Defamation Bill

Lord Phillips of Sudbury 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.

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

My Lords, I shall begin with my usual disclaimer. I am not a lawyer. As I often say about my friends in this House who are lawyers, we are in their debt because if we had to pay them we could not afford them. We get the benefit of considerable legal expertise. The only problem is that it does not always point in the same direction. Nevertheless, it is welcome—as is the approach of the various groups that have become involved in this Bill. I pay tribute to my colleague and noble friend Lord Lester, who launched us on this path with his Private Member’s Bill, and the noble Lord, Lord Mawhinney, and his group, who in the pre-legislative scrutiny committee were extremely thorough. I also pay tribute to the Opposition, who played a very constructive role, and the various lobby groups that have come in. As has been said, it is a task of achieving balance.

I am grateful for the comments made about my own attitude. I take the view, particularly on this Bill, of President Harry Truman, who when asked whether the Marshall plan should be called the Marshall plan or the Truman plan said that it should be called the Marshall plan, as it is amazing how far you will get if you share a little of the credit.

I want to share the credit because my sole aim and intention in taking this Bill through is to leave us with a piece of useful legislation which will address some of the problems to which the noble Lord, Lord May of Oxford, has just referred of us having an unwelcome reputation for libel tourism, and to address some of the unfairness of costs.

As my noble friend Lord Lester indicated, we will be returning to this matter but I draw the Committee’s attention to my letter of 10 October, which is in the Library of the House and informs noble Lords that we were referring the matter of costs to the Civil Justice Council, an independent advisory body chaired by the Master of the Rolls, to advise us on this matter by the end of March 2013. As Members of the Committee may have noticed, the Government have subsequently announced that they have accepted Lord Justice Leveson’s recommendation that cost protection should be extended to defamation and privacy cases. Therefore, one of the matters which has been commented on most often, costs, is being addressed as this Bill moves forward. Whether we get the balance right is a matter for—

[Lord Phillips of Sudbury]

I am sorry to interrupt but I am trying to be helpful to my noble friend. I think that he just referred to a letter of 10 October.

[Lord McNally]

It was 10 December.

[Lord Phillips of Sudbury]

I am most grateful, because I have a letter from 8 October.

[Lord McNally]

It was my fault. I thank my noble friend for drawing my attention to that. I hope that that sets a pattern whereby his interventions will be entirely helpful—as they always are. Before I dig deeper, I should turn to the amendments before us. In the light of requests from a number of noble Lords for information on what the serious harm test is intended to encapsulate, it may be helpful for me to explain as fully as possible the Government’s thinking behind Clause 1.

The introduction of a serious harm test reflects the Government’s view that there is merit in legislating to ensure that trivial and unfounded actions do not proceed. It is the first time that there has been a statutory threshold of this nature in defamation proceedings. In the draft Bill, we consulted on the following provision. It said:

“A statement is not defamatory unless its publication has caused or is likely to cause substantial harm to the reputation of the claimant”.

In formulating this provision, we examined a series of cases over the past century in which the courts have considered the question of what is sufficient to establish that a statement is defamatory. A recent example is Thornton v Telegraph Media Group Ltd, in which an earlier House of Lords decision on Sim v Stretch was identified as authority for the existence of a “threshold of seriousness”. In Jameel v Dow Jones and Co, it was established that there needed to be a “real and substantial tort” in the jurisdiction for a claim to be able to proceed. The claim which failed that test was struck out as an abuse of process. The “substantial harm” clause aims to encapsulate the tests applied in these and other cases. Our view at that point, which we expressed to the Joint Committee on the draft Bill, was that this would reflect and strengthen the current law. Establishing in statute a substantial harm test for the first time would give this requirement a new prominence and would help to discourage trivial and unfounded claims being brought.

In its report, the Joint Committee on the draft Bill took the view that a stricter test was appropriate and that,

“a threshold test that focuses on the seriousness of the allegation would raise the bar in a meaningful way and give greater confidence to publishers that statements which do not cause significant harm, including jokes, parody, and irreverent criticism, do not put them at risk of losing a libel claim”.

It recommended a test of serious and substantial harm.

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If that is right, how did we go through a process which began with “substantial”, presumably the test advised by lawyers, then move through detailed consideration by a Joint Committee to a test of “serious” and “substantial”, which was probably informed by legal advice, and finally emerge with the Government saying, “We will drop the one that we started with and take part of the one that you propose, which is the difference that you have added to the one that we propose”? No doubt, they do that on the basis of legal advice. How did we get there if this is as simple as people suggest?

[Lord Phillips of Sudbury]

My Lords—

[Lord Lester of Herne Hill]

My Lords—

[Lord Browne of Ladyton]

If the noble Lord will excuse me, I will give way to his noble friend the solicitor first; then I will get to the barrister.

[Lord Phillips of Sudbury]

I must confess to being confused by the noble Lord’s argument. He started with a passionate point about making the law more accessible and understandable to the ordinary bloke, which is what the noble Lord, Lord Mawhinney, was concerned about. But how can it serve that purpose to have two words instead of one in circumstances where we already have had very experienced lawyers disagreeing as to the meanings of those two words? I note that the noble Lord has not advanced any view on the difference between “substantial” and “significant”. It seems to me that his recipe would confuse the layman.

[Lord Browne of Ladyton]

I am grateful to the noble Lord for his intervention but I am perfectly happy to adopt the distinction that the noble and learned Lord, Lord Mackay of Clashfern, offered the Joint Committee and that the chair of the Joint Committee has reported to us. I will live with that. I am happy to accept that. But that is not my point. Although I am speaking to amendments in my name and that of my noble friend, I am using them as a device to try to get some clarity of the Government’s thinking so that our Parliament can say, “We support that thinking. Therefore, people outside can have some understanding of what at least we think we are doing with the law”.

If anyone goes away and reads this, here we have an interesting debate in which a number of differing opinions have been expressed, all supported by eminent lawyers. If that leads to clarity, I am happy to go along with it. It may not be possible to provide the clarity that people crave. But my argument is that in our debates we should at least give some clear indication to people outside—they should not need a law degree for this—about where we are setting this bar and what it means. There are a number of ways in which one can do that, including reference to examples.

I turn now to the Minister’s response. I am grateful to him for the way in which he engages in the debate on these issues. Perhaps the noble Lord, Lord Lester, will allow me to make this point, then I shall take his intervention. I am grateful to the Minister for the way in which he engages in the debate and I know that he will listen carefully to any further points that I or anyone else want to make. I will go away and look carefully at what he has said.

While the Minister was speaking, I was looking carefully at what Jonathan Djanogly said in the equivalent debate in the House of Commons. He will be pleased to know that there was a lot of similarity. But there was some difference and it is that difference for which I am grateful.

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[Lord Phillips of Sudbury]

My Lords, the noble Lord, Lord Hunt of Wirral, is not here, but he made me think that I should have declared an interest at the beginning as a solicitor whose firm is Bates Wells & Braithwaite, which I now do. I have one general concern about these two amendments and one technical point that I want to make. The first issue has been referred to again and again, and it cannot be referred to enough; namely, the deeply unsatisfactory nature of libel and slander in terms of costs. None of us has much idea of what to do about it. Right from 1948, it was never part of the legal aid scheme, for perhaps understandable reasons. It has got worse as costs have risen faster and further, as the noble Lord, Lord May, among others, has said.

I hope devoutly that the good Lord Dyson will be bold in the way in which he looks at all this. As my noble friend Lord Lester has said, we need to think well outside the box. I also wonder whether there is the possibility of some insurance answer to this. For example, if all household policies had a libel insurance provision, the cost might be relatively insignificant when spread across the whole population.

In these two amendments, I am anxious about the ethical reputation of companies. The noble Lord, Lord Faulks, correctly drew our attention to that part of the Joint Committee on Human Rights report which distinguished between a huge, quoted multinational on the one hand and a small, owner-occupied, so to speak, business on the other, but I do not want to have a sheep and goats approach to reputation and corporations. I think that everyone in this Committee would agree that one of the great disappointments of the past 10 or 20 years has been the weakening of any ethical identity on the part of the great corporations. In the financial world, you can almost talk of a demoralised—literally de-moralised—community of companies where ethics and moral identity are now almost absent. I must confess that I do not want to add to that by saying that corporations can never sue in respect of an attack on their ethical identity.

One thing that one of the noble Lords who tabled this amendment might enlighten the Committee on is whether confining actions to where there is or is likely to be substantial loss can deal with the more difficult case. The noble Baroness, Lady Hayter, talked of the Perrier case, in which the loss was pretty direct, obvious and immediate. However, there are many other situations where serious defamation would be extremely difficult to calculate in terms of any direct financial consequences. That concerns me, because I want corporations to re-enter the world of ethics. They have a character and a personality—or they can—and therefore I am anxious about them.

My last point is in respect of Amendment 8(3), which mentions “for profit” organisations and then goes on to exclude charities, non-governmental organisations or other non-profit making bodies from this limitation. This point concerns the drafting only. Many charities and NGOs are profit-making, but not profit-distributing. I think that subsection needs to be changed, because a charitable hospital, for example, needs to make profits in order to invest in equipment, buildings and so on. That is well accepted and entirely consistent with charitable status, but, of course, such an organisation is not profit-distributing. That is a technical point.