lord Scott, about the lack of need for guidance. It is something that judges would be perfectly capable of deciding without any such guidance. The question is whether the plaintive has a substantial hurdle to overcome. The word “serious” seems to me to provide a substantial hurdle.

I entirely agree with what my noble friend Lord Mawhinney says about funding, which is critical to this. Much of the problem in this area has been caused by CFAs and the immense bill of costs that tends to mount up for claimants who then sue defendants of perhaps fairly modest means who have been unable to fight cases because of the threat of those costs. After the LASPO Act comes into force in April, this will be much less of an issue, but it is important. I know that my noble friend the Minister will be answering on this. It is important that there should be some means of pursuing these cases when they have crossed the various hurdles which will, no doubt, be in the Bill when it is enacted, and I ask the Minister to do what he promised at an earlier stage in the legislative process. It is all very well to have a proper inhibition, but there should nevertheless be a meaningful remedy.

Lord May of Oxford: I shall offer some thoughts as a practising scientist who on one occasion only was confronted with a legal letter of, essentially, a threatening kind because I had accurately described something as a bunch of garbage. I promptly folded. I did not have the courage of Simon Singh or the principle that lead the journal Nature to spend £1.5 million on a ludicrous suit. We have a very tricky thing to try to solve. We are internationally known. The Americans have passed legislation to cut themselves loose from us. The United Nations has formally criticised what we have been doing. We are known as the place where you come if somebody living in Iceland has irritated you in Australia because of the extravagant and extraordinary costs, which have no analogue anywhere in the world, of dealing with these issues.

My father was a lawyer, and I have every sympathy and understanding that we are wrestling with a very difficult problem. One or two words will not capture it, but the spirit is sensible enough. Part of the problem is the legal costs, and they are something that we are clearly not going to legislate about. As we look at this, we should not look at this through a purely legalistic prism. We should try to see a way forward to have sensible legislation that means that if you criticise on valid scientific grounds the chimerical claims of someone—I shall not name an example—you will not be confronted with the dilemma of principle that people are being confronted with now. This is what has brought this. I see the problem, but the issues raised by the legalistic arguments that are not sensitive to the underlying facts are substantial and difficult to solve but need to be confronted. Do not just explain to us what we all understand. Of course there has to be some careful examination of it by competent people, but that is not necessarily served by the way we use expert witnesses in these legalistic things.

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Lord Lester of Herne Hill: I was not going to speak until I heard the noble Lord, Lord May, just now. He is identifying one of the main problems that the Bill is designed to tackle—it arises in the other parts of the Bill—on the way one approaches the defence of truth, honest opinion and privilege. The Bill seeks to take care of all of those. The cost matters are being dealt with separately and are very important.

All we are concerned with here is the initial hurdle to get rid of the trivial cases. We must not set the hurdle too high, because that would be unfair to claimants; nor too low, because that would be unfair to publishers. My own view is that one word in the English language is better than three. For that reason, I hope that the Government will stick to “serious” rather than giving the judges the headache of deciding how “serious” differs from “substantial”. They are perfectly capable, it seems to me, of interpreting an ordinary word in the English language. In that respect, I agree with my noble friend Lord Faulks.

The Minister of State, Ministry of Justice (Lord McNally): My Lords, I shall begin with my usual disclaimer. I am not a lawyer. As I often say about my friends in this House who are lawyers, we are in their debt because if we had to pay them we could not afford them. We get the benefit of considerable legal expertise. The only problem is that it does not always point in the same direction. Nevertheless, it is welcome—as is the approach of the various groups that have become involved in this Bill. I pay tribute to my colleague and noble friend Lord Lester, who launched us on this path with his Private Member’s Bill, and the noble Lord, Lord Mawhinney, and his group, who in the pre-legislative scrutiny committee were extremely thorough. I also pay tribute to the Opposition, who played a very constructive role, and the various lobby groups that have come in. As has been said, it is a task of achieving balance.

I am grateful for the comments made about my own attitude. I take the view, particularly on this Bill, of President Harry Truman, who when asked whether the Marshall plan should be called the Marshall plan or the Truman plan said that it should be called the Marshall plan, as it is amazing how far you will get if you share a little of the credit.

I want to share the credit because my sole aim and intention in taking this Bill through is to leave us with a piece of useful legislation which will address some of the problems to which the noble Lord, Lord May of Oxford, has just referred of us having an unwelcome reputation for libel tourism, and to address some of the unfairness of costs.

As my noble friend Lord Lester indicated, we will be returning to this matter but I draw the Committee’s attention to my letter of 10 October, which is in the Library of the House and informs noble Lords that we were referring the matter of costs to the Civil Justice Council, an independent advisory body chaired by the Master of the Rolls, to advise us on this matter by the end of March 2013. As Members of the Committee may have noticed, the Government have subsequently announced that they have accepted Lord Justice Leveson’s recommendation that cost protection should be extended to defamation and privacy cases. Therefore, one of the

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matters which has been commented on most often, costs, is being addressed as this Bill moves forward. Whether we get the balance right is a matter for—

Lord Phillips of Sudbury: I am sorry to interrupt but I am trying to be helpful to my noble friend. I think that he just referred to a letter of 10 October.

Lord McNally: It was 10 December.

Lord Phillips of Sudbury: I am most grateful, because I have a letter from 8 October.

Lord McNally: It was my fault. I thank my noble friend for drawing my attention to that. I hope that that sets a pattern whereby his interventions will be entirely helpful—as they always are. Before I dig deeper, I should turn to the amendments before us. In the light of requests from a number of noble Lords for information on what the serious harm test is intended to encapsulate, it may be helpful for me to explain as fully as possible the Government’s thinking behind Clause 1.

The introduction of a serious harm test reflects the Government’s view that there is merit in legislating to ensure that trivial and unfounded actions do not proceed. It is the first time that there has been a statutory threshold of this nature in defamation proceedings. In the draft Bill, we consulted on the following provision. It said:

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

In formulating this provision, we examined a series of cases over the past century in which the courts have considered the question of what is sufficient to establish that a statement is defamatory. A recent example is Thornton v Telegraph Media Group Ltd, in which an earlier House of Lords decision on Sim v Stretch was identified as authority for the existence of a “threshold of seriousness”. In Jameel v Dow Jones and Co, it was established that there needed to be a “real and substantial tort” in the jurisdiction for a claim to be able to proceed. The claim which failed that test was struck out as an abuse of process. The “substantial harm” clause aims to encapsulate the tests applied in these and other cases. Our view at that point, which we expressed to the Joint Committee on the draft Bill, was that this would reflect and strengthen the current law. Establishing in statute a substantial harm test for the first time would give this requirement a new prominence and would help to discourage trivial and unfounded claims being brought.

In its report, the Joint Committee on the draft Bill took the view that a stricter test was appropriate and that,

“a threshold test that focuses on the seriousness of the allegation would raise the bar in a meaningful way and give greater confidence to publishers that statements which do not cause significant harm, including jokes, parody, and irreverent criticism, do not put them at risk of losing a libel claim”.

It recommended a test of serious and substantial harm.

4.15 pm

The Government’s response to the committee’s report expressed our concern at using two separate terms alongside each other. I will return to that point shortly.

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However, it indicated that, in the light of the committee’s views and the balance of opinion on consultation, the Government were persuaded that it was appropriate to raise the bar to bringing a claim and that a test of serious harm would do this while maintaining a balance that is not unduly restrictive of claimants’ rights. Our view is that the serious harm test would raise the bar to a modest extent above the requirement of the current law. A wide range of circumstances may be relevant in determining whether the serious harm test is met in individual cases. We do not consider that it would be practicable to try to predict particular circumstances or types of case which would or would not fail to meet the test, nor is it appropriate for Ministers to try to second guess how the courts would behave.

However, an example of the type of case which might well be decided differently is Mardas v New York Times Company & Anor. In that case, the High Court allowed the claimant’s appeal against the Master’s decision striking out the claim and noted that it would be only in rare cases that it would be appropriate to strike out an action as an abuse on the basis described in Jameel: that is, that there has not been a real and substantial tort in this jurisdiction. The Master’s decision in Mardas had been reached on the basis that there had been a very limited publication. This was estimated at approximately 177 hard copies of the New York Times article and approximately 31 hits on the online version of the article and a similar article in the International Herald Tribune. The claim related to matters that had happened some 40 years ago. The High Court considered that there was no basis for concluding that there was real and substantial tort in this jurisdiction and commented:

“A few dozen is enough to found a cause of action here, although the damages would be likely to be modest”.

We believe that the court would be likely to take a different view of this case under the serious harm test. In referring to this example, it is important to make clear that although the decision in Mardas related primarily to the extent of publication in this jurisdiction, this is only one of a wide range of circumstances which might be relevant to whether the claimant has suffered serious harm. The court will need to consider all the circumstances in reaching its decision. I appeal to the fellow lawyers of the noble Lord, Lord Browne, on this issue, but as a layman I feel that he may be setting too high a hurdle for me to clear in giving various examples because in the end it will be for the courts to decide. My layman suspicion is that that is the best place to leave the matter rather than for me to try to give examples.

As well as influencing how the courts approach these cases, we consider that the introduction of a serious harm test would have an important impact in discouraging claimants from bringing trivial claims. When claimants are considering whether to bring an action they will need to ask themselves whether the harm that they believe they have been caused is really serious. An advantage in using this term is that it is in common usage. We think that this is likely to make

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many claimants think twice about bringing proceedings. I hope that the explanation I have given of the Government’s thinking is helpful.

Turning to the amendments in this group, Amendment 1 seeks to add an additional condition in Clause 1 so that a statement is defamatory only if the extent of its publication has caused, or is likely to cause, serious harm. We do not consider this amendment is necessary or appropriate. As I have explained, when considering whether a statement has caused, or is likely to cause, serious harm, the court will have regard to all relevant circumstances of the case, which may include the extent of the publication.

We do not think it would be appropriate to give undue prominence to the extent of the publication over and above other factors that the court may also wish to consider. Amendment 2 reflects the recommendation made by the Joint Committee on the draft Bill, chaired by my noble friend Lord Mawhinney, that the test in Clause 1 should be one of serious and substantial harm. We are not persuaded that it would be an advantage to include both terms. One of our key aims in the Bill is to simplify the law. We consider that using two terms would be likely to cause uncertainty over and litigation on what differences may exist between them which would add to disputes and costs while making little or no difference in practice to the outcome of cases. We believe that it is preferable to use one clear and simple term and rely on the good sense of the courts.

Amendment 3 requires the Secretary of State to issue guidance to the courts on using their existing strike-out powers. We do not consider that there is any need for this provision. The serious harm test in Clause 1 and the new early resolution procedure will make sure that the need to ensure that trivial and unfounded claims do not proceed is foremost in the court’s mind.

The courts already have a power in Rule 3.4 of the Civil Procedure Rules which permits them to strike out all or part of a claim where there are reasonable grounds for bringing it or they consider it to be an abuse of process. The courts are very familiar with that power and we do not doubt that they will use it in defamation cases more often once the new higher threshold is in place.

Lord Mawhinney: Two things seem to be beyond dispute. One is that powers already exist for the courts to exercise their judgment over timing and that costs are escalating beyond the ability of most people to turn to the law for the defence that they are entitled to expect from the law. Given that those are both facts that I know my noble friend is relying on, how can he explain that not changing the first is likely to address the second?

Lord McNally: First, I have already pointed out that my noble friend’s concerns about costs are being addressed in parallel with the Bill. Secondly, as we go through the Bill, we need to look at it as a cohesive whole. There are other factors and proposals that deal with some of the problems he is concerned about. It may help the Committee, and the way that I want the Committee to work—we are in the Moses Room and

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so we will not divide at the end of these debates—if I say that I will listen very carefully to the contributions made by Members, look at the legal advice, whether unanimous or conflicting, and take the advice of my advisers. I see that as the best and most fruitful way of using this Committee. At this stage, I am trying to give the Committee an idea of the Government’s thinking thus far and what the background is to any particular proposal. That is not the final word on these matters, although it should not be taken as an encouragement that there is a concession in the offing. As an old hand, I hope that the noble Lord, Lord Browne, approves of the balance and that it will encourage my noble friend Lord Mawhinney, although not too much. We will see how these debates unfold.

The courts already have the power under Rule 3.4 of the Civil Procedure Rules which permits them to strike out all or part of a claim where there is no reasonable ground for bringing it or they consider it to be an abuse of process. The courts are very familiar with that power, and we have no doubt that they will use it more when this is in place.

Other lawyers have said to me that this will all be tested in the courts. Indeed it will but, to answer a point made earlier by the noble Lord, Lord Mawhinney, we are trying to lift the hurdle but are consciously trying to keep the balance right in what we are doing. I hope that noble Lords will be prepared to withdraw the amendment in accordance with the procedure for Committees in this Room. To take the point made by the noble Lord, Lord Browne, once people have had a chance to look at Hansard and at our thinking on any particular area, if they want further clarification, I would be very happy to talk to them. I hope that the noble Lord will be prepared to withdraw his amendment.

Lord Browne of Ladyton: My Lords, with all respect—a phrase that lawyers use when they have no respect—to all noble Lords and noble and learned Lords and to the Minister who boasts that he is not a lawyer rather than disclaims that he is, the most important contribution to our short debate, for which I am very grateful, was by the noble Lord, Lord May of Oxford. He reminded us that we are changing the law and that will significantly affect the way in which lawyers, be they judges, barristers or solicitors, work in advising. We have set ourselves the task of trying to make the law in this area clear to affect the way in which people behave. Most of those people are not lawyers, and nor should they have to be lawyers in order to understand the limits of behaviour that will put them at risk.

With respect to the noble Lord, Lord Lester of Herne Hill, who knows that I have an enormous degree of admiration for him, his response to the intervention by the noble Lord, Lord May of Oxford, was—I hate using this phrase—technically correct, but it missed the point. The point I am trying to make in this part of the debate is that we have an opportunity to give an explanation of what we think we are achieving here. We have a perfect example in this short debate because of the very concise and helpful interventions by a number of lawyers about just how that could be confused. I am extremely grateful for that. In a simple sentence, the noble and learned Lord, Lord Scott,

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supported my amendments and then made well made point that was not in any way undermined by the amendment tabled by the noble Lord, Lord Mawhinney, because neither he nor I—and I support his amendment for the purpose that I explained—think that judges are incapable of doing this. We know that judges are capable of looking at this test and applying it to the facts, having listened to the legal argument. We know because—although I have never practised in England, I have had to bone up on the procedure—there is a process whereby the issues in dispute become apparent by the process of pleading and the exchange of arguments and facts. I do not think that any of us have any doubt that judges will be able to do that.

Actually, if that is the point at which decisions are made in relation to the tests that we set, we will have failed because we want these decisions to be made much earlier in the activity. We do not want people to have to go to the court at all, if that can be avoided. We do not want people to have to run off to very expensive lawyers who are capable of doing what we lawyers have just done in this debate, which is taking the advice of a former Lord Chancellor, the noble and learned Lord, Lord Mackay of Clashfern, who we all admire, which is that there is a distinction between “substantial” and “serious”. However, we had a very clear, lucid and believable explanation of why “serious” includes “substantial” from the noble Lord, Lord Faulks, using his experience and practice in the law. He was supported by the noble Lord, Lord Lester of Herne Hill, who said that this simpler, one-word test is the most appropriate way to move forward because the justice system can cope with it much better.

4.30 pm

If that is right, how did we go through a process which began with “substantial”, presumably the test advised by lawyers, then move through detailed consideration by a Joint Committee to a test of “serious” and “substantial”, which was probably informed by legal advice, and finally emerge with the Government saying, “We will drop the one that we started with and take part of the one that you propose, which is the difference that you have added to the one that we propose”? No doubt, they do that on the basis of legal advice. How did we get there if this is as simple as people suggest?

Lord Phillips of Sudbury: My Lords—

Lord Lester of Herne Hill: My Lords—

Lord Browne of Ladyton: If the noble Lord will excuse me, I will give way to his noble friend the solicitor first; then I will get to the barrister.

Lord Phillips of Sudbury: I must confess to being confused by the noble Lord’s argument. He started with a passionate point about making the law more accessible and understandable to the ordinary bloke, which is what the noble Lord, Lord Mawhinney, was concerned about. But how can it serve that purpose to have two words instead of one in circumstances where we already have had very experienced lawyers disagreeing

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as to the meanings of those two words? I note that the noble Lord has not advanced any view on the difference between “substantial” and “significant”. It seems to me that his recipe would confuse the layman.

Lord Browne of Ladyton: I am grateful to the noble Lord for his intervention but I am perfectly happy to adopt the distinction that the noble and learned Lord, Lord Mackay of Clashfern, offered the Joint Committee and that the chair of the Joint Committee has reported to us. I will live with that. I am happy to accept that. But that is not my point. Although I am speaking to amendments in my name and that of my noble friend, I am using them as a device to try to get some clarity of the Government’s thinking so that our Parliament can say, “We support that thinking. Therefore, people outside can have some understanding of what at least we think we are doing with the law”.

If anyone goes away and reads this, here we have an interesting debate in which a number of differing opinions have been expressed, all supported by eminent lawyers. If that leads to clarity, I am happy to go along with it. It may not be possible to provide the clarity that people crave. But my argument is that in our debates we should at least give some clear indication to people outside—they should not need a law degree for this—about where we are setting this bar and what it means. There are a number of ways in which one can do that, including reference to examples.

I turn now to the Minister’s response. I am grateful to him for the way in which he engages in the debate on these issues. Perhaps the noble Lord, Lord Lester, will allow me to make this point, then I shall take his intervention. I am grateful to the Minister for the way in which he engages in the debate and I know that he will listen carefully to any further points that I or anyone else want to make. I will go away and look carefully at what he has said.

While the Minister was speaking, I was looking carefully at what Jonathan Djanogly said in the equivalent debate in the House of Commons. He will be pleased to know that there was a lot of similarity. But there was some difference and it is that difference for which I am grateful.

Lord Lester of Herne Hill: The noble Lord said that I was technically correct. That is fine. If I am technically correct, that is good enough for me. I hope he will accept what I am about to say in a light-hearted spirit. We have now spent slightly more than an hour and the way in which the noble Lord, Lord Browne, has dealt with the matter is exactly the way we should not deal with the matter when interpreting Clause 1. If the kind of point that he makes were to be made before judges, we would undo the very purpose of Clause 1. The purpose of Clause 1 and the word “serious”— I do not agree with the noble and learned Lord, Lord Mackay of Clashfern, that we need the word “substantial”—is to make this a short, simple, preliminary procedure in which the judge, without having to go into evidence, is able to rule on the basis of what he has before him as to whether the case should proceed. That is the intention.

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The more that the noble Lord, Lord Browne, refers to differences of interpretation by this person and that person, the more I despair. If those kind of points are made by advocates in interpreting Clause 1—whether with “serious” or “serious and substantial”, and in my view “serious” includes “substantial” and it clearly also includes the extent of publication—the more complicated it is made and the more it will defeat the purpose. We do not want to bar claimants with important claims, nor do we want trivial claims to be brought forward. That is what Clause 1 does; it strikes a balance. I beg him not to add to the complexity. As a great advocate he is very good at raising all these points, but it will defeat the whole object of Clause 1.

Lord Browne of Ladyton: I accept what the noble Lord has said and I respect it enormously. I do not treat it light-heartedly. I think he makes a serious point. I feel I may have lost my powers of advocacy actually because I was not seeking to argue to change the words. I was seeking simpler clarification of the words and was using the only device that is open to me in these circumstances. I may not have served that purpose and may have opened up the opportunity for debate, but I do not think that I have done anything other than give some people who are not lawyers a window into the world that we will be living in when lawyers get hold of what we produce.

Lord May of Oxford: I do bear in mind that we want to move on. I may well have missed some of the points, but I think part of the missing of points is cultural sliding past each other. I completely agree with what the noble Lord has just said. One ideally wants a simple procedure where a good judge hears what it is all about from well-chosen people. However, I reel back in dismay when I hear other people who said that he examines the material that has been assembled. The noble Lord clearly does not mean that and if it is going to be like that then I am with him.

My one experience of this kind comes out of the Meadow case. Noble Lords may remember this incompetent statistician who created a quite serious set of problems. In the wake of it, some of the medical statisticians at the Royal Society said, “Why don’t we make a report on it?”. I said, “No, why don’t I talk to Hayden Phillips and we will get together with some legal people to ask how we can be more helpful?”. Indeed, we got together with Igor Judge, the noble and learned Lord, Lord Judge, this was before he was Lord Chief Justice, and had a very interesting conversation but it was slightly strange.

I do not apologise for boring noble Lords with this because I think it is illustrative. When I was in school, we had a rather good debating team which consistently beat the debating team led by Murray Gleeson. The captain of our team is now a High Court judge in New South Wales. They have a new way of handling expert witnesses, which is along the lines that the noble Lord just advocated. Instead of getting a credentialed expert witness such as Meadow or somebody else from a company that gives credentialed expert witnesses who are often not very expert, the judge asks appropriate people who would be a good person to bring in. Then he holds a mini tutorial in which the two sides are able

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to ask questions, but one seeks understanding. The whole Meadow thing would never have happened had that been done.

However, after we had presented this idea and a willingness to help do it, it was explained to us that we simply did not understand. We were missing the point of the legal system. What would be really appreciated would be if the Royal Society would set up a committee to formally accredit expert witnesses, which did not seem to us what the debate was about. I am worried that what is being described and what is in your Lordships’ minds are not easily going to be translated into anything that is not almost as expensive as what is currently being used as a weapon. In the situation involving Nature and Simon Singh, the people who were being criticised did stand to lose by the criticism, but the expert opinion was that the criticism was valid. It could have been settled by a judge in half an hour, but the defence cost Nature £1.5 million.

Lord Browne of Ladyton: I am again grateful to the noble Lord, Lord May, whom I think I misnamed earlier. However, I have no intention of going any further with this, having made the point I want to make at this stage. I am grateful to the Minister for his response. He has added to my understanding of what the Government are seeking to achieve, and I broadly support that. If it achieves the objective, I will go away and think long and hard about what is now on the public record. If that is sufficient, I will abandon my search for any further clarity in this area. If it is not, I may of course return to this issue at some later stage in the Bill, but for the moment I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendments 2 and 3 not moved.

Amendment 3A

Moved by Lord Hunt of Wirral

3A: Clause 1, page 1, line 4, at end insert—

“( ) For the avoidance of doubt, a claimant includes representatives of a person who has deceased.

( ) Where a claimant is a representative of a person who has deceased, a statement is only defamatory if its publication is so gross as to cause serious harm to individuals or a breach of the peace.”

Lord Hunt of Wirral: My Lords, as I move this amendment I would like to highlight the fact that it is currently impossible to bring a defamation case in which the defamed person is deceased. I readily understand that this issue affects a wide range of people. I was not proposing to deal with the Hillsborough tragedy, but with the terrible circumstances which afflicted James and Margaret Watson. In presenting this argument, I am greatly assisted by my noble friend Lord Martin of Springburn, who, like me, has visited the Watson family’s home and heard at first hand the tragedies which affected them. A number of people before the Leveson inquiry have argued that anyone who is defamed can always have recourse to the law, and therefore that those grievously affected by misreporting or

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misrepresentation of the facts of a particular case can always take civil defamation action. However, the Watson family feel very strongly that of course that does not apply in the circumstances of their case.

I anticipate that many people will know about this terrible tragedy. Without going into too much detail, on 10 April 1991 the Watsons’ daughter Diane—who was a conscientious, well-liked and much respected pupil at her school—was murdered, having been assaulted by the murderess the previous day. There was then what the Watson family regard as some serious misreporting of what had occurred, which in particular tarnished the reputation of their daughter in a way that caused them and their son, Alan, serious distress. Alan expressed his justifiable anger at the way his sister’s good name and reputation were unjustly damaged. It was being said by the murderess that the reason the murder was committed was that she had been bullied by the Watsons’ daughter. But Lord Justice McCluskey found very clearly that there was no evidence whatever to support that; Diane was a model pupil and not a bully. I have personally seen a letter in the Watsons’ flat from Lord Justice McCluskey, making it clear that that was his finding. Sadly, it was not observed. I realise that much of this case must result in a regulatory structure of the press which ensures that such misreporting can never take place again in the future.

4.45 pm

I know the Watson family have wanted more. That is why I moved this amendment. Tragically on 5 December 1992, their son, Alan, took his own life, holding the articles which had caused him such serious distress. Since then the family has been campaigning for the law to be changed so that there is legal redress for families of the deceased. I have personally seen the First Minister in Scotland, following the Scottish public petitions committee, allowing the Watsons to increase the scope of their petition to include the defamation of homicide victims. The First Minister assured me that this was under consideration in Scotland.

What the Watson family—James and Margaret—would like to know is whether or not the Minister, who is well aware of the circumstances of this case, can do anything to ensure that, in circumstances like those of this family, this can never occur again because it will be within the protection of the law that such deceased persons cannot be so seriously defamed.

I know that the Minister has not only already acquainted himself with the circumstances of this case but very kindly saw Mr and Mrs Watson on 19October 2010. Following that meeting, he said that he would examine the situation so far as the law was concerned in other countries and would give very careful thought as to the way in which the concerns of James and Margaret Watson could be taken further into an amendment of the law. This is why I beg to move Amendment 3A.

Lord Lester of Herne Hill: My Lords—

Baroness Bakewell: My Lords, my contribution to this debate will be anecdotal. I am a lay person. I am not a very experienced parliamentarian. I am a journalist.

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Even as we were debating the Second Reading of this Bill, events were engulfing the BBC in the most significant scandal of recent years, involving all the very issues that concern us here.

Early in October, a programme on ITV disclosed that Jimmy Savile had been abusing young girls for over 40 years in his television career. He had died in October 2011 and within two months BBC “Newsnight” was embarked on a programme disclosing these allegations. That programme was dropped and never transmitted for reasons that are even now the subject of two BBC inquiries; one conducted by Nick Pollard and one under Dame Janet Smith. Everyone must agree that it would have been in the public interest if the activities of this man could have been brought to light much earlier in his career without having to wait for his death.

Disasters continue to pile up at the BBC. On 2 November, “Newsnight” broadcast a report of abuse at a children’s home, in which the claims of one of the victims led to widespread dissemination of false allegations against Lord McAlpine. These allegations against an individual, who was not named by the BBC, proliferated fast and far on social networks, with individuals simply retweeting on their own sites to their many followers, who did the same. Five days later, the Guardian named Lord McAlpine as the subject of mistaken identity. Numerous law cases have ensued. The wider public has been excited by all these goings on and confused about what is and is not allowed in law. Lord McAlpine has gone to law, and substantial costs are being awarded to him in cases of defamation, but we still have a case in which several hundred girls who were abused over a period of 50 years have not been able to get redress. I cannot address the detail of this Bill, but I know that the public must be allowed to bring to law those who have caused damage and pain. Journalists and people who report in good faith what they know or believe must be allowed to do so.

Lord Lester of Herne Hill: I do not know whether my noble friend Lord Hunt knows the history of this interesting idea. In 1990, when the noble and learned Lord, Lord Mackay, was Lord Chancellor, he issued a consultation paper, and it was announced on 14 May 1991 that he had decided not to recommend any change in the law. In 1948, Lord Porter’s committee came to the same conclusion, but the majority in the Faulks report—the chairman was the uncle of my noble friend Lord Faulks—came to a different conclusion, with Kimber and Rubinstein dissenting. It came to the same conclusion that the law should not be extended in this way. Sir Brian Neill’s committee looked at it much more extensively than any previous committee and it reported in July 1991. The standard textbook—Gatley—refers to that and to the way it looked at it so thoroughly. Of course, Sir Brian Neill has been invaluable on this Bill because he was one of the expert advisers, just as he was on the Bill on defamation proposed by the noble and learned Lord, Lord Mackay, in 1996. I thought it might be useful to the Committee to recall what the Neill committee stated in July 1991.

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“In any event, we have come to the conclusion that the hurdles in the way of doing justice, in any of these circumstances, would be so formidable that there should be no change in the law. The difficulties, of course, primarily relate to establishing liability. The defendants would be placed at a very serious disadvantage for the reasons outlined above, principally though being deprived of the right, in relation to the alleged ‘victim’, to interrogate, to obtain admissions, to obtain discovery of documents and to cross-examine.

There might also be substantial difficulties for those suing to protect his reputation, but that in itself weights less heavily with us since they (unlike the hapless defendants) would have chosen to put themselves in that predicament. Nevertheless, we bear in mind that it is not only their interests which could be affected since difficulties in prosecuting the suit”—

that is after death, of course—

“could adversely affect the best interests of the deceased person whose reputation they would claim to be projecting.

Perhaps the most poignant example would be that where the defendants have chosen to pleased justification or fair comment. Not infrequently such a please will involve charges of grave misconduct against the plaintiff. When the subject of the libel is dead, however, there would be infinite possibilities for injustice. His reputation would be put in jeopardy not only without his consent but also without an opportunity to answer as he might have wished during this lifetime”—

as it were, Jimmy Savile. It continues:

“In our view it would be as repugnant to permit such an exercise as to allow criminal proceedings to survive beyond the death of the accused”.

It goes on:

“The majority of the Faulks Committee drew a distinction between the situation where proceedings have been commenced prior to death and that where they have not, such that in the former case the representatives would be able after death to pursue both general and special damages. In the latter case, however, only a claim for economic loss would be permitted”.

I hope the noble Lord, Lord Faulks, will not be upset by this.

“We cannot see the logic of this. It is just as difficult to pursue a claim for general damages after death, whether proceedings have been started beforehand or not. One argument put forward was that the wrongdoer should not escape having to pay general damages if the victim had formulated his claim. We do not understand why the mere formulation of a claim should change the parties’ rights and liabilities.

More importantly, since the difficulties inherent in this kind of exercise relate primarily to liability, the injustice would accrue whether the claim was limited to special damages or not. Even, however, where only damages were in issue, there could still be significant injustice in relation to quantification through the defendants being deprived of the opportunities normally open to litigants, namely with regard to interrogation, discovery and cross-examination.

We agree with the recommendation contained in … the Report of the Porter Committee … and with the minority report … of the Faulks Committee, written by Messrs Kimber and Rubinstein. We are of the opinion that no change is required to the present law, whether to enable proceeding to be brought, or to enable them to be continued, after the death of a person who is alleged to have been defamed”.

I do not apologise for reading that in because it is quite hard to get hold of the report of the Supreme Court Procedure Committee. I thought it right to do that.

Finally, I would say to the Watsons’ tragic example—and to my noble friend—that hard cases make bad law. For the reasons that Sir Brian Neill’s committee and others have said, this would make bad law.

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Lord Faulks: My Lords, not out of loyalty to my late uncle, I think there was a considerable amount in the majority view of his committee. The amendment here restricts a remedy to circumstances in which the defamatory statement,

“is so gross as to cause serious harm to individuals or a breach of the peace”,

which is a very significant hurdle indeed.

There is something, I suggest, that is rather crude about the fact that a defamatory statement or statements can be published and the potential claimant can read about them, can begin action in respect of them, but the moment he or she dies that is the end of the matter although the harm remains unremedied and the anxiety and loss may well have ramifications for his or her family. That is a crude cut-off point.

I know that the Minister he has already given anxious thought to this matter, but I ask him to consider, if there may not be a claim for damages, that there might at least be a remedy by way of an injunction or apology, so that those in the position of the Watsons, referred to by my noble friend Lord Hunt of Wirral, would at least have the satisfaction of knowing that their daughter’s honour had been thoroughly vindicated and could rest a little more easy in the wake of such an appalling tragedy.

Lord Browne of Ladyton: My Lords, in the House of Commons, Helen Goodman sought to amend this Bill to allow certain categories of close relatives to bring defamation actions in respect of statements made about a deceased person up to a year after that person’s death. That amendment is in the same area—in principle if not in effect—as that of the amendment moved by the noble Lord, Lord Hunt, today. She drew substantially on the Watson case and gave a compelling argument that this set of circumstances was crying out for redress. I do not intend to add to what the noble Lord, Lord Hunt, has said today, but the Watson case was one of three examples she used, and it is a particularly shocking case.

The family suffered greatly, losing two children as the result of a series of incidents, and then on the day of the funeral of their son, who undoubtedly killed himself because of the way in which his sister’s reputation was trashed, the allegations were repeated in an attempt to try to justify them. We sought to divide the Committee in the House of Commons on this issue—not, as my honourable friend Rob Flello explained, because we thought that the Government’s position in resisting the amendment could be criticised, but because of these shocking circumstances and other cases like it. Unfortunately there are far too many cases that are crying out for resolution and some remedy in the form of a response by government and politicians which recognises that there is a need at least to try to protect the reputation of a family and their daughter in these dreadful circumstances.

5 pm

I accept all the difficulties that would have to be addressed if we sought to amend the law in this way; I suspect that the noble Lord who has moved this amendment fully understands them as well and does

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not think that they can be resolved easily. However, he has done not just the Watson family but many people who find themselves in this situation a great service by keeping the issue alive. We therefore have an obligation to find a way, if that is at all possible, of addressing the hurt and grievance felt by these people. That may be in the context of the privacy law, to which your Lordships’ House will no doubt turn its attention, or in some other area of the law. This behaviour leaves people feeling devastated and hurt to the core, so there must be some possibility of redress. Reluctantly, I have to accept that changing the law on defamation will not provide that opportunity, but I shall look with interest at what the Scottish Parliament comes up with once it has considered the issue in detail. I have to say that many very learned and well informed voices down here told the Scottish Parliament that restricting smoking in public places could not be achieved effectively, but the Scots did it first, and we have all followed. That has had a marked effect on public health, and perhaps Scotland will lead us again.

Lord Lester of Herne Hill: Leaving aside smoking for the moment, how does the noble Lord respond to these various committees all pointing out the impossibility of there being a fair trial when one of the parties in a personal tort like this is dead? It is impossible to conduct a trial after death. This is a matter that one has to respond to if one is going to advocate a change in the law.

Lord Browne of Ladyton: I am enormously grateful to the noble Lord, Lord Lester, but perhaps my powers of advocacy have failed me with him once more. I thought I made it clear that I do not support the amendment for many of the reasons he rehearsed by reference to the document he read from—I am not sure what it was, perhaps it was the report of the Neill committee.

For all the reasons I have evinced, I think that it would be impossible to make this work, and I suspect that the noble Lord, Lord Hunt, also probably thinks that it would be incredibly difficult. I just want to repeat the point that we have some obligation not only to the Watson family but to many other people who have to live with the consequences of this sort of behaviour. We have to apply our minds to trying to find some way of giving them redress or at least a way of healing the damage that is done post mortem to the reputations of people who cannot defend themselves.

Lord Scott of Foscote: My Lords, perhaps I may add to what has been said. The inability to bring an action for defamation on behalf someone who is deceased does not prevent action being taken to prevent repetition of the untrue allegations that are being made if it can be shown that their repetition is likely to cause a breach of the peace. I came across such a case when I was a barrister and was once instructed to do something to stop lies, as I was told, being told about a deceased public figure. I said that defamation was not a runner but that one could get an injunction, not damages, to stop a repetition if there was a real likelihood of a breach of the peace. However, for that purpose, one

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had to get the consent of the Attorney-General. I applied to the Attorney-General, who refused to give his consent, and that was the end of the matter.

Lord McNally: My Lords, again we are indebted to my learned friends for enlightening this debate. Dealing with the reputation of the dead is a difficult matter. I recently had to answer a Question in the Lords about a pardon for Dr Alan Turing, and I answered by referring to the strict letter of the law as it now stands. I then found that someone had added a line to my entry in Wikipedia that stated that I was strongly opposed to giving a pardon to Alan Turing.

The issue is very difficult. As my noble friend Lord Hunt said, I saw Mr and Mrs Watson, and anyone who meets them cannot but be moved by the grief that they continue to feel. When I saw them in October 2010, the draft Bill was already starting its slow process down the slipway, and I suggested that they give evidence to the public consultation, which subsequently involved the pre-legislative scrutiny committee. Mr and Mrs Watson gave evidence and argued that the Government should allow proceedings to be brought in respect of defamed homicide victims. However, they were the only respondents who raised this issue, and neither the specific issue of defamation of homicide victims nor defamation of the dead more generally arose in evidence to the Joint Committee.

However, as has been said, the Watsons, who live in Glasgow, have raised this issue in Scotland, where it is a devolved matter subject to Scottish Law. The Scottish Government published in January 2011 a consultation paper, Death of a Good Name—Defamation and the Deceased. Analysis of that response has been published by the Scottish Government, but they have yet to indicate whether they are minded to propose any change to their law in this area.

I say again, as I said to Mr and Mrs Watson, that they should also cling to the judgment of the judge. That is the most sound and tested opinion of their daughter’s reputation, and it was clear and unequivocal in a way that I had hoped would have given them some of the comfort that they sought. However, I can imagine—and it does not apply just to famous people—that when things are said about loved ones after their death it must be extremely hurtful to those who have been close to them. Perhaps I should gently lob the ball back to my noble friend Lord Hunt in the hope that the handiwork he is undertaking in terms of a media response to Lord Justice Leveson and a regulatory body with teeth that bite might be an area where the teeth might bite if the media behave in the way that the Watson family suggested.

However, this amendment seeks to change the law in relation to the rights of representatives of deceased persons to bring defamation actions. It is not a provision for the avoidance of doubt. It is a long-established principle of common law that a deceased person cannot be defamed because reputation is personal. A defamatory statement about a deceased person accordingly does not give rise to a civil action for defamation on behalf of his or her estate. Relatives of the deceased also have no right of action unless the words used reflect on

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their own reputation. That reflects the central principle in civil proceedings generally that a claim for damages can be brought only by the person who has suffered the injury, loss or, in this case, damage to his or her reputation as a result of an act of omission of another person.

The Government believe that there will be significant difficulties with attempting to allow representatives to bring defamation actions on behalf of deceased persons. For example, in the event of defamation proceedings being brought by a representative of the deceased person, it would not be possible to bar that defendant from using the defences that exist to a defamation action. That would result in arguments over the truth of negative allegations about the deceased’s character, which inevitably would be distressing for their family and which could not be put to proof by questioning of the deceased.

Also significantly, this amendment does not propose to put any time limit on the period after death during which such an action would be brought. That potentially creates huge difficulties for historians wishing to engage in historical analysis and debate, especially given that there is no definition of representatives, which means that it would not necessarily need to be a close family member who brought the action on behalf of the deceased person. That could lead to a situation where a historian published a biography of a significant historical figure many years after that person’s death. He could be sued by a law firm or an individual with no close tie to the deceased person who was the subject of the potentially defamatory statement.

In the second subsection of the amendment, it is not clear to which individual the serious harm would have to be caused nor is it immediately apparent how a defamatory statement could cause a breach of the peace. However, it is because of the very serious legal and practical difficulties that I have already highlighted that the Government cannot support this amendment. For all those reasons, I hope that the noble Lord will withdraw it.

Perhaps I may say to the noble Baroness, Lady Bakewell, that the BBC and the police are investigating the Savile matters, and I think that I should leave it there for the moment.

On the point made by the noble Lord, Lord Browne, I have said before that I am amazed how often when I ask about a certain thing in the Ministry of Justice, they say, “Well, they do this better in Scotland”. I do not know whether that is a tribute to the quality of Scottish law, but it will be interesting when it is faced with the very real dilemma of where you draw the line. The noble Lord suggested a year or so, but wherever the line is drawn, there will be those who are just on the other side of it. It is a difficult dilemma, and you cannot but feel sorrow for the grief of those who are affected by it. I think that the Government are right to hold the line where it is but, as ever, we will keep an eye on other examples.

5.15 pm

Lord Hunt of Wirral: My Lords, I thank my noble friend the Minister very much indeed for his response. He said that he would lob the issue back to me, and of

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course tomorrow we will be taking note of Lord Justice Leveson’s report on the culture, practices and ethics of the press. I will certainly seek to follow his suggestions.

I should declare an interest as a practising solicitor and a partner in my firm, DAC Beachcroft, which is a national commercial law firm. Having been a partner there for 44 years, I have seen some tragedies in my time, but I do not think anything has quite moved me in the way that I was moved in Margaret Watson’s sitting room, as she went through all that had happened to her. Of course, my noble friend Lord Lester of Herne Hill is quite right; hard cases make bad law, but this does not make it any easier to explain why the law is this way in this case.

I do know that Margaret Watson told me how deeply she appreciated Helen Goodman’s speech, although she did not like the idea of a time limit. I say to the noble Baroness, Lady Bakewell, that I understand what she said, and in many ways there are issues that we must address, but perhaps she will excuse my not spending time dealing with them now. I thought that a ray of light came from the speech of the noble and learned Lord, Lord Scott of Foscote—as has been the case with many of his judgments—when he reminded us about the breach of peace. My noble friend Lord Faulks mentioned the question of an injunction. There may therefore be ways in which a situation like this could at least be prevented from happening again. As was pointed out by the noble Lord, Lord Browne of Ladyton, it was absolutely appalling for that terrible report to appear again on the day of the funeral of the Watsons’ other child, their son, and we must turn our minds to ways in which we can stop this from ever happening again. As he often does, the noble Lord, Lord Lester of Herne Hill, gave us a history lesson; the cases that took place in 1991 and 1948 highlighted issues which we have to bear in mind. However, this does not meet the concerns of the family of James and Margaret Watson. There are some ideas which this debate has raised which I would like to consider further, and find out if there is some way of preventing this situation at least from being repeated again and again. The judgment of the trial judge was that all the terrible things said about the Watsons’ daughter were not only absolutely incorrect, but also vile and dreadful to have been repeated in such a way. This letter of explanation was put into a picture frame by the Watson family.

I will consult with the noble Lord, Lord Martin of Springburn, and perhaps seek to return to this issue and deal with it in a different way. My noble friend Lord Faulks is quite right to say that there is a significant hurdle here which has to be overcome. Yet the Minister has put some persuasive arguments as to why if I return to this I should bear in mind some of the issues that he has mentioned that are not at the moment dealt with by the amendment. In the mean time, I beg leave to withdraw the amendment.

Amendment 3A withdrawn.

Clause 1 agreed.

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Amendment 4

Moved by Lord Mawhinney

4: After Clause 1, insert the following new Clause—

“Requirement of substantial financial loss

Substantial financial loss

A statement is not defamatory to a corporation or other non-natural legal persons that are trading for profit unless its publication has caused substantial financial loss.”

Lord Mawhinney: My Lords, I start by saying to the noble Lord, Lord May, how much I appreciated his earlier speech. This is the first of many occasions in this Committee that we turn to the issue that he raised with such clarity and emotion. I hope that as he read our report he felt that he and we were on the same side on this issue.

What to do with corporations in the context of defamation was one of the issues on which the Government wished us to consult. When they produced their draft Bill, it included 10 draft clauses and a range of about half a dozen issues that were clearly far too difficult for the Government to have come to a judgment on, and so they left it to us to offer advice and did not even bother trying to draft the appropriate clauses and remedies. We were happy to take up that challenge. We turn to the first of them now.

This is the first time that the word “chill” has been used in Committee and I assure my noble colleagues that it will not be the last. If any Member of the Committee is tempted to believe that the emphasis on the words “cost” and “chill” are overdone out of my mouth on behalf of the committee, I invite them to re-read the evidence given to our committee. Corporations do seek to exercise chill. I quote from paragraph 89 of The Government’s Response to the Report of the Joint Committee on the Draft Defamation Bill:

“It is unacceptable that corporations are able to silence critical reporting by threatening or starting libel claims which they know the publisher cannot afford to defend and where there is no realistic prospect of serious financial loss”.

That is the point that the noble Lord, Lord May, introduced in our earlier discussion. It is a form of bullying. It is trying to exercise right simply on the basis of size and financial strength. That is not what the law of the land is supposed to be about. I thought hard and long and decided not to trespass on Committee time by citing examples, but there are plenty of examples in the evidence that was given to us.

The key phrase is, where the publisher is known not to be able to afford, and where the corporation is not going to suffer, any “serious financial loss”. We took the view that corporations should not entirely lose the right to sue for defamation because things could be said about a company or its product that were so seriously untrue that the viability of the company was put at risk. We heard various suggestions about how this might be addressed—in the Australian model the ability to sue is limited to a company of 20 or 10 or fewer, if my memory serves me correctly. Therefore, we protected the right for corporations to sue but we linked it explicitly to serious financial loss.

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I want to read the Government’s response because I say to my noble friend, with as much fellowship and camaraderie as I can muster, that I thought that this was one of his weakest responses to a perfectly sensible and balanced suggestion. Paragraph 90 states:

“We share the Committee’s view that the inequality of financial means that exists where a large corporation sues or threatens smaller companies, individuals or non-governmental organisations lies at the heart of current concerns”.

That was a longer version of what the noble Lord, Lord May, suggests. Paragraph 91 states:

“As indicated in our consultation paper, we believe that measures such as the new procedure for determining key preliminary issues”—

I am not quite sure what that new procedure is but I guess that we will learn in Committee—

“and the introduction of a serious harm test”,

is what the Government want. The committee wanted “serious and substantial”. I have to say to my noble friend Lord Lester that I did not think that he was making a light-hearted comment. But if we do not thrash out these issues here in order to inform the legislation, what is the point of us having Committee stage at all? I suppose that, fortunately for all of us, the public are not going to spend an undue amount of time on the esoteric arguments and the fundamental legal principles that we debate here. They are just going to look at the end product. However, we should not be ashamed of the process that we go through in order to arrive at the best end product that it is possible for us to offer to the people of this country.

The determination of,

“key preliminary issues and the introduction of a serious harm test will help to reduce the cost and length of proceedings and deter trivial and speculative litigation, and should lessen the likelihood of attempts being made by corporate or wealthy individual claimants to intimidate defendants with limited resources”.

I have to say to my noble friend that that is a spectacular case of hope over experience. Had he said that when he graced us with his presence, I would have glared at my colleagues to ensure that none of them smiled inappropriately at that point. I think that that is far short of the standard which Governments should set in responding to serious investigative efforts on behalf of Parliament.

It raises for me that old problem to which I have made reference already. Cost is at the heart of this and I hope that noble and learned Members of this Committee will have read our report with care. At no point did we seek to criticise or even directly comment on judicial procedures. That was not our responsibility. As chairman, I was not prepared to have anything written down which even hinted at a lack of confidence in the judiciary. But that having been said, we have costs that cannot be sustained and are counter to the legal rights of so many of our citizens. We have mechanisms that relate government to the judiciary. If case management, which is our unanimous view, is adding to cost, it needs to be addressed. We did not seek to address case management in the Bill, which would have been, in my view as chairman, inappropriate. However, we have to suggest to the Government that they need to find accepted and acceptable ways of conveying to the judiciary that changes need to be made in case management in order to reduce costs and thus make

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this Defamation Bill effective for the maximum number of people. I am afraid that what the Government said in response to that suggestion signals to me, at least, that we have failed to persuade them of the seriousness of that argument, and so I repeat it.

5.30 pm

Lord Lester of Herne Hill: I am not sure whether the noble Lord has followed what the Minister was saying. The Government have asked the Master of the Rolls, Lord Dyson, to look at matters of procedure and to report as soon as possible. He has agreed to do so, so those matters are not in the Bill but are in the procedural forms that will accompany it. That is why they are matters for the judiciary to deal with, and so far as I am aware, they are going to deal with them as soon as they can.

Lord Mawhinney: As always, I am grateful to the noble Lord for his interjections. Let me cheer him up by assuring him that I was aware of that even before my noble friend said as much a little while ago. In fact, I remember being told that when we were holding our hearings. However, let me be plain about my difficulty here. This subject has been kicked into the long grass many times over the past 50 years, something my noble friend Lord Lester well knows because his was one of the balls that got kicked there. He is asking the Committee yet again to accept on faith a promise made by a Government Minister that there will be heaven tomorrow, but it falls just a little short. The truth is that while we will all await with interest what the judiciary decides would be an appropriate set of changes, if any, it is perfectly legitimate for Members of your Lordships’ House to ask the Government, “What changes do you think need to be made and what are you going to do about it?”. In essence, that is the question which lies behind the amendment, although it is in the framework for corporations.

While I am on my feet, perhaps I may say that so far as Amendment 8 is concerned, I thank the noble Lord, Lord Browne of Ladyton, and the noble Baroness, Lady Hayter of Kentish Town. It is extremely close to the wording used in our report, and in that I suspect that I am looking at the hand of the noble Baroness, Lady Hayter. I thank her for valuing it. I beg to move.

Baroness Hayter of Kentish Town: Before I speak to the amendment that has just been moved, and to Amendment 8 which is tabled in my name and that of my noble friend Lord Browne and the noble Lord, Lord Lester, perhaps I may also pay tribute to the noble Lord, Lord Mawhinney, for his work as chair of the Joint Committee. The Minister will recall, because he was at the Fabian Society even before I was, that we produced a book entitled The ABC of Chairmanship written by Walter Citrine. It was a brilliant book, but I have to say that I feel that a small codicil should have been added to it, having served under the chairmanship of the noble Lord, Lord Mawhinney, which is this: see how he does it because that is the best way to do it. I learnt a great deal from him.

As the noble Lord, Lord Mawhinney, has said, our recommendation comes from the Joint Committee and is broadly supported, including by Liberty, the

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Libel Reform Campaign, the Media Lawyers Association and Which?. As has been suggested, many of the cases which led to the pressure to reform of the law on defamation did not come from hurt individuals but from corporations, often using their deep pockets and access to lawyers to stifle public criticism of them or their products.

It was an American corporation that sued cardiologist Dr Peter Wilmshurst; the British Chiropractic Association sued Simon Singh; GE Healthcare sued Danish radiologist Professor Thomsen; Trafigura sued the BBC; manufacturers are forever threatening or trying to sue Which?; and McDonald’s infamously and, as it turned out, rather stupidly sued two individuals. Nature, the Lancet and the British Medical Journal—organisations that almost by definition exist for the public good—are no strangers to the threatening letters, mostly from corporations. Similarly, we heard in the Joint Committee from Mumsnet, which told us that it was very often the purveyors of baby foods and products, rather than individuals protecting their reputations as parents, which threaten to take action. It is often corporations which do not want negative reviews or sensitive information in the public domain that use this threat.

Yet the high cost of defending even a ludicrous claim brought by a corporation is an inequality of arms—or bullying, as the noble Lord, Lord Mawhinney, said. It is because a corporation can bring a claim where a defamatory statement is said to harm its trading or business reputation that a threat is all that is needed. The Joint Committee on Human Rights regretted the absence from the Bill of some reduction of the use of defamation proceedings by corporate claimants. Its view is that,

“businesses ought only to succeed where they can prove actual damage. The Bill should be amended so as to provide that non-natural persons are required to establish substantial financial loss in any claim”.

The report refers to the evidence of Professor Phillipson, who said that the failure to impose any restrictions on corporations’ ability to sue,

“renders the law on reputation inconsistent and incoherent. Defamation law and the protection afforded under Article 8 has developed on the basis that the protection of an individual’s reputation is a significant human rights issue. Corporate claimants have neither personal emotions nor dignity, and yet are treated as natural persons for the purposes of defamation”.

The report also quotes the Culture, Media and Sport Select Committee’s call for a new category of corporate defamation, by requiring a corporation to prove actual damage to its business before an action can be brought.

The Joint Human Rights Committee dismissed the MoJ’s refusal to countenance any change and concluded that,

“businesses ought only to succeed … where they can prove actual damage”.

Regrettably, as we know, the Government opposed a similar amendment to this in the Commons on the grounds that a corporation has a reputation, even where that does not affect its bottom line. We on this side accept that where damage to reputation affects the company's finances—for example, one can imagine an incorrect allegation that Perrier caused the current

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vomiting virus that is going around and that that affects the sales and the future of that company—redress should be possible in such cases.

Our amendment is modest. It does not seek to take away all rights for companies to sue, but would merely require them to show substantial financial loss before they were able to start an action.

Lord Triesman: My Lords, I have broad sympathy with this amendment and with Amendment 8, and I want to share a small amount of experience with the Grand Committee. I declare an interest as a former general secretary of the Association of University Teachers. One of the things that consistently caused difficulty, probably more in the scientific community than elsewhere but across a number of disciplines, was when people producing research documents and reports found themselves threatened to a point where they decided that they would not publish or where the journal to which they had submitted their article would not publish. In many cases, it had a direct impact on them, not just because the research was suppressed but because publishing in journals overseen by eminent academics is usually the way in which much of the opportunity for promotion and career advancement takes place. Refereed journals are one of the most fundamental routes to promotion to the most senior positions in academic life, so there was the loss of research credibility, the loss of often many years of painstaking research and a very significant barrier to career advancement.

It was one of the inspirations that led some of us to help in the drafting of the 1997 UNESCO normative instrument on academic freedom; I had the great privilege of taking part in this. It was intended to create for academics—although I understand why it should have a wider impact than just academics, that was who we were considering at the time—the entitlement to publish things that were accurate, truthful, based on solid research and, on occasion, unpopular or unfashionable as well. We none the less intended to make sure that all that could happen in the way that all of us would want because a world where people cannot publish or feel afraid of publishing serious academic research is a much impoverished world.

The reason I have such strong sympathy with what the noble Lord, Lord Mawhinney, said is because it is incredibly difficult. With whatever assurances are being given about separating out costs from matters of substance, it is difficult to see how any rational line of defence is available to people. I say with at least a modicum of respect for the lawyers here—and they will understand that I am merely a mathematician and do not have their formidable skills—that the issue that is of concern to many people who are not lawyers is that we have a legitimate view on these matters that is entitled to be heard. In this case, it becomes very important to see all the things clustered together in order to get the right result.

I shall conclude by making a point that I have made before in your Lordships’ House. The amendments deal with corporations. When corporations, particularly wealthy corporations, decide to become claimants, defendants cannot match their power with any equality of arms. It is also not at all infrequent that the

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claimant finds that they have no equality of arms with the defendant. If you find yourself contesting one of the major newspaper groups, it will tell you in pretty brusque terms that if you really want to bankrupt yourself, to see yourself and your family in penury for very many years, to lose your house or so on, just come on if you feel strong enough. The reverse of this is also true. I make that point because I would not want it lost.

5.45 pm

Lord Faulks: My Lords, I support these amendments and what the noble Lord, Lord Triesman, said. He is quite right about the position of claimants. A number of times, I have done my best to dissuade any claimant suing any newspaper for the reasons that he gives.

It ought to be remembered that companies which feel that they have been wronged have a battery of remedies available to them, such as passing off or the tort that has very often been used: conspiracy. It was used particularly by Tiny Rowland in his battle because it meant that he did not have to go into the witness box, give evidence and then be cross-examined.

The law is familiar with the requirement of having to prove what is known as special damage in the context of slander, so there is nothing unusual about a particular hurdle being put in the way of corporations, as these amendments suggest. For the reasons given, including the potential for bullying, I entirely endorse them. However, I have one slight reservation in that there are corporations and corporations. Small companies that effectively comprise an individual or a series of individuals may have their reputation damaged. I am concerned that the hurdle should not prevent them suing when real damage is done to them.

The noble Baroness, Lady Hayter, rightly referred to the conclusion of the Joint Committee on Human Rights, of which I have the privilege to be a member, where we suggested that businesses should succeed in defamation proceedings only,

“where they can prove actual damage”.

She left out the last sentence, which states:

“This requirement should be relative to the nature, size and scope of the claimant business or organisation”.

That is an important qualification. I hope and trust that this hurdle would be interpreted by the courts in a way that is relative to the size of the company involved: that is, according to whether McDonald’s, Google or a relatively small company was being dealt with. Subject to that, I entirely support these amendments.

Lord Lester of Herne Hill: My Lords, some believe that corporations should not be allowed to sue for libel at all. I think that that is wrong because although the feelings of a corporation cannot be hurt, it can be hurt in other ways, such as hurt to its reputation and trade.

In my Private Member’s Bill, I included a requirement of serious financial loss or likelihood of it, but I was not able to persuade Ministers or their officials that that was necessary because I think they took the view that it was quite clear as a matter of common law and

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therefore did not need to be spelt out in a Bill. Therefore, I am particularly enthusiastic about supporting these amendments which seek to do what I thought should have been done in the first place, as it were.

The problem of David and Goliath, to which the noble Lord, Lord Triesman, referred, which may apply to a very powerful claimant or a very powerful defendant, cannot be tackled by the Bill on its own but needs to be tackled holistically. Above all, it needs to be tackled by wise case management. I do not say this because I am sitting opposite three distinguished former members of the judiciary but because I have enough confidence in the judiciary and in the common sense of judges to know that if they are given enough encouragement—as I am sure they will be by the Master of the Rolls and through changes in the Civil Procedure Rules and so on—to grab a case at the beginning and to find ways of trying to equalise the unequal power of parties, they will do so. They can do so in a lot of ways that do not need to be in the Bill itself. They can do so through the application of the Civil Procedure Rules or by the application of common sense. For example, there is no reason why a judge cannot cap costs at the outset or why he or she cannot determine that there is an extremely powerful defendant or claimant and that the other party is unable to have equality of arms. Judges can also lay down procedural steps to be taken, including alternative dispute resolution and matters of that kind. In my view all that does not need to be legislated upon by Parliament because we are trying to find out what is sensible for the legislature and the judiciary to do. My view is that you lay down some general principles but do not interfere with the discretion of the judiciary in interpreting those principles.

Lord Browne of Ladyton: I apologise that I was out of the Room when the noble Lord started speaking, but I substantially agree with him. In fact I totally agree with him that the management of cases by the judiciary can make a significant difference to the length, complexity and cost; it can deal with all of those issues. Will he at some stage in our debate—it may not be appropriate to do it now, but we will get an opportunity—with his vast knowledge of the courts we are talking about here, and I do not have that knowledge, explain why that appears not to have been happening? What are the impediments to it? How can we address them? Has the holistic approach failed? If it has failed in his view up until now, where has it failed? That is the nub of the issue. He is conscious of the time that we are spending debating these issues—and so am I—and we may be spending our time debating the wrong things.

Lord Lester of Herne Hill: I should be careful what I say, because I shall now offend some members of what is known as the libel Bar. I am not a proper defamation lawyer, although I have dabbled in it. My dealings with my colleagues at the libel Bar have led me to conclude that the great technicality and obscurity of elements in the existing law are no fault of the judges but are very much the fault of my colleagues who have enjoyed very inward introspective legal practices that have added to the problems. In the framework we now have, it is extremely hard for the judiciary to cut

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out the nonsense that is there as a result of my fellow practitioners. I am sorry to defame a group of them, but there it is.

The other thing I wanted to say, which my noble friend Lord Faulks has referred to, is about the unsatisfactory idea of focusing on the company as though the company is a monolithic concept. If you focus just on the company, you leave out all kinds of other powerful bodies that are not companies at all: a trade union is a good example, although that has been dealt with in the case law in a particular way; many unincorporated associations; and many bodies that are very powerful NGOs, for example. The problem with the word “company” is that it is both underinclusive and overinclusive. It is underinclusive because it does not catch other powerful bodies that are not in corporate form, and it is overinclusive because the little dress shop company that my noble friend Lord Faulks has in mind—a one-director company—is in a completely different position from McDonald’s. That is why it is fact-sensitive and can be dealt with by the judiciary only on a case-by-case basis.

The amendments that we are now considering do not trespass on the courts in overreach. They are dealing with one aspect of the problem. The holistic approach involves case management, procedural rules and guidance in order to counter the kind of problems that the noble Lord, Lord Triesman, had in mind.

I am therefore enthusiastic about these amendments, but they do not and cannot deal with the whole of the problem.

Lord May of Oxford: I am wholly in favour of these two amendments. I want to raise one question that probably illustrates one of my many areas of ignorance. I worry a little bit that saying a statement is not defamatory unless it has caused substantial financial loss will run up against classic examples of where a large organisation, like a corporation, has used costs to silence someone, but there are many examples of where people have persisted in their criticism. If anyone who is interested in these case horror stories e-mails me, I can send them a list of a dozen different illustrative stories. Despite costs of £500,000 or £1.5 million, and the loss of time to the person involved, the better cases, such as those involving an unsafe medical device or people in South Africa being told that they should buy a particular person’s vitamin pills and that AIDS medicines are ineffective, have been effective and have inflicted serious loss on companies that should have been put out of business.

That brings us back to our very first issue. In most of these cases, a good judge, with two or three experts, could have settled the matter in half an hour. Whether AIDS drugs or vitamin pills are effective is beyond dispute; yet it took 17 months and £500,000 to settle it. I suspect that I am, in some sense, out of order by raising this, but there is a slight overtone that causing substantial damage gives you a reason to start suing someone. I think that we need to go right back to our first discussion about having to ask whether the damage was based on an accurate description of untruths or unknowing or knowing faults and lies in what was being marketed.

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Lord Phillips of Sudbury: My Lords, the noble Lord, Lord Hunt of Wirral, is not here, but he made me think that I should have declared an interest at the beginning as a solicitor whose firm is Bates Wells & Braithwaite, which I now do. I have one general concern about these two amendments and one technical point that I want to make. The first issue has been referred to again and again, and it cannot be referred to enough; namely, the deeply unsatisfactory nature of libel and slander in terms of costs. None of us has much idea of what to do about it. Right from 1948, it was never part of the legal aid scheme, for perhaps understandable reasons. It has got worse as costs have risen faster and further, as the noble Lord, Lord May, among others, has said.

I hope devoutly that the good Lord Dyson will be bold in the way in which he looks at all this. As my noble friend Lord Lester has said, we need to think well outside the box. I also wonder whether there is the possibility of some insurance answer to this. For example, if all household policies had a libel insurance provision, the cost might be relatively insignificant when spread across the whole population.

In these two amendments, I am anxious about the ethical reputation of companies. The noble Lord, Lord Faulks, correctly drew our attention to that part of the Joint Committee on Human Rights report which distinguished between a huge, quoted multinational on the one hand and a small, owner-occupied, so to speak, business on the other, but I do not want to have a sheep and goats approach to reputation and corporations. I think that everyone in this Committee would agree that one of the great disappointments of the past 10 or 20 years has been the weakening of any ethical identity on the part of the great corporations. In the financial world, you can almost talk of a demoralised—literally de-moralised—community of companies where ethics and moral identity are now almost absent. I must confess that I do not want to add to that by saying that corporations can never sue in respect of an attack on their ethical identity.

One thing that one of the noble Lords who tabled this amendment might enlighten the Committee on is whether confining actions to where there is or is likely to be substantial loss can deal with the more difficult case. The noble Baroness, Lady Hayter, talked of the Perrier case, in which the loss was pretty direct, obvious and immediate. However, there are many other situations where serious defamation would be extremely difficult to calculate in terms of any direct financial consequences. That concerns me, because I want corporations to re-enter the world of ethics. They have a character and a personality—or they can—and therefore I am anxious about them.

My last point is in respect of Amendment 8(3), which mentions “for profit” organisations and then goes on to exclude charities, non-governmental organisations or other non-profit making bodies from this limitation. This point concerns the drafting only. Many charities and NGOs are profit-making, but not profit-distributing. I think that subsection needs to be changed, because a charitable hospital, for example, needs to make profits in order to invest in equipment, buildings and so on. That is well accepted and entirely

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consistent with charitable status, but, of course, such an organisation is not profit-distributing. That is a technical point.

6 pm

Baroness Hayter of Kentish Town: My Lords, although I am sure Lord Mawhinney will respond, as he moved this group, I shall make one point on the amendment standing in my name and that of my noble friend Lord Browne. If a company was attacked on its ethical role, that would also show in its share price—those of my generation might remember Barclays selling arms to South Africa. This would not necessarily affect sales, but it could still substantially affect a company’s financial position because its share price would be affected. There are other ways of measuring financial loss, and this is similarly the case with very small companies. If a very small shop of the kind found in Kentish Town was accused of having rats in the cellar, that would immediately lead to a drop-off in the number of people shopping there, and therefore I think that would count as substantial loss. Concerning the specific drafting, once the Minister has accepted that he will move his own amendment on the arguments we have given, I am sure his officials will make sure that the drafting is perfect.

Lord McNally: I have known the noble Baroness so long that I know when she is tempting me into sin. However, this has again been a very useful, very helpful debate. I confess that when I started out on this one of the things I wanted to do was to address the problems that have been faced by academics and others in making legitimate criticism and legitimate comments. Having listened to a large number of individuals and interested parties, there is no doubt in my mind that this law can have a chilling effect, and it is used very ruthlessly to stifle debate. I hope that we can do something to address this as we progress this Bill.

The noble Baroness, Lady Hayter, has obviously been very kind to me, because she did not point out that when I gave evidence to her committee I said that in my opinion corporations should not be allowed to sue. The then Lord Chancellor, Ken Clarke, took me into a quiet room, sat me down and, with the persuasiveness for which he is renowned, convinced me that corporations do have reputations and what the noble Lord, Lord Phillips, described as an ethical identity. This is a serious point, which has come out in the debate. As we go through the Bill, we are continually trying to get the balance between defending reputation and defending free speech. They are continually in our mind.

Regarding costs, I again point out to the noble Lord, Lord Mawhinney, although he clearly has doubts about the way these things are done in government—I do not know whether that comes from personal experience—that we have tasked the Master of the Rolls with the job of looking at this matter within a specific timescale: by next March. Since then, we have had a clear statement by the Prime Minister that the Government accept the recommendation by Leveson that there should be a cost-transferring system in

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defamation. Any powers of influence I have will be used to try to ensure that this is not go into the long grass. I am quite sure that the Master of the Rolls, Lord Dyson, will understand the urgency and the expectation that comes from the work with which he has been tasked.

Lord Mawhinney: I am grateful to my noble friend. I understand the point that he makes and he understands that part of the purpose of the Committee is—as we cannot vote—to put a little encouragement in front of him to think again. Regarding that, will he tell the Committee what the Government have said to Lord Dyson that they wish to see covered in the recommendations that he brings forward in March?

Lord McNally: In terms of what was actually said to Lord Dyson, if it is on the record somewhere, I will make it available to the Committee by next Wednesday. There is lots of clustering behind me. Even after two and a half years, I am still in awe of what happens behind the Minister.

The Civil Justice Council has been asked,

“to identify whether there are meritorious actions for defamation and privacy, which could not properly be brought or defended without some form of costs protection … if so identified, to advise … in which types of cases (or stages of cases) some form of costs protection should apply; and … what options for costs protection might be considered, with their advantages and disadvantages”.

Since then, there has been the added rider of Lord Justice Leveson’s opinion that cost QOCS should be applied to defamation cases. Therefore, I am sure that my noble friend’s scepticism will be noted by Lord Dyson and he will see that eyes are on him while he does this important work. Likewise, on the question of process, I refer to my letter of 10 December on early resolution—I think that this time I have the month right. We have asked the Civil Procedure Rule Committee to consider in the new year:

“The main issues which we consider should be determined early where they are matters of dispute are: Whether the statement is defamatory (including whether it satisfies the new serious harm test) … What the actual meaning of the words complained of is … Whether the words complained of are a statement of fact or opinion”.

The letter continues:

“We propose to seek the Civil Procedure Rule Committee’s agreement to provisions enabling either party to make an application for a ruling on any (or all) of the three issues listed above at the time of service of the particulars of claim (or at any time thereafter)”.

I hope that those changes in procedure will address this problem that has been highlighted as part of the issue. When I met Simon Singh, he mentioned to me that these issues of definition ran up the costs long before the case got to court. We are not going to cure everything, but if we can tease out of the system delays that work against individuals, rack up costs and cause this chilling effect, we will certainly be going in the right direction. I believe that on inequality of arms, the chilling effect, costs and early resolution we are in the right ballpark, as our American cousins say.

Corporations are a matter where we will listen to the Committee, but I must tell the Committee that in other places and parts of government there is strong

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resistance to conceding on this point. Let me provide the Government’s position. We recognise the concerns that lie behind Amendments 4 and 8, and the arguments that have been made by the Joint Committee and others in favour of restricting corporations’ right to sue in defamation. However, the Government believe that in this area there is a difficult balance to be struck. Clearly, businesses are often powerful and it is undesirable that they should be able to bully individuals or organisations with much more limited means by bringing, or threatening to bring, defamation actions, simply in order to stifle debate. Equally, we must recognise that businesses have genuine reputations to protect. They can be subject to unfounded or spiteful allegations that harm not just the management but shareholders and employees. This Bill seeks to make it harder for corporations or wealthy individual claimants to intimidate defendants with limited resources, but without removing their ability to seek redress where their reputation is genuinely damaged. The new test of serious harm will provide an effective deterrent to trivial and vexatious claims, regardless of who the claimant is.

It is also important to bear in mind the fact that corporations are already unable to claim damages for certain types of harm, such as injury to feelings. This means that to satisfy the serious harm test, they are likely in practice to have to show sufficient actual or likely financial loss. The serious harm test and other provisions in the Bill, such as the simpler and clearer defences and the removal of the right to jury trial, together with the accompanying procedural changes that we propose will reduce the cost and complexity of proceedings to the benefit of anyone trying to defend a case. In this context, the Government do not consider that the introduction of a permission stage for corporations would be appropriate. As part of the procedural changes that we are proposing, the court will be able to deal with the key issues in dispute at as early a stage as possible. An additional permission stage for corporations would almost certainly add to the costs involved.

Importantly, we have recently announced our intention to introduce cost protection measures in defamation proceedings. I referred to them as regards the Civil Justice Council. This will help address concerns in respect of cases involving an inequality of arms and will ensure that claimants and defendants of limited means are not deterred from bringing or defending defamation claims where the other part is a corporation, newspaper or individual with substantially greater resources. All told, we consider that this represents a fair and balanced approach that gives defendants of limited means significantly better protection than they currently enjoy and lessens the likelihood of intimidatory tactics being used against them, while also ensuring that corporations can still bring legitimate claims where their business reputation has been seriously harmed by unfounded allegations.

I have no objections at all to my noble friend Lord Mawhinney continuing to prod me on these issues, but I believe that the approaches we have made to the Master of the Rolls and the Civil Justice Council are the best and quickest way of addressing them. However, his continuing scepticism will be a spur to us all.

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6.15 pm

Lord Lester of Herne Hill: Most of what the Minister has said is extremely persuasive, and certainly his criticism of Amendment 8, to which I have added my name, is understandable. With reference to Amendment 4, which is much less detailed, if, instead of just saying,

“unless its publication has caused substantial financial loss”,

it said, “has caused or is likely to cause substantial financial loss”, whereby the proposed new clause would read,

“The Statement is not defamatory”,

and so on, that would do little more than restate the existing common law. Would the noble Lord and his team consider something that would set out in the Bill the actual common law position without debarring corporations or creating new hurdles for them?

Lord McNally: Once again I shall use my ultimate defence: I am not a lawyer, so I am not going to say yes on the hoof. I also wonder whether the words “substantial financial loss” covers reputation, as was referred to by my noble friend Lord Phillips. However, as I have said throughout our debate, I am listening. When I go back to the Ministry of Justice, I will certainly sit down with my officials and talk about the points that have been made and ask whether any of them can substantially help what is still my objective, which is to deal with the real problems such as those that have been set out by the noble Lord, Lord May, and other noble Lords. These represent evidence of how, on the one hand, corporations can bully, intimidate and chill, while, on the other, they may have reputations that can and should be defended. That is the balance that we seek to strike. I will look at what my noble friend has suggested, and I look to my noble friend Lord Mawhinney to retain his scepticism, but to withdraw his amendment.

Lord Mawhinney: I accept without reservation the determination of my noble friend the Minister to face the real issues that surround this legislation. There is no doubt or scepticism in my mind about that. I am grateful to colleagues for what has been a good debate. Perhaps I may say to my noble friends Lord Faulks and Lord Phillips, and to the noble Lord, Lord May, that broadly I agree with everything they said. The committee decided very early on that we were not constituted to draft legislation. We did not have the ability, skills or the knowledge to do so and we did not think that that was what we were being asked to do. I accept that all three speeches made the point that the drafting could be improved.

How it is improved is, of course, a matter for the Government, not for the committee because the other thing that we were very careful to insist on was that we were not making the law but simply offering advice to the Government, and they would in due course present to Parliament what they thought the law should be, and Parliament would decide whether it agreed with the Government. Therefore, in all three cases, without going into the details of what was said, I accept generally the points that were made. I hope that my attitude of hitting the big issues and leaving the Government to do the drafting and fill the smaller

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cracks is the right way to proceed, although I particularly thank the noble Lord, Lord Phillips, for his phrase about wanting to encourage companies to re-enter the world of ethics. I am sure that he was speaking for the whole Committee when he said that.

I declare an unusual interest in that I am a life member of the Association of University Teachers. That interest is not often required to be mentioned. However, I mention it specifically in relation to the contribution of the noble Lord, Lord Triesman. As one of those who were subject to his leadership, I want to put on the record how excellent that leadership was. That qualifies him and what he said to be taken seriously by this Committee. I hope that the Minister will reread the noble Lord’s contribution several times.

I could not agree more with my noble friend Lord Lester of Herne Hill that certain things should be statutory and on the face of the Bill and that others should not be statutory and therefore not on the face of the Bill. I learnt through many a happy hour spent on the committee that case management was one of the things that should not be put on the face of the Bill, so I entirely agree with my noble friend. However, I have a caveat which he did not mention but which I should like to add to what he said: namely, we have to be confident that case management will be addressed non-statutorily and will be changed. I use the verb “changed” deliberately because the evidence was submitted to our committee over and over again that case management issues drove up cost, caused delay and huge irritation, and separated perhaps millions of our fellow citizens from the protection of the law. That is the case management that we have at the moment.

I am not being particularly critical and I do not have the skill or the knowledge to say what aspects of case management need to be changed but my committee was adamant that case management must be addressed. I add a rider. We did not suffer from delusions of grandeur. We did not believe for one moment that this was a penetrating shaft of light into our consciousness that had not occurred to anybody before. Indeed, if the Minister pushed me, I could probably find bits of evidence to support that statement.

That brings me back to reflections on Mawhinney’s scepticism. It is not arbitrary and capricious. It has a history, although not necessarily one that is identified with me personally. Our committee was delighted when it came to the conclusion, not least through the Minister’s personal efforts, that he wanted to take this subject seriously. I think that on the very first page of our report we welcome the fact that we thought he was taking it seriously because so many of his predecessors had danced round this maypole and then gone home and not taken any serious steps. So the Minister already has lots of brownie points in the bag. What we need to do now, with all good will, is to help him get across the finishing line. In reflecting what has been said on this amendment, I think that that will be helpful. Particularly at this time, we all recognise that there is a balance to be struck between defamation and taking measures that might inhibit economic growth, with all the benefit that that would produce.

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However, I refer the Committee back to the noble Lord, Lord Phillips. It was he who introduced the concept of ethics, which is relevant to this conversation. I say to the Minister, we would all be saddened if there were nothing in the Bill that talked about corporations and their responsibilities. I mentioned earlier that we had a long debate about the values of codification as against writing new statute. The reason that we saw importance in codification from time to time was—a point made earlier by, I think, the noble Lord, Lord May, but if I am wrong, I hope to be forgiven—that ordinary people ought to be able to read the law of the land and understand broadly what it means.

The common law is hugely important but way beyond the understanding of the normal citizen, in terms of its actuality and potential change. It may therefore fail in some respect an important element of transparency that should characterise our laws. That is not—I repeat “not” in front of my noble and learned colleagues—an attack on the common law. This report does not attack the common law, which is hugely important in the way that we are governed and in the judgment, character and integrity of our judges. However, this is a case whereby putting some codification in Bill would send a message that corporations have responsibilities and that we are not impressed at the way that some of them occasionally discharge those responsibilities.

With that encouragement, I am happy to beg leave to withdraw my amendment.

Amendment 4 withdrawn.

Amendment 5

Moved by Lord Mawhinney

5: After Clause 1, insert the following new Clause—

“Requirement for action brought before court

Action brought before court

No action for defamation shall be brought before a court unless—

(a) mediation or neutral evaluation has taken place;

(b) voluntary arbitration has taken place; and

(c) when a case has reached the court, the court has taken all reasonable steps to minimise delays and costs that will ensue in proceedings.”

Lord Mawhinney: My Lords, this amendment gets to the heart of one of the other major issues that we addressed in the committee, and on which multiple evidence was presented to us. Many people kept saying that a system should be put in place which stopped cases that did not necessarily have to do so going to the courts, and that many who were involved in potential litigation simply wanted someone to say, “Sorry” and/or withdraw what was said. They did not need a court case. They did not feel it imperative to be cleared in a court of the land; they simply wanted an apology. The evidence that we received was that this would be facilitated if the law laid down a requirement that before a case reached court mediation or voluntary arbitration had to be pursued. That might not take long; it might become clear fairly quickly to a judge that no mediation or voluntary arbitration in the

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world would resolve the matter, and that the case should go to court. However, we were not satisfied that these forms of solution were being pursued either often enough or seriously enough, and we thought that for that to happen, they needed to be in the Bill. For that reason, I am happy to move the amendment. I beg to move.

6.30 pm

Lord Browne of Ladyton: I shall also speak to Amendment 7, which stands in my name and in the name of my noble friend. The underlying purpose of this amendment is similar to that of the amendment which has just been spoken to by the noble Lord, Lord Mawhinney. He seeks to do much the same thing as the amendment that stands in my name, but by a requirement for action before a court action can proceed. I seek to do it by what could be called—in the context of the discussion that we have just had—a multiple fracture of the prohibition against putting case management in the Bill.

I have no delusions that this will find support in Committee because it is such a multiple fracture, but it is quite deliberately so for a purpose. It is our attempt to implement the recommendations of the Joint Committee, but it goes further and does so for very specific reasons. Those reasons are that on this side of the House we have to be convinced that the holistic approach that we favour can address the fundamental issues of the problem that is before us and has its manifestation in all the many examples that we have heard this afternoon and which are recorded faithfully in the deliberations on this Bill since it was first introduced in its draft form.

I muse here—listening to the noble Lord, Lord Mawhinney, speaking to us in his distinctive Northern Irish accent and as I rise to speak in my Scottish accent—that there is more than one jurisdiction in these islands. I consider also, and I have considered this in other circumstances often, that until very recently—over hundreds of years certainly as regards Scotland—this Parliament in a statutory sense legislated for more than one jurisdiction on these islands. Only one of these jurisdictions has turned into the defamation capital of the world.

The answer may be as simple as the answer given to my intervention on the noble Lord, Lord Lester of Herne Hill, that this is a function rather of a niche ability that has developed in the Bar in London, which cannot be contained by case management appropriately with the tools that we give to the judiciary. There may be other reasons for it, but it seems that the answer probably to what we need to do to the defamation laws of England and Wales lies somewhere in these islands.

I am not entirely sure what it is because I have no particular expertise in this area of the law, but it is curious that lawyers, judges, courts and laws that are very similar to each other have operated in these islands in distinct jurisdictions but only one of them has got into this difficulty. Trying to identify the reason for that, and to address it, is what should be exercising our minds. We may, as I suggested in my intervention, be addressing it in the right way by changing the test and by doing all the other things that

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are in this small but comparatively complex piece of legislation or it may be much more important that we make changes in the way in which cases are managed and in which the costs of them are racked up.

This amendment seeks to insert a clause for early resolution procedure against the background that the Government originally announced that they would do this in the draft Bill and in the Commons explained why they were not willing to do that. We have now the advantage of the letter of the noble Lord, Lord McNally. I am pleased that the document that he read out earlier in relation to cost protection is the final annexe to his letter. This document does not need to be put into the public domain; effectively, it is in the public domain in any event. With my imperfect understanding of civil procedure in England, it seems to me that this protects a party from the liability to pay the other side’s costs if a case fails—if I understand what cost protection is. This seems to me to be half the problem.

If I had to face the prospect of having to litigate in an action for defamation with a substantially wealthy opponent, no matter which side of the argument that opponent was on, I suspect that in this jurisdiction it would cost me a significant amount of money just to engage in that litigation. I would be terrified at the prospect of losing and having to pay the other side’s costs, and I am pleased to note that parties in defamation cases may be protected from that. However, the prospect of having to pay the costs of my own side would still be terrifying.

The letter goes further and provides what I hope are many of the answers to the points being raised in this debate. The documents attached to it seem to be a set of guidelines on how the Government would like the existing case management rules to be amended or applied in order to try to achieve earlier resolution. It looks at how the existing strike-out procedures should be applied. Indeed, on reading the Minister’s letter in a holistic way, it is clear that, while not using exactly the same words, many of the issues are reflected in the amendment we have tabled. However, it is important to note that in this amendment we have gone further and provided that one of the key issues to be determined, under subsection (3) of the proposed new clause, is costs management.

To save other noble Lords and noble and learned Lords from pointing out why this is an inappropriate thing to do in a Bill, perhaps I may say that I readily accept that that is right. However, I think that the Government need to be given the opportunity to spell out the steps they intend to take to address the issues that lie at the heart of the problem we are facing. If we can make a contribution towards shaping a holistic approach, despite the fact that this goes beyond what the Bill should say in the strictest sense, that will assist in increasing the confidence of Parliament in this revision of the law. What is much more important is that it will increase Parliament’s confidence that a holistic approach, as referred to by the noble Lord, Lord Lester of Herne Hill, will not quickly put us back into the situation we are in already, but that there is some hope of addressing it.

I am offering the noble Lord this amendment to provide him with an opportunity to explain in accessible terms the steps that the Government are taking which

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are complementary to the legislation, and to offer the Committee some assurance that not only will they be completed by the time the legislation is ready to be put into force, but that they will be effective in terms of addressing the issues that are at the heart of this problem. Before I sit down I would suggest to him that if it has not already been done, perhaps a study of how at least one of the other jurisdictions in these islands deals with defamation issues might be instructive. I will say again for the benefit of the noble Lord, Lord Lester, that of the several jurisdictions in these islands, only one of them has become the libel capital of the world.

Lord Faulks: My Lords, I understand what is behind these amendments and of course I share the desire of other noble Lords that matters should be settled or litigation avoided if that is at all possible. My noble friend Lord Mawhinney said that his committee on the whole eschewed recommendations for case management. However, by this amendment he seeks to go into that area.

A word of caution might be appropriate. There is always a danger if you set up a series of procedures to be undertaken because you will frontload costs and increase the overall bill of litigation. Although I accept what my noble friend Lord Lester said about the libel Bar and its propensity to make rather arcane rules on pleading, for example, there are specialist libel judges who are well aware of all the issues, and defendants and claimants regularly bring matters to a judge at an early stage for determination in order to serve their clients well.

I do not think that we should proceed on the basis that this is an entirely unco-ordinated, inelegant process. No doubt, improvements can be made, as the Minister will tell us. I await with interest to hear what is suggested. But I respectfully suggest that these are rather cumbersome amendments which will not, I fear, achieve what they intend to do.

Lord May of Oxford: I commend very highly subsections (5)(c) and (d) of the new clause proposed under Amendment 7. This is the first mention that I have come across—although I have not read every word—of “public interest”. As many noble Lords will know, there has been a lot of pressure from many sectors of the outside community that the Bill does not do enough in looking at public interest as an offsetting factor. As regards subsection (5)(c), I wonder whether the words “complained of” are “a statement of fact or opinion”. If they are a statement of fact, it seems to me that, defamatory or not, or financially injurious or not, a fact is a fact and no one should be liable for stating a fact. Yet—I am becoming parrot-like in repeating again and again—I can give many examples where people have had huge pressure on their time and been put to ludicrous expense in defending a matter of fact. I hugely welcome those two proposals.

Lord McNally: My Lords, again, I want to be able to think about and to look at the arguments that have been deployed. As I have said, I am not so experienced

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in the law as to know where this balance is, particularly on case management. I know that the Select Committee and a lot of the evidence given by individuals and organisations as this Bill progressed emphasised that good case management was part of the key to dealing with early resolution and the problem of cost. Whether it is wise or even proper to try to write these matters into an Act of Parliament rather than trust the judiciary to deal with these matters, certainly I look forward to a meeting with the Master of the Rolls early in the new year and to talk to others about this.

In the mean time, let me put on record the responses to these two amendments. Amendment 5 would make it compulsory for the parties to use a form of alternative dispute resolution before a defamation claim could come before the court. The Government are firmly committed to reducing the costs of defamation proceedings and to resolving legal disputes by techniques other than litigation wherever possible. The overriding objective of the Civil Procedure Rules puts the onus on courts to encourage and facilitate the use of alternative dispute resolution, and the Pre-action Protocol for Defamation already requires parties to consider some form of alternative dispute resolution, including mediation or early neutral evaluation.

6.45 pm

However, we believe that it would not be appropriate to compel parties to do this before they can bring a claim. Voluntary participation means that the parties approach mediation or neutral evaluation in a positive, conciliatory manner, rather than from an adversarial stance. There may clearly be cases in which the use of a form of ADR can assist in resolving key issues or, indeed, the claim in its entirety. However, there will equally be other cases where there is no real basis for a settlement to be reached by this means. All that simply adds to costs and delays.

We have committed to introducing costs protection in defamation proceedings, and the Civil Justice Council is currently considering how this can operate most effectively. This will help both claimants and defendants of limited means to bring and defend claims in which there is an inequality of arms. There are also the changes to the Civil Procedure Rules which we propose to enable key decisions on issues such as meaning at as early a stage as possible, once proceedings are commenced.

Amendment 7 has a similar effect to Amendment 5, in that it requires some form of alternative dispute resolution to be used, by providing that voluntary arbitration should be sought if mediation or neutral evaluation is deemed to be unsuccessful. As I have indicated, we do not consider that forcing the parties to use ADR is the right approach.

The proposed new clause would also prescribe in statute a list of key issues that the court may decide if the claim has not been settled by ADR. These substantially reflect the issues that we intend to include in rule changes to enable early resolution, together with some additions. This amendment is unnecessary because provisions governing the new procedure can perfectly adequately be addressed through amendments to the Civil Procedure Rules. As we have indicated in the update note that we have provided to the House, we

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intend in the new year to seek the agreement of the Civil Procedure Rule Committee to these changes, and the Master of the Rolls has indicated that he is content for us to do this.

Taken together, the package of measures that are in train will ensure that costs in defamation proceedings are reduced and that parties are able to secure effective access to justice. On that basis, I hope that noble Lords will withdraw or not move their amendments.

Lord Triesman: My Lords, I was loath to interrupt the Minister while he was in full flow, but if I have understood properly the point that he made, there is an unwillingness on the part of the Government to try and compel anyone to go through any other process if that person concludes that the only process they really want to go through is testing the case in a court, with all the consequences. Part of the argument is that by forcing people to go through another process, it might indeed add to the costs of the entirety of the case, rather than potentially to manage and reduce those costs.

If I have understood that argument properly, have the noble Lord and the Government considered whether some independent advice could be given, as is sometimes suggested in, for example, matrimonial cases, whereby people are guided as to whether proceeding through the court is likely to be helpful or appropriate, rather than just plunging in? I suggest that that would be done at relatively minimal cost and might be significantly beneficial.

Forgive me for putting this at any length at this stage in the debate, but one of the reasons why that might be beneficial is that on occasions—and I have seen this—you find that you are dealing with people whose normal place of residence is overseas. They are not United Kingdom nationals and may, none the less, be representatives of significant pools of wealth or of large corporations. They tend to say that they may not be able to follow our legal practice particularly carefully but they have great confidence in the ability of our courts to take on cases and deal with them. By that stage, those people are then on one course, rather than another, with considerable costs, rather than otherwise—and I understand the point that has been made about management of processes in order to reduce costs. I ask the Minister and the Government to consider whether there is some way not of compelling people to take a particular course of action but to seek advice about the likelihood of one route working more successfully than another.

Lord McNally: Again, because I am not a lawyer, I will take that away and take advice on it. As regards wealthy individuals who want to test their cases before British judges, although we have been talking about judicial case management, we have a judiciary which is world renowned for its integrity and impartiality and we should not forget that. However, I will take that matter away.

Lord Faulks: Before the Minister finally sits down, I hope that I may ask him one further thing. This is something which I think arose out of Second Reading,

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and is consistent with what the noble Lord, Lord Triesman, said about trying to minimise expenditure: that is, the possibility of having these defamation actions heard in the county court as opposed to the High Court, which would automatically reduce the cost.

Lord McNally: Again, I will take that matter back. The noble Lord may be interested to know that my right honourable friend the Lord Chancellor who, like me, is not a lawyer, is much attracted by that idea. It is certainly worthy of consideration. Unfortunately, the noble Lord, Lord Hunt, is no longer in his place but if he and his colleagues come forward with some robust self-regulation for the media, mediation may well find its proper place in that area as well. A balance needs to be struck between the extent to which you can force mediation and the extent to which it can be readily available. I will certainly look at the point made by the noble Lord, Lord Triesman.

Lord Mawhinney: My Lords, I thank the Minister for putting on the record the Government’s reaction to these amendments. I understood the point made by my noble friend Lord Faulks, although I am not sure that I entirely buy it. Speaking on behalf of the committee, by putting forward these alternatives in this way we were trying to make the point that if something is on the face of the Bill it is not part of case management; it has to be done before case management actually starts. That goes back to the point that the noble Lord, Lord Triesman, made, which we had in mind: that is, the possibility of something that is a lot quicker, a lot cheaper and which can speed up a solution one way or another. My noble friend Lord Faulks is right: it could be an expensive addition. I want to encourage him to believe that it does not have to be that way. Clearly, both of us would want the “does not have to be” rather than the “might be”.

I say to my noble friend the Minister that if the problem is simply one of legal requirement, I am guessing that my colleagues on the committee would settle for early resolution, whatever the form in which it was framed in order to make it happen. The early, quicker, cheaper resolution—where cheaper does not mean inferior—was sought by the committee but, more importantly, by all those who gave evidence to the committee. When my noble friend gives definitive responses to some of these issues on Report, I hope that he will bear in mind the perhaps totally unfair perception which might linger that it is more important to the Government not to do anything that might cause even a tremor in the judiciary than to look for positive ways to solve the real problems to which he committed himself. Because I believe that he has committed himself to those real problems, I beg leave to withdraw the amendment.

Amendment 5 withdrawn.

Lord Browne of Ladyton: My Lords, I beg to move. This amendment follows very closely the wording of the draft Bill of the noble Lord, Lord Lester of Herne Hill, concerning a similar clause. I am confident that it

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will at least pass the test of being a clause that ought to be on the face of the Bill and that it does not contravene the rule we are applying to ourselves that we should not legislate for case management. The purpose of moving this amendment is to complement the stiffer or changed test that we have discussed in relation to Clause 1; this same purpose was served when an identical amendment was moved in the House of Commons. In that sense the test itself will not serve the purpose that we all seek unless it can be applied early in the proceedings. If it is obvious that the claim being made cannot meet the test, the action can be struck out. In my view, with which I think the Government agree, an effective strike-out procedure is necessary to ensure that trivial and vexatious claims are struck out at the earliest possible opportunity.

We seek to put this procedure into the Bill because in this legislation we are seeking to make the law as clear as it possibly can be for the ordinary citizen. We seek to encourage those who are not legally qualified with the assurance that if there is utter merit in their position, they will be able to resist an action brought against them by having recourse to a strike-out procedure at an early stage of their engagement in legal proceedings. The amendment therefore seeks to add a strike-out provision to Clause 1 by means of a new clause that would imposes a duty on the court to strike out an action if it does not satisfy the serious harm test in Clause 1. It would allow the court to do that either of its own accord or on the application of a party. I note from the annexes and the letter dated 10 December 2012 that the Government themselves seek to create a series of opportunities in which a case can be struck out on the application of a party, or at a later stage in the process by the court of its own accord. To that degree, we are not entirely in sync, but we are in agreement.

When this point was raised in the House of Commons, the Minister said that the Government’s position was that they did not consider a provision for strike-out to be necessary. I anticipate that the Minister will respond that it is the intention of the Government to revisit the normal rules, in particular Rule 3.4, which is the rule that is referred to in the noble Lord’s letter. It is our firm belief on these Benches that this of itself will not and cannot be guaranteed to be sufficient. Putting this provision in the Bill will not in any way undermine the ability of the rule to be applied, but there is a distinct difference between what the Minister and the Government seek and what we on these Benches seek. The existing rule says that the court may strike out the claim. This provision would require the court to strike out the claim.

7 pm

For the most part we have adopted the analysis, workings and suggestions of others and have applied them to the Bill on the basis that they will send a strong message and provide significant reassurance to those people who we seek to reassure by the revision of this legislation. Before sitting down, I would remind the Minister of a conversation in which Members on our Benches argued with him. I am glad that we seem at least to have contributed to the Government’s change

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of mind; namely, that the use of the county courts may be part of the answer to this problem. If some of the work we have commissioned bears fruit, and we can expose that work to the Committee, we may seek to amend the Bill at a later stage. Perhaps this is an issue that we can discuss as we have a little time between the beginning and the end of the Committee stage. We should look at whether we can make common cause on this issue, given that we have been told that the present Lord Chancellor favours this sort of development too.

The Deputy Chairman of Committees (Lord Geddes): Somewhat unusually, the noble Lord begged to move his amendment at the beginning rather than the end of his words. However, I am prepared to take it that he does wish to move his amendment.

Lord Lester of Herne Hill: My Lords, it is true that my Bill had a similar provision in it, but it did not have a serious harm test. The big difference is that the Government’s Bill now has Clause 1. Therefore, one of the problems with the amendment is that it does not take account of the shift from my Bill, without a serious harm test, to what we now have. The second problem is that there is a right of access to justice guaranteed by Article 6 of the European Convention on Human Rights, and therefore we have to be extremely careful that we do not fetter that right with an excessive strike-out power. Probably that is not the most significant problem because the third problem concerns EU law and the Lugano convention. If noble Lords look at Clause 9, they will see that there is complicated stuff about:

“Action against a person not domiciled in the UK or a Member State etc”.

One of the problems—luckily I do not have to deal with this because the Minister will have behind him a whole battery of those who can—is that under EU law, one has to make sure that there is access to justice in this country in the defamation field, and that is because of a case of Shevill. As a result of that case, the European Court of Justice has made it clear that one must be able to bring one’s cause of action in defamation here in respect of a tort that has been committed elsewhere within the EU. Without making too much of a meal of it, I do not think the way that this is worded would pass muster under the Shevill test, and in any case it is not necessary because of the substantial serious harm test coupled with proper case management. Finally, the idea of the county court is something that I have always espoused. I do not think that needs much on the face of the Bill, but that is for another day.

Lord Mawhinney: I shall read out a short excerpt from our report. Paragraph 87 states:

“Once our proposals for clarifying and simplifying the law are implemented, with jury trials in libel cases a rarity, and streamlined procedures that encourage early resolution, we see no reason why many smaller defamation cases should not be heard in county courts … with some appropriate training, we see no reason why there could not be a county court judge designated to hear defamation cases in most major county court centres in the regions”.

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Lord McNally: My Lords, I may have been rather hasty in saying that the Lord Chancellor is in favour of county courts, but I am going to rush back to the MoJ and tell him to get it on the record quick because there seems to be so much support for them. It is an interesting point and again I can see the value in the recommendation as just read out by my noble friend Lord Mawhinney. Along with other matters, I will ponder on it. I did not say that we could not legislate for case management, but I want to hear the arguments. As for my noble friend’s suggestion that the Lord Chancellor might be afraid of doing this because of a fear of offending the judiciary, that is not something I have heard said about the Lord Chancellor very often in recent weeks.

Amendment 6 deals with the issue of strike-out. It would put a new strike-out power into the Bill that would require the courts to strike out actions that do not meet a certain threshold unless the interests of justice require otherwise. We do not consider that there is any need for this provision. As I indicated when responding to Amendment 3, the serious harm test in Clause 1 and the new early resolution procedures will ensure that the court has at the forefront of its mind the need to make sure that trivial and unfounded claims do not proceed. As the noble Lord, Lord Browne, anticipated, I will also argue that the courts already have a power in Rule 3.4 of the Civil Procedure Rules which permits them to strike out all or part of a claim where there are no reasonable grounds for bringing it or they consider it to be an abuse of process. The courts are very familiar with that power, and we have no doubt that they will use it more in defamation cases once the new higher threshold is in place. As I have said before, one of the aims of this Bill is to make the law simpler, so unnecessary duplication such as that proposed in this new clause would conflict with that aim.

As we have explained in the note recently provided to Peers, we intend to make changes through the Civil Procedure Rules to ensure that the key preliminary issues are determined at as early a stage in the proceedings as possible. Where the question of whether the claimant has suffered or is likely to suffer serious harm is in dispute, this is one of the main issues that the court could be asked to consider under the new procedure. On that basis, I hope that the noble Lord will agree to withdraw his amendment.

Lord Browne of Ladyton: My Lords, I shall do my best to get my words in the right order, something that I am learning to do every day in your Lordships’ House. I thank the Minister for a response which to a degree I anticipated when moving the amendment. I am grateful to the noble Lord, Lord Lester of Herne Hill, for complicating quite considerably my deliberations on this issue. I think I understood his point about the absence of the serious harm test in his Bill, and I know that the Government have prayed that in aid as part of the reason it is not necessary to provide for a strike-out procedure in this Bill. I shall also interrogate the Lugano Convention argument to see whether it has a significant effect on the existing rules of court that the Government are also praying in aid as part of their argument for why this is not necessary.

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I thank the Minister for the detail set out in his response, and as I have said before, I am willing to have faith in an holistic approach in our deliberations, as it has become known. If we can have some transparency in the other elements of the holistic approach and be satisfied that they will meet our collective desire to offer the opportunity for people to reach early resolution in disputes of this kind in an affordable way and in a timescale that makes sense in relation to the issues, I am content to beg leave to withdraw my amendment. However, I am sure that we will come back to this issue later, if not in the form of an amendment, at least as part of our further debate.

Amendment 6 withdrawn.

Amendments 7 and 8 not moved.

Amendment 9

Moved by Baroness Hayter of Kentish Town

9: After Clause 1, insert the following new Clause—

“Non-natural persons who perform a public or governmental function

Non-natural persons who perform a public or governmental function will not have an action in defamation, provided the statement complained of relates to that function.”

Baroness Hayter of Kentish Town: My Lords, there are good reasons for the amendment, which I think is probably one that the Minister, before he departs, is likely to agree to, even if he does not agree with our specific drafting.

The first reason draws on the Derbyshire case. While that matter concerned the propriety of certain investments made by the local authority from its superannuation fund, the House of Lords determined that a democratically elected body, including a local authority, and indeed any public authority or organ of central or local government, should be open to uninhibited public criticism and therefore should not have the right to take action for damages for defamation.

Thus, public authorities are barred from using libel by what is known as the Derbyshire principle—a precedent established in the case of Derbyshire County Council v Times Newspapers Ltd in1993, whereby a government authority cannot sue for libel. However, other authorities have sought to get out of that excuse, presumably because they were not elected. For example, the Olympic Delivery Authority appeared to be one such authority when it accused a citizen journalist of,

“serious, false and defamatory allegations”,

against it, perhaps because it was not elected.

However, elections apart, there are other good reasons why a public authority should not be able to sue. One, of course is that it is a body corporate and thus, under my earlier amendment should be debarred from such a course, unless it could show financial loss. However, that would not be possible for a public authority, given that all of us pay its levy, whether it is known as rates, the community charge or anything else. Another reason is the comparative resources of any government body compared with those of an individual—the “David and Goliath” situation that was referred to earlier.

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However, a third issue, which until recently was of central importance, given the number of services provided by local authorities, was that they were a monopoly—effectively for education, but actually for street cleaning, social care, parking, and a host of other services. Therefore, not only did any damaged reputation not dent their market, but publicity was really the only driver for improved care or access to redress because users could not take their custom elsewhere.