Defamation Bill

Lord Garnier Excerpts

Tuesday 16th April 2013 Commons Chamber

[Mrs Grant]

I have just explained that we have requested that an early resolution procedure should be looked into, and if we have an early resolution procedure, we do not need a permission stage. As I have explained, having a permission stage and an early resolution procedure would create far too much delay and cost, which is not what anyone wants. I would have thought that the shadow Minister, having been a solicitor, would know the effect that can have on claimants.

[Sir Edward Garnier (Harborough) (Con)]

rose—

[Dr Sarah Wollaston (Totnes) (Con)]

rose—

[Mrs Grant]

I would also like to make the point—I can hear that there are concerns about this issue—that I am, however, aware of the strength of feeling that exists on this matter and on whether the Bill should contain a provision requiring non-natural persons trading for profit to show substantial financial loss. As we have made clear at earlier stages in the Bill, in order to satisfy the serious harm test, such bodies are likely in practice to have to show actual or likely financial loss anyway. However, I can confirm that we are prepared to consider actively that aspect of the Lords amendment further, and we will listen carefully to the views expressed in both Houses.

[Sir Edward Garnier]

I listened with care to what the shadow Secretary of State said just now. Although it is true that clause 1 might be a retrospective application, the ordinary rules of strike-out and the ordinary rules of court that police abusive cases are not altered. If the court is faced with an abusive claim by a company, it will be dealt with. One does not need legislation to police the administration of such proceedings.

--- Later in debate ---

In addition, the Lords new clause aligns the law with the so-called Derbyshire principle. This principle rightly prevents public bodies from bringing defamation actions, and the amendment will mean that private companies delivering public functions are similarly restricted. In the original case of Derbyshire County Council v. Times Newspapers in 1993, Lord Keith of Kinkel’s judgment makes clear the importance of “uninhibited public criticism” of democratically elected and public bodies. The principle is very important, because it means that local authorities—or, indeed, any public authority or organ of central or local government—should be open to uninhibited public criticism and therefore do not have the right to make a claim for defamation for damages.

[Sir Edward Garnier]

rose—

[Sadiq Khan]

I will give two examples, and then I will give way to the hon. and learned Gentleman, as I know he has an interest in this matter.

Let us look at some of the consequences for the Ministry of Justice, the Minister’s Department. The Government amendment means that anyone, including a whistleblower, who wants to criticise the way a private company runs a prison using taxpayer money could face the threat of an action for damages, whereas he or she would not for criticising a public sector prison. This should be about protecting the reputation of the justice system, rather than big corporations. It would also mean that someone wanting to raise concerns about a danger to public safety caused by a private company managing, for example, medium risk offenders, once the Government’s plans for privatising our probation service have been implemented, would face the threat of defamation.

Do the Government really want this unlevel playing field—which the Liberal Democrats will support in about 20 minutes? I remind the House that these are private companies undertaking public functions at taxpayer expense. At a time when the Government are handing over more and more of our public services to private and voluntary groups in education, health care and crime and justice, less and less of taxpayer spend will be subject to the uninhibited public criticism Lord Keith identified as so fundamental.

[Sir Edward Garnier]

First, may I make it perfectly clear to the ignorant person who tweeted about me this afternoon that I have, in fact, declared my interest in relation to this matter on the amendment paper?

Is the right hon. Gentleman aware that in the Derbyshire county council case, while Lord Keith held that the council should not be able to sue, he confirmed that corporations should be able to sue to protect their trading reputation? The heart of the right hon. Gentleman’s argument is that this is about inequality of arms. He thinks rich, very large and hugely well-resourced companies are bullying less resourced individuals, but the same criticism could be made of immensely rich private individuals who bring claims. Robert Maxwell used his millions—perhaps they were other people’s millions—

[Mr Speaker]

Order. I am sure the hon. and learned Gentleman will have an opportunity to catch my eye and make his own speech in due course, but we do not have all that long for this debate and we have got the gist of his point.

--- Later in debate ---

[Sadiq Khan]

The hon. Gentleman might have been in the House in 1993, when Lord Keith made his judgment, but the numbers of private companies undertaking public functions in ’93 were far fewer than they are in 2013. The hon. Gentleman knows that I have huge respect for him, but if his party has its way, with the support of the Liberal Democrats, even more public services will be tendered and will be run by private companies.

Large elements of the Bill show how Parliament should legislate. Political consensus on the overarching need to reform followed by detailed, expert debate on the substance in both Houses, all informed by a dedicated set of campaigners and non-governmental organisations, has helped to turn the original substandard Bill into a better set of proposals. I hope that today the House will agree with us one more time on the importance of retaining the key changes made to the Bill in the Lords. Do you know what? Defamation Bills do not come around very often—this is only the third since 1853. We must grasp the opportunity and deliver the modern, updated defamation laws warranted by our tradition of open and free speech.

[Sir Edward Garnier]

There have been three defamation Bills in my lifetime; I do not know whether that helps the right hon. Member for Tooting (Sadiq Khan)—

[Sadiq Khan]

It shows how old you are.

[Sir Edward Garnier]

It does, and perhaps the right hon. Gentleman will allow me to—

[Mr Speaker]

Order. May I point out that I think the hon. and learned Gentleman was born not in 1853 but, if memory serves me, in 1952?

[Sir Edward Garnier]

On 26 October, and I share a birthday with President Mitterrand and Hillary Clinton. Let us move on, however.

I have already declared my interest, so I hope I do not have to do so again. I want to say that this is not a question of being right or wrong. I am not saying that I am right, that my hon. Friend the Minister is right or that the right hon. Member for Tooting is wrong, but that this is a matter of judgment and opinion. We are perfectly entitled to have different views about how best to order the law on defamation.

It so happens that the right hon. Gentleman and I take a different view on Lords amendment 2 on non-natural persons. I happen to think that Lord Bingham was right in the Jameel case in 2007 to make it quite clear that he thought it was perfectly proper and right for corporations to be able to bring actions for libel without proof of special damage—without having to show money loss. I will not recite all that he said, as there is not enough time, but it is worth bearing it in mind when some of the more hyperbolic accusations are traded about companies that bring actions for libel to terrorise or use their financial muscle to inhibit the defence of those actions or to inhibit free speech.

[Dr Huppert]

Does the hon. and learned Gentleman accept that there is a fundamental difference between non-natural persons and natural persons in terms of aspects to do with feelings, for example? Corporations of any size cannot have feelings that can hurt by defamatory action; there is a fundamental difference that the law should reflect.

[Sir Edward Garnier]

That is not only fundamental; it is highly uncontroversial. Human beings can get damages for hurt to their feelings; companies cannot. One cannot libel a company by accusing it, for example, of adultery, whereas one can so libel an individual. There are plenty of obvious and not very surprising differences between the law relating to individuals and the law relating to companies, but there are examples of things which affect companies’ trading reputations, which should be susceptible to protection.

We should also bear it in mind that there are different types of company. There are not-for-profit companies which are not in the business of making money and which, if they were libelled, would not lose money. It may well be said in response to me that the amendment deals with that. They would get permission from the court to bring that action, but that just creates another hurdle, as the Under-Secretary of State for Justice, my hon. Friend the Member for Maidstone and The Weald (Mrs Grant), made clear.

[Sir Peter Bottomley]

I would be grateful if my hon. and learned Friend could advise briefly on two points. First, at which stage should the courts have said, “We are not going to go further with the claim against Dr Simon Singh or against Dr Peter Wilmshurst”? Secondly, with reference to loss, in 1950 two doctors said that tobacco is very bad for people’s health and asbestos is very bad for people’s lungs. That was not the general view. It was an insight, and the companies involved in selling tobacco and selling asbestos could have sued for loss. That should have been struck out as well. There should be no libel for such cases. How would my hon. and learned Friend stop that kind of thing without the proposed new clause?

[Sir Edward Garnier]

I shall not unwind the case of Singh or the Wilmshurst case; they have been before the courts and have been dealt with. As it happens, the case of Simon Singh became controversial because it was an argument about whether the words complained of constituted allegations of fact or whether they were capable of constituting comment. That is the point on which it went to the Court of Appeal.

There was an action in South Africa brought by a tobacco company which sued and recovered damages on the allegation that its products promoted cancer. Things change. That is the advantage of having an organic system of law which enables the courts to deal with evidence and reach conclusions about whether a company or anyone else has been attacked inappropriately.

As I was saying to the hon. Member for Cambridge (Dr Huppert), it is not all that hard to think of statements which seriously injure the general commercial reputation of trading and charitable organisations. An arms company—

[Dr Huppert]

Will the hon. and learned Gentleman give way?

[Sir Edward Garnier]

If the hon. Gentleman will forgive me, this debate stops at 7.13 pm.

Arms companies can be accused of bribing foreign officials. Oil companies can be accused of damaging the environment. International humanitarian agencies can be accused of wrongfully succumbing to Government pressure. Retailers can be accused of exploiting child labour, and so on. As the right hon. Member for Tooting said, the directors or the leading members of those companies may also have a parallel course of action, but the company itself should not be shut out from pursuing a course of action if that is available to it.

The good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even of its own staff and make people less ready to deal with it and less willing or less proud to work for it. If that were not so, corporations would not go to the lengths they do to protect and burnish their corporate images. There is nothing repugnant in the notion that this is a value which the law should protect, and it is not an adequate answer that the corporation can itself seek to answer the defamatory statement through press releases or public statements, as protestations of innocence by the impugned party necessarily carry less weight with the public than the prompt issue of proceedings which culminate in a favourable verdict by a judge or a jury.

Furthermore, why should one have to accept that a publication, if truly damaging to a corporation’s commercial reputation, will result in provable financial loss, since the more prompt and public a company’s issuing of proceedings, and the more diligent its pursuit of a claim, the less the chance that financial loss will actually accrue? It may be argued against me that all these matters will be dealt with in the permission hearing, but when is the permission hearing to take place? Will the corporation have to wait right until the end of the limitation period? Will it have to wait for weeks and weeks while the next set of accounts comes out, so that it can work out whether financial loss has occurred as a consequence of the libel? There might be any number of causes of a company suffering an economic downturn, particularly in a recession.

I return to the point I made about not-for-profit companies and charities.

[Dr Huppert]

Has the hon. and learned Gentleman seen that the amendment that I hope the Government will bring forward specifically refers to trading-for-profit organisations, as the Joint Committee recommended? It specifically excludes charities.

[Sir Edward Garnier]

I am discussing the amendment to the Bill, not the one somewhere else that the hon. Gentleman was happy to talk about.

I agree with my hon. Friend the Minister in relation to subsection (4) of the new clause proposed in Lords amendment 2. It seems to me that procedurally we can only deal with the amendment as one; we cannot chop and change it. Subsection (4) states:

“Non-natural persons performing a public function do not have an action in defamation in relation to a statement concerning that function.”

It seems to me that the common law, as expressed through Derbyshire, is there. If we legislate, we will create sclerosis. Indeed, I think that there are some disadvantages in legislating to put the Reynolds defence into statute. We will no doubt make lots of work for our learned friends, but we will make the process of amending the law of libel, particularly in relation to public interest statements, all the more difficult as we lock it down into statute.

I urge the House to think carefully before deciding on whether to agree to their lordships’ amendment. I urge Members to give my hon. Friend the Minister and the Government the time and space to get this right with mature consideration and not to be seduced by the siren calls of the pressure groups, no matter how well motivated they might be, into producing what would be a deleterious and damaging end to this affair.

[Paul Farrelly]

I wish to speak briefly to Lords amendment 2, which would be a major change to the Bill, and to amendment (a) to Lords amendment 3, which stands in my name and that of the hon. Member for Worthing West (Sir Peter Bottomley). I will curtail my remarks, because I want to give other Members the opportunity to speak.

Lords amendment 2 would be a major change. The issue here is not just about big corporations wanting to bully and intimidate the little people, as McDonalds did years ago, simply because they can. The Culture, Media and Sport Committee’s report highlighted a more recent case of almost flagrant abuse of our libel laws by a large corporation: Tesco’s libel action against The Guardian—some people’s favourite paper, and some people’s hate paper—in 2008. We can generalise from that case.

It has recently been in vogue to condemn aggressive and widespread tax avoidance, and that was what The Guardian story was all about. It made a mistake in that story and referred to the wrong tax. It turned out that Tesco was avoiding not only the wrong tax but the tax that it said it was not avoiding. The Guardian, as any newspaper would, apologised, made a clarification and offers of amends and ensured that it used all the procedures of the law, as set down the last time this House looked at reform of libel law, but Tesco was just not interested.

The reason Tesco turned everything down, stalled for time and racked up the costs was not just that it could, but that it, like so many corporations, wanted to chill. It wanted to take the newspaper and its journalists out of the game. It wanted to send a message. The Guardian—it could have been any newspaper—faced a bill of up to £5 million if the case went all the way to the House of Lords, or now to the Supreme Court, because the issue in libel is cost, not damages, so it settled for a nominal sum. The costs were massive.

Lords amendment 2 would have cross-party support not only in the Lords but here, if Members had a free vote. The only people who oppose it are those organisations that like to chill and those firms that make massive amounts of money out of the libel industry. The amendment would not stop companies suing; it just asks that they demonstrate significant damage when they can fight back by other means.

The Lords amendment also asks that the court approve a writ. Currently people can just go to court, a writ is rubber-stamped and then one is obliged to spend one’s time and money fighting it. The refusal of Rachel Ehrenfeld, an American, to go thorough that procedure led to the Americans introducing their laws to stop our libel judgments being enforced in the United States.

[Sir Edward Garnier]

I ask the hon. Gentleman to have a look at new clause 2(3), which says:

“The court must strike out an application under subsection (2) unless the body corporate can show that the publication of the words or matters complained of has caused, or is likely to cause, substantial financial loss”.

What happens to a charity or non-profit-making company that is not in the business of making a financial gain or a financial loss if it is defamed? The case would have to be struck out under the clause.

[Paul Farrelly]

The hon. and learned Gentleman has forgotten that the proposal does not apply to non-profit-making organisations.

This is the only part of the Bill, until we see the civil procedure rules, that provides for early strike-out. That would have helped Peter Wilmshurst, sued by NMT, who could not ultimately pay the bills that he had racked up, leaving aside the worry for his family in putting everything on the line. The amendment would get around the distinction drawn in the Simon Singh case—the artificial discrimination between corporate bodies and non-incorporated bodies that allowed the British Chiropractic Association to sue him in the first instance.

The Lords amendment is sensible and proportionate. It would not prevent individuals in companies, particularly private companies, from suing if they felt defamed by an article that attacked their company. It would also, as the hon. Member for Worthing West said, extend the Derbyshire principle to contracted-out firms where they are providing public functions—Atos, for example. In short, it keeps up with the times.

I put my name to Lords amendment 3, tabled by the hon. Member for Worthing West, partly, again, on the grounds of reducing costs. Beliefs are very subjective and decisions are more objective if the courts interpret them sensibly. I also wanted to tease out from the Government why, having rejected all our concerns in the Bill Committee about having another tick list, as the Reynolds defence had proved so costly, they had so radically changed their mind. The Minister has not elucidated that. However, by virtue of the fact that the matter was uncontested in the Lords, I am happy that a court can consider all circumstances of the case. I hope that in a spirit of cross-party truce, my colleague the hon. Member for Worthing West will speak to his amendment.

[Dr Huppert]

It is a pleasure to follow the hon. Member for Worthing West (Sir Peter Bottomley), with whom I have had many promising discussions on the issue. I am delighted that the Bill is back in the Commons. There was a period when, due to the actions of the Labour peer Lord Puttnam, there was a risk. I am glad that that risk did not eventualise and that it turned out not to be a problem.

This Bill will make a significant change to the costs of libel and to free speech and it will reduce libel tourism. I am particularly pleased about clause 6, which provides specific protection for peer-reviewed academic and scientific publications. That is something that I value greatly and I am delighted that we will be able to make those protections, because we have heard of too many cases of learned journals being silenced.

The issue remains, however, of corporations and non-natural persons. As I argued earlier, they are different. They do not have feelings. They are categorically separate and there should be different rules for what happens when they wish to bring libel actions. Significantly, we have heard that they can abuse power, as in the cases of Peter Wilmshurst and Simon Singh. I was going to talk more about them, but a number of speeches have covered them.

There is, largely, cross-party agreement, with the notable exception of the hon. and learned Member for Harborough (Sir Edward Garnier).

[Sir Edward Garnier]

Does the hon. Gentleman accept that “a body corporate” in subsection (1)(a) of the new clause proposed by Lords amendment 2 does not restrict it to money-making corporations?

[Dr Huppert]

The hon. and learned Gentleman is correct. I understand that that is the intention and that is what was recommended. I eagerly anticipate a Government amendment and hope that it will address that issue. None of us wants to put constraints on charities. This relates to profitable or profit-making organisations, or at least those that are trying to make a profit.

I heard the Minister make a commitment to actively consider such amendments. My understanding is—I am still new to parliamentary procedure—that that is as far as a Minister is able to go at this stage. I would be grateful if it was not her intention to set high expectations for such an amendment being tabled in the Lords. She is welcome to clarify the issue now; otherwise, I am very happy with what she said and look forward to the amendment.

We will get cross-party agreement on corporations having to prove that they have suffered serious financial harm. Simon Singh has correctly said that that would have saved him. Such a provision is still missing from the Bill, but I believe that the Government have now said that they will address it. I trust the Government on that and I look forward to the amendment and to the Bill finally changing.

As John Kampfner, the former chief executive of Index on Censorship, said:

“When we launched the Libel Reform Campaign in 2009, only the Liberal Democrats backed change. Now the cause has cross party support.”

I look forward to seeing this Bill become an Act.