Defamation Bill

Lord Marks of Henley-on-Thames Excerpts

Tuesday 5th February 2013 Lords Chamber

I hope that this second limb will be acceptable to the Government. The two limbs are united in these amendments but they need separate consideration. I support both of them.

[Lord Marks of Henley-on-Thames]

My Lords, I, too, support the amendment, but I do so on the basis that the general restriction on companies suing for defamation is limited to the requirement in subsection (3) of the proposed new clause that trading entities should have to show actual or likely financial loss before being entitled to sue for defamation. As drafted, proposed new subsection (2) would introduce a restriction on companies that is not so limited and is entirely undefined.

However, the restriction in proposed new subsection (3) is in line with the recommendation of the Joint Committee on the draft Bill, on which I served, and, as the noble Baroness, Lady Hayter, has pointed out, the recommendation of the Joint Committee on Human Rights as well. Whether companies should be able to sue for defamation was one of the issues that the Joint Committee was specifically asked to consider outside the ambit of the draft Bill, and we took a great deal of time and heard a great deal of evidence on this issue. The amendment accords with the sense of many who believe that corporate bodies trading for profit should not be in precisely the same position as natural persons in defamation law.

As in so much of the law in this area, the task is to strike the right balance between the right to free speech and the right to protect reputation. But it is a fact that companies cannot suffer hurt in their feelings and personal reputations in the same way as individuals can. Therefore, many have called for companies to be denied the right to sue for defamation. It is argued that companies have other ways to protect their reputations. It is argued that individual directors can sue, but to bring a suit for defamation is a serious undertaking and would expose those individual directors to substantial personal risk in costs when the real claimant should be the company. It is argued that large companies may have other steps they can take to protect their reputations by advertising or seeking publicity for their position, but that depends on their financial strength. A right to sue for malicious falsehood is often mentioned, but that is dependent on an ability to prove malice, which is notoriously difficult to do.

I take a different view. While companies do not have feelings that can be hurt, they can suffer financially, as my noble friend Lord Lester has pointed out. Defamatory statements about companies can have very serious consequences for their businesses, affecting the jobs of their staff and the prosperity of all concerned in them—whether or not untrue and defamatory statements are made with a view to profit by competitors or innocently by journalists. Therefore, it does not seem to strike the right balance to deprive companies of the right to sue for defamation altogether, quite apart from the fact that it would probably be contrary to the HRA to do so.

However, it seems proportionate and balanced to insist that companies and other non-natural persons trading for profit show that they have suffered or are likely to suffer substantial financial loss as a result of the defamation in respect of which they wish to sue. Imposing that condition recognises the difference in kind between individuals and non-natural persons trading for profit. It would not restrict the right of charities and other not-for-profit organisations to sue, and it is right that it should not do so; for example, charities can suffer from defamation in their future ability to raise funds, but it may be very difficult for them to demonstrate that. Proposed new subsection (3) of this amendment applies only to import a modest and proportionate restriction on the right of trading entities to sue and would introduce a valuable extra reform to this Bill.

Finally, I support the reform suggested by proposed new subsection (4) relating to bodies performing public functions, for the reasons that the noble Baroness, Lady Hayter, and my noble friend Lord Lester have already given, but principally because bodies performing public functions should be open to public criticism, even if private, in just the same way that public authorities are.

[The Archbishop of York]

My Lords, I, too, want to add a sentence of support to what the noble Baroness, Lady Hayter, and the noble Lord, Lord Lester, said.

I am patron of many charities and it would not be right if we did not strike the right balance. If a charity felt it was defamed because it was a body corporate, the restriction that has been put in here requiring the permission of the court is necessary. We are living in a very litigious society so if you are going to go to court to sue anybody, the permission of the court should be shown.

In proposed new subsection (3) there is the question of finance and the possibility of striking out if you cannot actually show that you have suffered loss. Because of that balance—that common sense that the noble Lord, Lord Lester of Herne Hill, was talking about—I am very attracted to this, and I hope that the Government will accept both limbs of the amendment, because you really could not do one without the other. It strikes a balance. For such a very long time, individuals could sue but reputational damage, as well as financial loss, is often incurred by a number of charities and it would be good to be able to do the same thing in terms of bodies corporate.

--- Later in debate ---

[Baroness Butler-Sloss]

My Lords, I support what the noble Lords, Lord Lester and Lord Faulks, have said. I have to admit to having been a judge, but not a judge who tried this sort of case. I believe that this is a matter that should be left to the judiciary, and the amendment is overemphasising something that really does not need to be done.

[Lord Marks of Henley-on-Thames]

My Lords, while the noble Baroness, Lady Hayter, is right to say that costs and early resolution are vital, I suggest that this extra strike-out provision is entirely unnecessary and, further, that it would introduce added uncertainty by bringing in a gloss on the serious harm test in Clause 1. In addition, it would add complexity to Clause 3 by introducing another test for whether or not there should be a strike-out. As has been said, the court is already able to strike out a case that has no merit; indeed, the noble Baroness, Lady Hayter, conceded that. It is right at the heart of these reforms that the Government propose to introduce an early resolution procedure in the rules, so I cannot see why the amendment should be necessary.