Leveson Inquiry

Bob Stewart Excerpts

Monday 3rd December 2012 Commons Chamber

[Mr Andy Slaughter (Hammersmith) (Lab)]

I want to talk about costs in libel, privacy and other proceedings against the press. This is not an ancillary issue, either in itself or in the context of providing an effective self-regulatory system, according to Lord Justice Leveson. It will require fresh legislation to correct the current state of the law and to give effect to the whole Leveson framework. That is something that Leveson has said, and that the Government have conceded as well.

Prior to the enactment of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, it was possible for persons grievously wronged by the press to sue using conditional fee—no win, no fee—agreements. The McCanns, the Dowlers and Christopher Jefferies used them. On the back of spurious attacks on personal injury claimaints, the Government legislated in part 2 of the LASPO Act to remove the protection from such claimants in bringing libel or privacy claims. They claimed that they were following the recommendations in Lord Justice Jackson’s report on civil litigation costs, but they were not.

Under the LASPO Act, no win, no fee is available only if the claimant’s solicitor receives their costs from the claimant’s damages, up to 25% thereof, but the damages in libel cases are now quite low—perhaps £10,000 or £20,000—and it is not possible to run a libel case on £2,000 or £4,000. Even if it were, no claimant would risk bankruptcy, as it is no longer possible since after-the-event insurance premiums became non-recoverable to insure against losing a case and paying the defendant newspapers astronomical costs.

[Bob Stewart (Beckenham) (Con)]

Could not the independent regulator give good advice to people who have clearly been wronged and, with it, some assistance with getting recompense for the hurt that they have suffered? Going to court is so expensive for normal people, and it would be really good if the independent regulator could do something to put that right.

[Mr Slaughter]

That is what Lord Justice Leveson recommends, in a rather more organised way, but he says that it must be underpinned by statute.

Going back to my previous point, I want to quote Sally Dowler, who said:

“At the outset we made clear that if we had to pay the lawyers, we could not afford to bring a claim; or if we had any risk of having to pay the other side’s costs, we couldn’t take the chance. If the proposed changes had been in place at that time we would not have made a claim. Simple as that, the News of the World would have won, because we could not afford to take them on.”

Lord Justice Jackson said that the losing claimant should be given protection in costs—so-called qualified one-way costs shifting—but the Government ignored him. The result of that has been summed up by Lord Justice Leveson, on page 1507 of his report:

“In the absence of some mechanism for cost free, expeditious access to justice, in my view, the failure to adopt the proposals suggested by Jackson LJ in relation to costs shifting will put access to justice in this type of case in real jeopardy, turning the clock back to the time when, in reality, only the very wealthy could pursue claims such as these…An arbitral arm of a new regulator could provide such a mechanism”—

this relates to the point made by the hon. Member for Beckenham (Bob Stewart)—

“ which would benefit the public and equally be cost effective for the press”.

Those matters were discussed at length in proceedings on LASPO in both Houses. Victims of phone hacking, including Lord Prescott, raised the plight of all the victims and received this response from Lord McNally:

“I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill.”—[Official Report, House of Lords, 27 March 2012; Vol. 736, c. 1332.]

Yet nothing was in the Defamation Bill when it was published. On its Second Reading in this House, my right hon. Friend the Member for Tooting (Sadiq Khan) quoted Lord McNally’s promise, and added:

“Yet I do not see those issues being dealt with anywhere in the Bill. If the Government do not bring forward proposals to address this deficiency in Committee, we will have to do so.”—[Official Report, 12 June 2012; Vol. 546, c. 196.]

Indeed, that is exactly what we did. In Committee, we offered a variety of means for restoring the position of the claimants, but each of them was rejected by the Government, using what became a mantra that was repeated at all stages of the Bill, and that has been repeated today by the Secretary of State—namely, that the Government would look at the rules on costs protection for defamation and privacy proceedings when the defamation reforms came into effect. I am going to ask the Minister what exactly that means.

First, however, let me read out what Lord Justice Leveson says about costs. This is in paragraphs 68 to 72 of the executive summary:

“The need for incentives, however, coupled with the equally important imperative of providing an improved route to justice for individuals, has led me to recommend the provision of an arbitration service that is recognised and could be taken into account by the courts as an essential component of the system…Such a system (if recognised by the court) would then make it possible to provide an incentive in relation to the costs of civil litigation. The normal rule is that the loser pays the legal costs incurred by the winner but costs recovered are never all the costs incurred and litigation is expensive not only for the loser but frequently for the winner as well. If, by declining to be a part of a regulatory system, a publisher has deprived a claimant of access to a quick, fair, low cost arbitration of the type I have proposed, the Civil Procedure Rules (governing civil litigation) could permit the court to deprive that publisher of its costs of litigation in privacy, defamation and other media cases, even if it had been successful. After all, its success could have been achieved far more cheaply for everyone. These incentives form an integral part of the recommendation, as without them it is difficult, given past practice and statements that have been made as recently as this summer, to see what would lead some in the industry to be willing to become part of what would be genuinely independent regulation. It also leads to what some will describe as the most controversial part of my recommendations. In order to give effect to the incentives that I have outlined, it is essential that there should be legislation to underpin the independent self-regulatory system and facilitate its recognition in legal processes.”

He then goes on to explain, as mentioned by other Members, what the legislation would achieve and what its purpose was. The third of his three reasons is that

“it would validate its standards code and the arbitral system sufficient to justify the benefits in law that would flow to those who subscribed”.

What that means is that, as far as Lord Justice Leveson is concerned, the costs issue is at the heart of his principles and legislation is needed for it to take effect.

I was unable to intervene on the Secretary of State, so I would like the Minister to address in his winding-up speech the question of what type of legislation—primary or secondary—the Government envisage introducing to deal with the costs issue, which they have been promising for about two years, ever since the misguided legal aid, sentencing and punishment of offenders proposals first came about. If the legislative principle is ceded in the process—as my hon. Friend the Member for Rhondda (Chris Bryant) said—there will of course be some legislation relating to regulation of the press and here is a clear example, or a central example, according to Lord Justice Leveson, providing the entry to the entire regulatory system—it is the incentive given by the arbitral system and by the cost penalties that will lead to the whole self-regulatory body operating.

If that is ceded, what problem do the Government have in ceding the concept of legislation on the other two points that Lord Justice Leveson made? The first of those is

“to protect the freedom of the press”

and the second is to

“provide an independent process to recognise the new self-regulatory body and reassure the public that the basic requirements of independence and effectiveness were met”.

At the end of the day, that is all that Opposition Members—and, indeed, from what I have heard today, many Government Members, too—are asking for. The Government are setting up straw men in order to knock the proposals down. They are colluding with the proprietors of newspapers who are talking in the most arrant and nonsensical terms about what the implications of this will be. I believe that dealing with the costs route will justify the proposals that Lord Justice Leveson has made.