Defamation Bill

Lord Mawhinney Excerpts

Monday 17th December 2012 Grand Committee

[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.

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.

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”, 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.

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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 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.

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Moved by

[Lord Mawhinney]

4: After Clause 1, insert the following new Clause—
“Requirement of substantial financial lossSubstantial 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.

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 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.

[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 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 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.

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[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 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 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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[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 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.

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.

Moved by

[Lord Mawhinney]

5: After Clause 1, insert the following new Clause—
“Requirement for action brought before courtAction 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 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.

--- Later in debate ---

[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.

--- Later in debate ---

[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”.