Defamation Bill

Lord Lester of Herne Hill Excerpts

Tuesday 23rd April 2013 Lords Chamber

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, Amendments 1, 15 and 16 constitute a partial enactment in statute of a number of the recommendations made by Lord Justice Leveson in his report on the culture, practices and ethics of the press. The reasons given by the other place for disagreeing with these amendments reflect the fact that, as the House will be aware, on 18 March cross-party talks were resolved successfully and a draft royal charter was agreed as the vehicle by which the recognition body should be set up.

Detailed criteria by which self-regulators would be assessed were also agreed, and provisions to enact Lord Justice Leveson’s recommendations on incentives in costs and exemplary damages have subsequently been included in the Crime and Courts Bill. A further “no change” clause has also been included in the Enterprise and Regulatory Reform Bill as a safeguard against political intervention with the royal charter. These measures have cross-party support.

I take this opportunity to address an issue that I know is of concern to the noble Lord, Lord Puttnam, on how provisions are being taken forward to provide access to justice and cost protection for those of limited means. It may be helpful to provide the House with an update on the action we are taking. As noble Lords are aware, we asked the Civil Justice Council to report on the issue of cost protection by the end of March. It has done so, and recommended that the regime of qualified one-way cost shifting, or QOCS, should be adapted to defamation and privacy cases. A number of adaptations are necessary, given the rather different nature and variety of defamation and privacy proceedings compared with personal injury claims. We are now considering the CJC report, and as your Lordships will appreciate this is quite a complex area. While the report does not represent a blueprint of the new rules to be applied, it does set out the issues that need to be addressed, and makes recommendations on how to address them.

It will be for the Civil Procedure Rule Committee to make the rules on costs protection in due course, once the Government have set out the way forward. My officials will work with the Committee on this. I am conscious that the CJC has not consulted on this issue, and I believe that we need to consult before we finalise the proposals. Our aim is therefore to work with the Rule Committee in drafting appropriate rules, perhaps with alternatives, on which we can consult more widely over the summer.

I know that the noble Lord, Lord Puttnam, will be interested in that consultation, and I will ensure that he and other noble Lords with an interest in this area are included in the consultation. Depending on the outcome of that consultation, we then aim to implement a costs protection regime later in the year.

I hope that provides reassurances to the noble Lord, Lord Puttnam, and to others, about the promises I have made about cost protection at various stages of the Bill. During our debate on the Crime and Courts Bill provisions on 25 March, both the noble Lord, Lord Puttnam, and the noble and learned Lord, Lord Mackay of Clashfern, indicated that they were happy for the Bill to complete its passage without Amendments 1, 15 and 16. I hope that remains the case, and that noble Lords will agree to the removal of these amendments. I beg to move.

[Lord Lester of Herne Hill]

My Lords, first I would say that we often refer to Fox’s Libel Act. I hope that when this Bill becomes law it will be referred to as Lord McNally’s Libel Act, because he above all has had the energy to drive it forward. He said at one stage that he would not allow the Bill to be overwhelmed by what he called the tsunami of Leveson. The reason why I strongly support Motion A is because it provides a way of avoiding being overwhelmed by the tsunami of Leveson. It removes what I consider to be unnecessary hostage-taking in some amendments to the Defamation Bill. It has now been freed in the Commons, and therefore I strongly support it. I have some difficulty with the reason, in a sense, because it says that,

“the draft Royal Charter … and … the Crime and Courts Bill and the Enterprise and Regulatory Reform Bill will be sufficient to implement the recommendations in Lord Justice Leveson’s report”.

I think that is completely true. Whether Lord Justice Leveson’s report will eventually pass muster is quite another question, but that is not to be debated now.

[Lord Mackay of Clashfern]

My Lords, I am delighted to welcome this situation, and to see the Defamation Bill back on its ordinary course. I do not entirely agree with all that the noble Lord, Lord Lester of Herne Hill, has said about the amendments that were passed by this House, but now they are certainly unnecessary and I am delighted that the Defamation Bill can proceed.

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[Lord May of Oxford]

I wish to make a few remarks which may embarrassingly reveal my lack of full acquaintance with the legal arcana in this case but at the same time remind us of at least one of the major reasons why we are having these discussions. I thank the noble Lord, Lord McNally, for doing a good job extremely conscientiously in complicated circumstances with a lot of opinions swirling round him.

I remind noble Lords yet again of what prompted this action in the first place: libel tourism to this country to shut up people who wish to point out instances of malpractice in pharmaceutical companies in a variety of contexts. I come mainly from the science base, where there are interminable examples, about which I could go on for hours. I will inflict one example on your Lordships and then I will speak more briefly. It is a typical example, which raises many of the issues that still concern me despite the good job that is being done. It comes from a chap called Peter Wilmshurst, who wrote to me in an e-mail:

“I am a consultant cardiologist in Shrewsbury. A US medical device corporation, NMT Medical, sued me for libel and slander three times in the High Court in England. I was the principal cardiologist in research, which was conducted on UK citizens and used a cardiac device made by NMT. At a medical conference in the USA, I expressed concern about the findings of the research and some of my comments were reported on a US cardiology website. As a result NMT sued me in England over the website article and a subsequent article. The journalist and the website were not sued. When I spoke about what happened on the Today programme on Radio 4 I was sued again, despite the interview being pre-recorded so that the BBC’s lawyers could make sure that there was no risk of further litigation. NMT did not sue the BBC. Everything that I said was provably true, but that did not prevent NMT starting expensive claims with the expectation that the cost would stop me expressing concerns about the lack of safety and lack of efficacy of their device. I know that fear of being sued by NMT prevented other doctors expressing similar concerns. The libel cases lasted almost 4 years and my legal costs were £300,000”—

which is actually low compared to some of the incidents in mind. The journal Nature, for example, spent £1.5 million successfully defending one of these libel cases.

Peter Wilmshurst continued:

“The cases ended when NMT went into liquidation as information about the problems with their devices filtered out and cardiologists stopped using them”—

something I will come back to. He continued:

“During the years when NMT silenced doctors who had legitimate concerns, the ineffective and unsafe devices were implanted in patients in the UK and elsewhere. Some patients needed urgent cardiac surgery to have devices removed and some died. That was the true cost of the English defamation laws having no adequate public interest defence to prevent spurious claims by wealthy corporations. I believe that if Parliamentarians did not have absolute privilege when speaking in Parliament”—

and that is a comfort I have here, having once been silenced in a cowardly way—

“and they had only the same protections as ordinary citizens, they would ensure that there was an adequate public interest defence and protection from corporations using the defamation laws to silence whistleblowers and prevent freedom of expression”.

We did that way back.

I mention that example in particular because, as noble Lords will notice, the original action was effective. Ultimately, it caused this company to go bust. One of the amendments we are talking about asks for a way of preventing this sort of bludgeoning of people into silence by the power of the purse and the extraordinary extravagance of our legal procedures. It comes home to us very clearly that simply saying that a company must prove you are damaging them by what you are saying is not going to prevent many of these cases because the aim of what many people are saying when they provoke these actions is, indeed, to inflict damage. The aim is to point out bad and unsafe practice and unsound publications, and to damage the people responsible. I am not clear that simply saying that companies must show they are damaged would really cure the problem at all. I may be revealing my ignorance, but I wanted to say again that this is what provoked it. In what sometimes seemed to me interminable sessions in Grand Committee, in which I took a form of perverse enjoyment, the intense arcana of the legalisms occasionally seemed—to put it gently—to distract from the essence of the problem. My understanding, imperfect though it is, is that we are going a long way to addressing this problem but not all the way that, were I supreme dictator, we would go.

[Lord Lester of Herne Hill]

My Lords, I hope, in what will be a short speech, to deal with all the amendments together. In answer to the point just raised by the noble Lord, Lord May, corporations are not the same as private individuals. They cannot have hurt feelings but they can be seriously damaged by defamatory statements. I therefore share the view of many courts across the world that corporations should be able to bring libel proceedings but on certain conditions. The short answer to Dr Wilmshurst is that we now have, in what will be Clause 4, a public interest defence which, quite apart from the other provisions in his favour, he would be able to rely upon.

I begin by dealing with the question of damages. I do not want to crow about it, but it was actually in my own Private Member’s Bill that I required corporate bodies to have to prove the likelihood of financial loss or actual financial loss. That was commended by the Joint Committee on the draft Bill and by the Joint Committee on Human Rights on which I serve and, as a member, was able to inform its report. I think that the Government have made an important concession and I am delighted that the Opposition have recognised that and, indeed, have called for it themselves. It is, of course, extremely important that corporations are able to bring libel proceedings but, as I say, are able to do so if they are trading corporations by proving serious financial loss or the likelihood of serious financial loss.

All of that is now common ground, and what is left are the two important issues of the Derbyshire principle and the notion of a special procedural step to be taken, which is set out in Amendment 2D. It requires the permission of the court before a trading corporation can sue. I am persuaded by my noble friend Lord McNally’s way of dealing with that. It is a procedural point that will be dealt with by the early resolution procedure and by proper case management. It does not require a rigid rule to be inserted into the Bill, and therefore I would not support Amendment 2D.

What, then, about the Derbyshire principle? The House has the benefit of having as a Member of the House of Lords the judge who decided Derbyshire when he was even younger than he now is, my noble and learned kinsman Lord Woolf of Barnes, and I am sure that he will correct anything I am about to say. I want to say something about Derbyshire because I think that it has been misunderstood. It has been misunderstood by the Government because they seem to think that if one were to codify—I am now against codifying for a reason I shall come to—that would be in some way rigid and inflexible because it would prevent a body exercising functions of a public nature being able to vindicate its reputation. That is wrong because, as the Derbyshire case establishes and makes clear, unlike the position in the United States where no one can sue to vindicate the reputation of a government body, it is always open to a body exercising public functions through its officers or any individual who is defamed to bring their own defamation proceedings. It also makes it perfectly clear through Lord Keith of Kinkel in his speech for the House of Lords that there is also the tort of malicious falsehood. This means that if a government body can prove bad faith or reckless disregard for the truth, it can also bring proceedings. The Government are therefore mistaken in thinking that to codify in the way that the Opposition wish to do—with my support the last time round—would create a rigid and inflexible position. That is not so, but the question is whether we were right last time to try to codify the principle.

Since then, something has happened which has caused me to think again. It is the situation in Northern Ireland, and I hope very much that the noble Lord, Lord Bew, will say something about it. Since the last occasion, the governing authorities in Northern Ireland have decided in their wisdom that the Defamation Bill should not apply to the Province. NGOs, newspapers, broadcasters and citizen critics often convey information and ideas which are not confined to any particular part of the United Kingdom but extend to the whole of it.

What troubles me about codification is not what troubles the Government. What troubles me is that, were we to codify in the way that is now suggested, in Northern Ireland, Mr Paul Tweed, in particular, who is the king of libel suits in that part of the United Kingdom, would argue, “This is codified in England and Wales but it is common law in Northern Ireland and the way in which it is codified suggests that Parliament had serious doubts about what Derbyshire meant. Now we are going to seek to apply a narrower view than Derbyshire itself”. That has made me think about the whole issue in this context of codification versus common law.

--- Later in debate ---

Again, this is rather like trying to establish a border between private and public. Throughout this, and as the law develops even after this Bill becomes an Act, we will find that balance in protecting against the bullying to which my noble friend Lord Phillips and others referred, between does it take place and it should not take place. With regard to corporate reputation, it is disgusting and disgraceful of large corporations to use those kind of tactics. But there will always be the question of how we protect against bullying. How do we recognise the points that my noble friend Lord Faulks makes, that there is a real value to the loss of reputation that has to be recognised as well? As he rightly says, and as I explained in my remarks, the courts are already, to use his phrase, patrolling the borders of Derbyshire. As I said in introducing this, the Derbyshire principle was established before the passage of the Human Rights Act. The issue of whether it would extend to a body falling within the definition of a public authority under Section 6 of the Act is not one that is being tested before the courts. It is therefore not possible to predict the view the courts would take were this issue to be raised.

[Lord Lester of Herne Hill]

I am grateful to my noble friend. Although my noble friend is not a lawyer, and has the great advantage of not being a lawyer, would he agree with me as a matter of common sense, that it cannot make the slightest difference whether it is the prison department or a private contractor managing the prison so far as the Derbyshire principle is concerned, because the Human Rights Act makes that quite clear?

[Lord McNally]

I have no doubt that my noble friend is right. What I would prefer to do, as we have been arguing throughout this, is to leave that matter to a judge and a court, when it comes before it. Where I do think there is a relevant question—not that my noble friend’s question was not relevant, it is just that I did not want to answer it—is on the question of charities. I can confirm to my noble friend Lord Phillips that it is not our intention to catch charities. We think that it is very unlikely that a court would find that a charity was a body trading for profit. There is a clear distinction between trading for profit and simply making a profit to reinvest as part of the more general purposes of the organisation. I hope that will give comfort to my noble friend.

He was another one that was concerned about bullying, and I have just made the point about balancing. I was pleased to hear about Bill McNally, not least that he was a successful poacher.

The points made by the noble Lords, Lord Bew and Lord Lester, about Northern Ireland are worrying, and I will take up the point about whether there can be some cross-party demarche to our fellow parliamentarians in the Northern Ireland Assembly, because it would be a great pity if Northern Ireland were to be out of step on this.

I understand why I am being asked to make definitions. However, the fault lines are moving and we will have to trust the courts with this strengthened Bill for them to make the right decision in this area. I take the point made by the noble Lord, which is very valid. Although I and Parliament have made clear our desire for a direction of travel here, there is a danger that the Derbyshire principle may be eroded because of this new configuration. However, trying to put the Derbyshire principle into statute at this time is not the way forward. The common law can be trusted to develop in the right direction. As I have said previously, no law on earth can prevent a speculatively threatening letter from a solicitor.

The Bill has been the work of many hands. If a piece of legislation were to be subject to a paternity test and DNA testing, this Bill’s DNA would be far more likely to be that of my noble friend Lord Lester than me. However, I have enjoyed—I think that that is the right word—taking the Bill through with the help of many hands and some very constructive contributions. I hope that the House’s last and most constructive contribution will be to accept the Government’s amendment and reject the amendment in the name of the noble Baroness, Lady Hayter.

[Baroness Hayter of Kentish Town]

My Lords, I am grateful to the Minister for making reference to my noble friend Lord Browne of Ladyton, who has just talked about surrogate parentage. Perhaps we can all claim a little of that. However, the contributions of the noble Lords, Lord May of Oxford, Lord Lester of Herne Hill, Lord Bew, Lord Faulks and Lord Phillips of Sudbury, and the noble Viscount, Lord Colville, actually reflected what was going on in Committee and on Report. The Minister used the tactful words, “development of thinking”; we are therefore not going to talk about u-turns, but simply welcome the development of thinking behind the new government clause.

I thank the noble Lord, Lord Bew. It sounds as if Northern Ireland in itself is a bad example, let alone the suggestion that this House or Parliament should make our laws on the basis of something decided in that Province. No matter how important that Province is, that is not the right way to make our laws here.

As regards two further issues, the first was on whether permission should be sought by corporates before they start an action. I am sure that the noble Lord, Lord Lester of Herne Hill, made a slip of the tongue, for which he is not renowned, when he said that in order to bring an action, companies would have to show serious financial loss. Of course, that is not right with the Bill at the moment. Corporates do not have to show financial loss in order to bring an action, but only to succeed in one. That is the crux of the matter in terms of whether permission should be given before they are able to start an action.

[Lord Lester of Herne Hill]

I am very sorry to intervene, but Clause 1 has to be read with what we are talking about.

[Baroness Hayter of Kentish Town]

It was the word “bring”. What we are trying to say regarding permissions is that permission of the court should be required in order to bring that action. In a sense, the most effective speech about permissions was, of course, made not by me but by the noble Lord, Lord May of Oxford. He discussed the case of Wilmshurst, which involved four years, £300,000, a risk to patients and actually of course no serious case at the bottom of it, because what he said was true. That is what we are trying to get rid of.

To turn to the main issue of Derbyshire, in a sense this is quite a simple judgment. It is a judgment about whether the noble Lords, Lord Faulks, Lord Lester and Lord McNally, are right that we should leave it to the courts and to judges to decide on whether the Derbyshire principle should now apply to other organisations providing public services, or whether we as Parliament want to take that decision. My fear about leaving it to the courts is how on earth users—patients, Travellers, people who are receiving those public services, the disabled who go to Atos—are to know what their rights are if we have to wait for the court to develop the Derbyshire principles. How are parties going to know? Who will fund the test cases? What message does it give to users and patients, and indeed to journalists wanting to report their complaints, if they must wait to know what the outcome is?

[Baroness Hayter of Kentish Town]

It is interesting, but performance of public function will be under either a contract or a commission given out by the DWP or the local authority. They will be able to define that, because they do not simply stand up and say, “I am now providing a hospital”. A contract will exist with what used to be a PCT and is now a GP commissioning group. There will be a contract and it can be defined in that way. If that was the only problem and the Government wanted to concede other than on that, I would happily take that. No, the offer is not coming. I would like to conclude, if possible—

[Lord Lester of Herne Hill]

I am very grateful. The problem is that Section 6 of the Human Rights Act talks about functions of a private or public nature. That is fact-sensitive and cannot be codified, and has not been codified by Parliament in the Human Rights Act. That is why one cannot simply brush it aside and say, “Well, now Parliament must do so”, because Parliament has not done so in the Human Rights Act and cannot do so here. It has to be left to the courts to apply the test.

[Baroness Hayter of Kentish Town]

Parliament can decide that the organisations contracted to do those public functions should have the same restrictions on them, whether that be FOI or anything else, as a corporate body. That can be part of the contract. In a sense, it is a simple issue, and I mean this with absolute respect. I know that lawyers much prefer that these issues are decided in court. I think non-lawyers prefer it to be clear in law, and that is what we believe should happen. We do not want the Derbyshire principle to be eroded, in the words of the noble Lord, Lord Bew, by the threats continuing until a case is brought. For that reason we would like this to be in the Bill, and I would like to test—