Defamation Law

Paul Farrelly Excerpts

Thursday 15th July 2010 Westminster Hall

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I congratulate the hon. Member for Maldon (Mr Whittingdale) on his re-election as Chair of the Culture, Media and Sport Committee, from a shortlist of one. I thank my Labour colleagues for re-electing me, in a rather wider exercise of democracy, to the Committee. I also thank Mr Speaker for agreeing to the debate. He was forthright in his defence of free speech during the Trafigura affair last autumn, in which I played a walk-on part. If I may indulge in a plug, Mr Benton, only last Sunday I gave a talk with David Leigh of The Guardian on Trafigura and the wider issues of libel and media law reform at the excellent centre of investigative journalism at City university London.

The debate is certainly timely, allowing us to discuss for the first time the Committee’s report on press standards, privacy and libel, which the general election interrupted. It also keeps up momentum for reform in the House of Commons, following the excellent debate last Friday on Lord Lester’s private Member’s Bill in the other place—the House of Lords, to adopt modern terminology in libel. I shall refer to that at greater length in a moment.

We published our report on 24 February. It was a marathon effort, as I am sure the Chair of the Committee agrees, having lasted from autumn 2008. That hints at the complexities and the sheer range of issues involved in reforming that area of law. I was certainly not the only member of the Committee who was glad to clear the decks for the general election, which was looming over us.

There was much unfinished business in the field as the general election became all-consuming, such as taking forward in law Sir Rupert Jackson’s wide-ranging report on civil litigation costs, to which the Minister referred, which was published in January. There was also the review by the former Justice Secretary, my right hon. Friend the Member for Blackburn (Mr Straw), on libel and the internet. He also produced proposals for reform of conditional fee agreements, about which I shall say more later. We also followed up on the conclusions of the report from the Ministry of Justice’s libel working group, which was published at the end of March, just as we were about to go to the polls. The previous Government’s response to that included a commitment to a draft libel reform Bill, and the House should give a strong vote of thanks to my right hon. Friend for all his work and effort in that area. I was glad that that work was acknowledged by Lord McNally, the new Minister, in last Friday’s debate.

I am glad that the coalition agreement included the following single-line commitment:

“We will review our libel law to protect freedom of speech.”

However, there is always a danger after an election, with so many competing interests, that action might be stillborn, despite the fine words. The danger of a lack of progress was highlighted before the election by the fate of the statutory instrument that was intended to address the matter of costs in conditional fee agreements. It was mauled in Committee by Members from all parties. It is not necessary to dwell on the ins and outs of that, as it is better in the cause of reform to make as many friends and as few enemies as possible. The proposal was to limit success fees in conditional fee agreements in defamation cases. That was certainly a blunt instrument. In our report, we said that recoverability from the defendant should be limited, meaning that lawyers and clients could haggle. The instrument that came forward, which would have limited that across the board, was always open to the attack that it would give renewed carte blanche to unscrupulous tabloids to print yet again what they liked and that it would limit access for ordinary people without the means to try to salvage their reputations.

It was made clear before the election that that instrument was intended to be an interim measure that could be achieved quickly without primary legislation, and in anticipation of wider reform of libel law and costs following the Jackson review. While the newspapers drowned their sorrows after the statutory instrument went down, I suspect that the biggest bar bills were run up by the likes of Carter-Ruck and Partners and the so-called Lawyers for Media Standards—I suspect that it was a good day for those other well known firms: Krug, Bollinger and Dom Pérignon.

At the weekend, those of us at the City university London summer school wanted to raise a glass to Lord Lester for keeping up the pressure for reform through his excellent private Member’s Bill, and to all the organisations involved in crafting and supporting the Bill, including Index on Censorship, English PEN, Sense About Science and The Guardian, the BBC and The Times from the media community. We also wanted to raise a glass to Lord McNally, who confirmed on Friday that the Government would pick up the ball left by my right hon. Friend the Member for Blackburn and produce a draft Bill for consultation. Furthermore, he set out a timetable: a draft bill will be published early next year for pre-legislative scrutiny; and, I hope, a substantive Bill will be included in the Queen’s Speech setting out the 2011-12 legislative programme. That is the yardstick for reform that has been clearly set out, and by which progress will be measured. Little wonder that Lord Lester’s reaction on Friday was so measured:

“when I hear my noble friend...speak as I did now, I wonder whether I am alive at all or whether I am in heaven.”—[Official Report, House of Lords, 9 July 2010; Vol. 720, c. 483.]

I first met Lord McNally shortly after my election in 2001 when we sat together on the Joint Committee on the Draft Communications Bill, the so-called Puttnam Committee. I was aware of his good work on the Labour Benches in Harold Wilson’s day, before wrangles with the left in our party led him to his current berth. He is a sound man and we look forward to working with him on reform. We look forward to the Minister today confirming the Government’s intentions and perhaps giving more detail on what is proposed.

I will not discuss all the complexities and controversies involved in defamation reform today, but I will single out a few areas. The devil will, of course, be in the detail. Despite the forces of reaction gathering to oppose reform—it reminds me of a scene from “The Lord of the Rings” in which Sauron summons his “Carter-U'Ruck-hai” and the Orcs, those “Lawyers for Mordor Standards”—a great deal of consensus has built up on the way forward in several areas, which is encouraging. For example, with regard to libel and the internet, the previous Government, the Select Committee, the Ministry’s libel working group and Lord Lester’s Bill have all agreed that the measure should relate to single publication, limited to a year after appearance, aligning the online law with the law dealing with publication in print and giving more certainty to people who maintain online archives and databases. Libel tourism is another area on which there is increasing consensus, and that is increasingly connected to the law on the internet. The consensus from all those bodies is that we should tighten the legal procedure rules and throw out the abuse of our courts and laws.

The role of parliamentary privilege in protecting free speech is also an area of consensus. That was highlighted in the Trafigura affair, and not for the first time, but nothing was done on each occasion. Lord Lester’s Bill addresses that simply and agrees with the Select Committee that we need a modern statute. We also look forward to the conclusions of the review of practices on super-injunctions being carried out by the courts.

Where there is disagreement, it seems to centre, refreshingly, on not rushing to judgment and instead consulting, as our report recommended, so that changes in the law do not have harmful, unintended or unforeseen consequences. I will mention a few major examples. We should consider statutory backing for the public interest defence to protect decent investigative journalism while maintaining the protection needed for individuals whose reputations are wrongly and irresponsibly traduced. The Committee was inclined first to put into statute a widened definition for court decisions on responsible journalism—the so-called Reynolds defence. I took the precaution of consulting former newspaper colleagues who are at the coal face of investigative journalism, and they advised taking care and consulting. That was our recommendation. That caution on getting the change right was reflected in the debate on clause 1 of Lord Lester’s Bill last Friday.

However, there is an urgent need to protect legitimate scientific and medical inquiry and honest opinion and comment. It was good to see the Court of Appeal in the Simon Singh case recently decide that libel courts are not the forum in which to settle issues of scientific or medical proof or controversy.

The other major area on which we urged wide consultation was that of corporations and defamation. There was a concern that deep-pocketed litigants could afford to mount libel cases—it is of little consequence to major corporations that the costs could run into millions. In part, the actions were designed to chill investigative journalism and take good journalists out of the game—it takes so much time and effort to counter libel actions. In our report, we highlighted what I describe as the most flagrant abuse of libel laws in recent years in this country: the case that Tesco brought against The Guardian. The substance of The Guardian’s allegation about tax avoidance was true, but the newspaper made mistakes along the way and, even though it was later proved that Tesco was avoiding the tax in question, The Guardian felt compelled to settle out of court simply because the costs were mounting inexorably.

In his Bill, Lord Lester does not propose any reversal of the burden of proof for corporations, but requires them simply to demonstrate likely financial loss, which they do not have to do now. I, and I think many people who were in the debate in the House of Lords, do not believe that that goes far enough. Determining what constitutes likely financial loss might, in itself, be a recipe for more costs. For example, should that include shareholders? In the Select Committee report, we made recommendations, and urged the Government to consult widely and consider the experience of other countries, such as Australia, where the law in this respect has been reformed in recent years.

The big elephant in the room, which Lord Lester’s Bill does not address, is cost. Cost is the overriding issue. Many of the problems with our libel laws would not be so pressing if it were not for the cost. We are aware that the Government are considering taking forward the Jackson review, but that might take years. We need some indication from the Government as to when the cost issues will be addressed. They are deliberately not addressed in Lord Lester’s Bill, but they are the major issue for responsible investigative journalism in this country. My right hon. Friend the Member for Blackburn tried unsuccessfully to achieve progress in the previous parliamentary Session. It is imperative that we get some progress now.

--- Later in debate ---

[Mr Whittingdale]

I entirely endorse the hon. Lady’s comments. That is exactly the value of Select Committees, and I am pleased to say that they are becoming more widely recognised. When we set off, we did not anticipate that the inquiry would be quite as long and detailed as it was. It was, however, one of the most fascinating and satisfying inquiries in which I have participated. At the same time as we were having the debate in the House, there was a substantial debate and a growing clamour outside the House. I should pay tribute, as my colleague from the Committee has already done, to the work of Index on Censorship, English PEN and Sense about Science. As part of their campaign they mounted a petition, which I think received 52,000 signatures, and I imagine that every Member of the House will have received e-mails from constituents expressing their concern about the operation of the libel laws. It is not an immediately obvious subject for generating great concern, but it is becoming such an important issue that a lot of people feel very strongly about it.

The two principal conclusions that we reached—I will go into a little detail in a minute as to why we reached them—were that, in this country, the way the libel laws are balanced and the costs attached to going to court in a libel action are having a seriously damaging effect on investigative journalism, standards within the press and legitimate scientific debate. As a passionate believer in freedom of speech and in the essential role that a free press must play in a healthy democracy, I believe that that matter should be of concern to every Member of the House.

However, as if that were not enough, the Committee also discovered that Britain is now cited alongside authoritarian countries as a place where the press is being suppressed because of the actions of the state—in this case, the libel laws. Committees are sometimes criticised for going on foreign trips, but, in this example, it was immensely valuable that we were able to go to America and talk to some of the people who were directly affected, including authors and journalists. We also discussed with the American judiciary how they viewed our system, and we spoke to legislators at state and federal levels. I shall deal later with libel tourism, which is very important.

A host of different issues affect the operation of our libel laws. Some of them are being dealt with, or at least addressed, in Lord Lester’s Defamation Bill, and I was pleased to hear my hon. Friend the Minister speak about the Government’s intention to examine all the issues and, in due course, to produce a draft Bill that we can debate at length. It is reassuring that they have taken on board the necessity of addressing the matter urgently. However, as the hon. Gentleman said, probably the biggest issue affecting the whole libel system in the UK—how much it costs for somebody to defend a libel action—is not covered by Lord Lester’s Bill. None of us imagines that lawyers are ever cheap, but, in the case of libel, trials are often very long, no legal aid is available, and solicitors and barristers charge, frankly, eye-watering sums.

We had a slightly surreal debate in the Committee between various lawyers as to whether the average was £400, £500 or even £600 an hour. To most people, any of those three figures is extraordinary, and, given the time that can be taken, it is easy to see how the clock ticks quickly and the amount of money increases rapidly, to the extent that it is now said that the cost of a libel case in the UK is some 140 times the European average.

[Paul Farrelly]

Does the hon. Gentleman agree that the hourly rates actually double in many of the cases that are brought under conditional fee arrangements? The record shows that the so-called no win, no fee scenario is, as one would expect, nearly always a case of always win, double the fee.

[Mr Whittingdale]

The hon. Gentleman pithily encapsulates the situation, which I shall come on to later. He is absolutely right, and that makes the situation even more damaging for any defendant facing a libel action.

My hon. Friend the Minister referred to the work of Lord Justice Jackson, who gave evidence to the Committee alongside the Master of the Rolls and addressed the broader question of costs in all civil litigation. I know that the Government have listened to his advice, which was that we should not pick out one particular branch of civil law and address that, but address the whole thing together. As my hon. Friend said, that was not the view of the previous Government, and I have some sympathy with their position. The matter is urgent, which is why the then Justice Secretary, the right hon. Member for Blackburn (Mr Straw), decided to move on defamation cases ahead of the rest of civil litigation. I hear what the Minister says, but I hope that there will not be further delay—we must address the matter quickly. By all means, let us address it in the round and look at all the costs involved in civil litigation, but let us not spend a long time doing so.

Various solutions have been advocated, and we probably need to adopt a combination of them. The first thing the Committee considered was the suggestion simply to cap costs—to set a limit beyond which one should not be able to go. We accepted the evidence we received that that is a blunt instrument. It is difficult to predict the direction of a case, so capping is probably not a realistic solution. However, various solutions undoubtedly could be introduced: greater cost budgeting and case management, and a pause every now and again to see how costs are progressing. Those are sensible options, but the real problem, as the hon. Gentleman said, is conditional fee arrangements, which were introduced with wholly good intent. I absolutely accept that the wish to make the legal process available to people who would otherwise struggle to afford it is an entirely worthy objective. The intention was that a legal practice would be allowed to charge a success fee if it won a case, in recognition of its risk in taking on a CFA. If it lost the case, it would not get any money, so the fee was a return for the risk.

The problem we discovered fairly rapidly was that the practices that specialise in CFAs are very thorough and do not actually take any risks. They go through the cases that are put to them for potential CFAs and accept them only if they are almost certain that they will win. We struggled to get the exact figures for the proportion of CFA cases that were won and lost, but it was clear that, overwhelmingly, cases taken on a CFA were a pretty safe bet. On that basis, we found it difficult to understand why firms needed a 100% success fee on top of their costs. As I said, the costs are astronomical to begin with; they then double them, as the hon. Gentleman indicated, by imposing a success fee.

That is not the end of the story. An additional cost is after-the-event insurance, which is a premium taken out by the claimant in case they do not win, and which is chargeable to the defendant in the event that they lose. Such insurance can cost anything up to £65,000 plus tax for every £100,000 worth of cover, so we are now talking about almost 270% of the costs that can be awarded against a defendant in a libel action. The extraordinary thing about after-the-event insurance is that if the defendant loses, obviously he will have to pay the claimant’s premium, but if the claimant does not succeed, he does not have to pay the premium. The insurance is marketed on the basis that one can take it out but not have to pay for it at all. It is simply another cost imposed on the defendant, and, because there is really no incentive for a claimant to keep costs down, it is a licence for companies to set their own sums and print money.

The effect of those three things taken together is that now many newspapers will not seek to defend a libel action, even if they are convinced that they have a strong case. They will regard it as quicker and cheaper to settle out of court. Perhaps even more worrying is that often they will not print the story in the first place, simply because of the danger that they might get sued. That chilling effect on press freedom and journalism causes great concern.

[Paul Farrelly]

The hon. Gentleman mentioned cost-capping and the importance of speedy reform. Does he agree that costs have become so surreal that when capping is mentioned as a measure to try to reduce them, a great number of the legal fraternity argue that it could increase costs because of the cost of cost-capping meetings, and that, as a consequence, nothing happens?

[Mr Whittingdale]

I entirely agree with my hon. Friend—I call him my hon. Friend in the spirit of the Select Committee. What he describes introduces another legal argument, which is, of course, billable. I will not say that this is a racket, but the lawyers do very well out of the process.

The Committee came up with a couple of recommendations to address these problems. The previous Government suggested that a 10% cap be set on success fees, but as my hon. Friend the Minister rightly said, the proposal did not find favour in the House when it was introduced before the election. The Committee’s solution was not quite to introduce a straight 10% cap, but to say that the success fee that could be recovered from a defendant should be set at 10%. We did not feel it right to interfere with the arrangement between the claimant and their legal representatives; if the claimant wishes to pay a proportion of their damages in the form of a success fee, that is a matter for them. However, we said that the legal entitlement to recover from the defendant could be capped at 10%. Furthermore, for the reasons that I have set out, I view after-the-event insurance with some scepticism, and the Committee said that it should be made irrecoverable in its totality. I remain of the view that those two measures are sensible and would go a long way to removing the sting in conditional fee arrangements. Obviously, that will be a matter of great debate over the coming months, and I leave it to the Minister to ponder those issues.

The issue is not just costs; there is a whole variety of other issues, many of which Lord Lester’s Bill addresses. One issue is the multiple publication rule. Libel laws were written when the internet did not really exist, and its advent has changed everything. That is true of the permanence of articles and statements, which can now be found on Google at the press of a button. The old Duke of Brunswick case also becomes much more serious in the age of the internet. Clearly, it is widely recognised that that should be addressed.

There are a couple of defences that must, on the face of it, make sense, but which are slightly unclear in legal terms at the moment. One is the defence of fair comment, and I want to say a quick word about the impact of libel law on proper scientific debate, an issue on which Sense About Science has done a lot of work. I pay particular tribute to Simon Singh, who is a very brave man for deciding not take lying down the legal action brought against him by the British Chiropratic Association after he suggested that there might be some debate about the medical effectiveness of chiropracy in treating certain conditions. He was willing to put up a great deal of money from his own account to appeal the judgment. Several scientific journals now say that they hesitate before carrying perfectly legitimate scientific papers that contribute to debate, because of the potential for organisations, and particularly big corporations, to bring libel actions. Libel is about whether someone is defamed; it should not be used to interfere with scientific discourse, which is important if scientific knowledge is to advance. The fact that Simon Singh was willing to defend himself and proved triumphant in the end was important and drew attention to the fact that the issue needs to be addressed.

The other defence that the Committee looked at, and which the hon. Gentleman mentioned, is the Reynolds defence of responsible journalism. The two landmark cases of Reynolds and then Jameel set out the hurdles that a defendant must demonstrate they have got over before they can use the defence of responsible journalism. There is some debate about the difficulty of meeting each of those tests, with the result that few defendants have used this defence, which has been a cause of concern to us.

It was drawn to my attention not more than two hours ago that the outcome of the Flood v. Times Newspapers case has been published. This is the first occasion on which the Court of Appeal has overturned a Reynolds defence. Times Newspapers used a Reynolds defence in an action brought against it by a Metropolitan police sergeant. It said that what it had published was in the public interest and that it had met the relevant tests, but the Court of Appeal overturned the initial judgment on appeal. I do not want to say anything about the merits of the individual case, but I imagine that the fact that there is a further constraint on using the Reynolds defence will mean that adopting it becomes even less attractive to serious newspapers. I share the view of the hon. Gentleman that putting these things into statute carries a risk as well and that it might not be the most sensible way of strengthening them. However, it is important that it should be a legitimate defence for journalists investigating stories that are plainly in the public interest—we are talking not about muck-raking, but about serious investigative journalism—to show that they have used their best endeavours to meet all the various tests. We may need to look at that again in the light of certain developments.

[Paul Farrelly]

Does the hon. Gentleman agree that the conclusions of the libel working group also highlighted the danger that a codification in law could become a rigid checklist in itself? It would also be very costly to mount a defence. However, the group was more sympathetic to statutory backing for the principles that underlie a defence of responsible journalism, which have already been developed in common law. That might be a fruitful way of proceeding.

[Mr Whittingdale]

The flexibility that that might provide is clearly better than having a very detailed set of boxes, each of which has to be ticked. The hon. Gentleman’s suggestion is probably a sensible way to develop things.

Taken together, all these issues would go some way towards not weakening our libel laws, but restoring people’s absolute right to defend their character and reputation. The other side of that coin, however, is the right of the press to investigate and to expose, and the right of scientific journals to carry out legitimate debate. I hope that all those things will feature in the Government’s draft Bill.

I turn now to the way Britain’s libel laws are viewed overseas, because that should be of huge concern to the Government. The issue is encapsulated in the case of Rachel Ehrenfeld, whom the Committee met when it went to the States. She wrote a book in which she suggested that a Saudi Arabian business man, who has Irish citizenship, was in some way providing financial support to al-Qaeda and terrorism. An action was brought against her in the UK on the basis that 23 copies of the book had been sold here. Obviously, it was also accessible on the internet, so there was publication in that sense as well. However, the book was not widely available in the UK, and it is fairly clear that the case was brought here not because this was where the damage was done, or because Rachel Ehrenfeld or the Saudi Arabian had British citizenship, which they did not, but because the libel laws here were seen to favour claimants. On the back of that, we discovered that there are now widely shared fears in the United States. The Association of American Publishers submitted a statement to the Committee on the Judiciary of the US House of Representatives, which described libel tourism as

“the cynical exploitation of plaintiff-friendly foreign libel laws as a weapon to intimidate and silence U.S. authors and publishers.”

There is no doubt about which foreign libel jurisdiction it had in mind.

--- Later in debate ---

[Paul Farrelly]

I do not want this to become a conversation between members of the Select Committee, but does the hon. Gentleman agree that in the internet age matters go rather further than that? We received evidence that aggressive firms in the field of so-called reputation management—the two names that came up most frequently were Schillings and Peter Carter-Ruck and Partners—were finding so-called defamatory articles on the internet and scouring the world for potential plaintiffs on whose behalf they could act, simply because the article was accessible from the UK. They could point out to such people the fact that they might well win under Britain’s libel laws and say, “So bring an action.”

[Mr Whittingdale]

I think that there is evidence of that. I hesitate before accusing the two firms that the hon. Gentleman named, although they happened to crop up time and again in evidence. Concerns have been expressed about the way CFAs are used in ambulance-chasing cases—with ads on television saying, “Have you fallen over? Ring up this lawyer, because you can win thousands of pounds.” This is basically the same thing, so there is a legitimate concern.

I think that what should really make the Government concerned, in relation to attitudes towards the British system, is the fact that it is not only publishers and newspapers that are making such comments. The UN Committee on Human Rights, members of which we met, has been very critical of the UK system. In addition, the US Government, at state and federal level, is taking action in response. We went to Albany, where New York state has passed what is called the Libel Terrorism Protection Act. The title is intended to suggest that we have been giving active succour to terrorism through our libel laws. The Ehrenfeld case was the cause of it; indeed, Rachel Ehrenfeld went to the New York state legislature to press for action to be taken.

The Act allows a judgment against an American citizen to be ignored or overturned in America if it is shown to be a breach of his or her first amendment rights. However, that has happened not only in New York state; such legislation is appearing in other states and has also passed into Congress. I have the report of 13 July—two days ago—stating that the Senate Judiciary Committee unanimously passed bipartisan legislation aimed at protecting authors and journalists from libel law suits filed abroad. Essentially, the New York Bill has now been taken up, and it looks as though it will pass into federal law.

When the previous Lord Chancellor, the right hon. Member for Blackburn, gave evidence to the Select Committee, he said first that he was not convinced that the situation was a great problem. Secondly, he did not seem terribly fussed even if foreign Governments were taking the attitude I have described. He said that we had learned that there had been no representations from the British embassy to defend our system; those concerned had sat by and let these things go on. I find it profoundly worrying that Britain’s closest ally—the country that, whatever one thinks of America, is regarded as a bastion of free speech—should regard us as so restrictive and hostile to the principle of free speech that it feels it necessary to pass an Act such as I have outlined. Although that Act does not specifically refer to the UK, it is perfectly clear that it is directed at this country. I hope that, given that the Bill is now actively passing through the Senate and Congress, the Minister will start to talk to American legislators as a matter of urgency, and perhaps reassure them that the Government intend to deal with the issue.

[Paul Farrelly]

Does the hon. Gentleman agree that, very soon after making those statements to the Select Committee, the previous Lord Chancellor was open-minded enough to change his mind completely? He added the issue of libel tourism firmly to the remit of the libel working group, and one of the four main areas on which it reported at the end of March was libel tourism and reforms to court procedures to stop abuse of process and abuse of forum.

[Mr Whittingdale]

Indeed, that is right, and the hon. Gentleman is correct to draw attention to it. I am delighted that the right hon. Gentleman came round to our view that the matter was a serious one, that needed to be addressed.

One or two other matters occurred to the Committee, one of which was referred to in passing by the hon. Member for Newcastle-under-Lyme, although, perhaps out of modesty, he did not devote as much time to it as it deserves. That is the issue of this place and the reporting of our proceedings. It is well known that the hon. Gentleman uncovered the existence of a super-injunction taken out on behalf of Trafigura and tabled parliamentary questions about it, which led to a spat between Carter-Ruck and The Guardian about whether it was legitimate to report the fact that those questions had been tabled. There is no question about where parliamentary privilege lies: the hon. Gentleman is completely protected under parliamentary privilege in tabling those questions.

The situation becomes a lot less clear—this was news to me—in respect of a newspaper’s right to report the fact that the hon. Gentleman had tabled the questions. Previously, I had the impression that the reporting of responsible activity was allowed, under the Parliamentary Papers Act 1840, but Carter-Ruck argued vigorously with The Guardian that the super-injunction prevented the newspaper from reporting the questions. The Guardian’s in-house lawyer confirmed that that was her view as well. It later became apparent that the House authorities probably shared Carter-Ruck’s view. In my view, that is a profound threat to this place.

In a way, there is no point in our being able to say things in Parliament or table questions if nobody is allowed to report them. In the Select Committee’s view, any uncertainty about reporting parliamentary proceedings and the extent to which privilege allows Members of Parliament to raise matters with a degree of protection against libel action needs to be addressed quickly and removed. Lord Lester has included this in his Bill.

The two last things that I will mention are not principally about libel, but touch on it. We Committee members spent a lot of time considering privacy, and the balance between articles 8 and 10 of the European convention on human rights, which has been used to bring in a privacy law in this country. That matter touches on libel because some people now choose to use privacy legislation rather than libel legislation. Those two kinds of legislation are not separate. Under privacy legislation, people do not necessarily have to say whether the story is even true—they can just use such legislation to prevent it from being published. That needs to be borne in mind if we are going to have the thorough overhaul that I hope the Minister intends.

The last area that I should like to mention, which is complementary to libel law, is the self-regulatory mechanism adopted by the press—the Press Complaints Commission—which the Committee supports. There is a lot of debate about the effectiveness of the PCC, but it offers an alternative. If people choose to go to court and mount a libel action, it can take a long time and cost a lot of money, but at the end they might get a definitive statement that they have been defamed—and they may get a lot of money as a result. The PCC can take action quickly and is free, but people do not get any money: the most that they can hope for is a judgment by the PCC that the newspaper was wrong to carry a story. Each option has alternative attractions; each mechanism is useful, and one cannot substitute for the other.

The Committee was concerned about the most serious serial libel that has taken place in the past 50 years—perhaps within memory—which is that suffered by the McCanns, who were subjected to libel not once, but day after day, and not just in one newspaper, but in newspapers across Fleet street. That was eventually recognised and a lot of apologies were made, and payments were also made, but it cannot have made up for what they suffered at what was already a terribly distressing time for them. We were concerned that the self-regulatory mechanism of the press appeared to have failed in that instance, and we made a number of recommendations about how it should be strengthened. The role of the PCC needs to be borne in mind when looking at libel, because it and the courts deal with similar problems, but perhaps from different ends.

I think that I have spoken for long enough, but I have spoken for so long because we in the Committee spent a great deal of time on this serious issue. I am pleased that statements in the manifestos of all three parties, and in the programme of the coalition Government, are now being progressed and that the Government have made it clear that they are determined to take action in this area. I hope that we, as a Committee, have helped that process and that we will continue to do so in the debate on the draft Bill when it appears.

[Helen Jones (Warrington North) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Benton.

We have had an interesting debate. I congratulate the members of the Culture, Media and Sport Committee on their contributions to the debate; they have done an enormous amount of work on this issue. I was pleased to hear the Minister set it out clearly that, although he wants to take action to reform the libel laws, that is a complex matter and a delicate balance that has to be struck. He set out clearly the need to protect academic and scientific debate and investigative journalism, and the problems in respect of the costs in civil proceedings, particularly libel proceedings.

My hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) also stressed the need to get the change right, and I think all hon. Members would agree. He also touched on the role of corporations in defamation cases and the possible damage to investigative journalism that can result from that.

The Select Committee Chair, the hon. Member for Maldon (Mr Whittingdale), set out clearly the state of the law and the damage that can result from that, particularly the problems that we are dealing with in respect of success fees and costs.

All the contributions to the debate reflect the real concern about the state of the law and the complex nature of the reforms that are needed. The Select Committee report on press standards, privacy and libel made a useful contribution to the debate. Others have made useful contributions, too. For instance, a number of early-day motions have been tabled in the House, and English PEN and Index on Censorship produced reports, leading the then Secretary of State for Justice, my right hon. Friend the Member for Blackburn (Mr Straw), to set up the Ministry of Justice working group on libel, which produced a report last year.

We all face the problem that any reform of the law needs to do a number of different things: protect the right of free speech, particularly following the Singh case; protect that right in free scientific debate and inquiry; and protect the rights of campaigning investigative journalists who publish articles that are in the public interest. But it also needs to ensure that those who are defamed, particularly those of modest means, have recourse to the law to protect their reputation. The hon. Member for Maldon mentioned the libels suffered by Mr and Mrs McCann. I do not think that any hon. Member in this Chamber would suggest that people in such a position ought to be debarred from having recourse to the law because they are not wealthy.

We face difficulties in drawing up a new law, but I am pleased that all parties are now committed to doing so. The Labour party manifesto for the election committed us to changing the law to protect the right of defendants to speak freely. The Conservatives and the Liberal Democrats also committed themselves to reform. I genuinely do not believe that this is a party political issue and I say that as someone who is normally a tribal politician. The House needs to scrutinise this issue carefully to get the balance of the law right.

It is clear that so-called libel tourism is causing real concern. In fact, English PEN and Index on Censorship argued that English libel law imposes unnecessary and disproportionate restrictions on free speech, and that the effect reaches throughout the world. Many of us might not go as far as that, but it was clear when the Select Committee considered the matter that restrictions may be necessary on claimants whose primary place of residence or business is not in the UK, and that they should perhaps face additional hurdles before being able to bring a case here.

It is also clear that the scope of the defence of public interest set out in the Reynolds and Jameel cases needs clarification. I hear what hon. Members have said about the risks of putting that defence into statute—I am minded to go down that route—but we must consider the rule on multiple publication, particularly in the age of the internet. The Select Committee suggested a limitation period of one year, with the courts having discretion to extend that. Again, it was clear that a balance must be struck between allowing individuals to protect their reputation, and ensuring that newspapers and other organisations are not forced to remove articles from the internet simply because the passage of time made it difficult and costly to defend them.

The report for the Ministry of Justice set out two options: a one-year limitation rule, or retaining the rule on multiple publications but allowing exceptions—perhaps the extension of qualified privilege or a similar freestanding defence.

[Paul Farrelly]

Lord Lester’s Bill addresses qualified privilege. Does my hon. Friend agree that the law on qualified privilege is not now working to provide protection as it should and was intended to do, particularly of the work of non-governmental organisations? They often feel constrained, for example, in referring to United Nations reports or reports from overseas bodies that make allegations because they fear a libel suit in which they must prove all the allegations themselves rather than relying on the report of otherwise august bodies?

[Helen Jones]

My hon. Friend makes a valid point, and I hope that we can examine the issues in detail when the draft Bill is before us. I want to state clearly that by focusing on, for example, libel tourism and cases brought by wealthy individuals, we are sometimes in danger of forgetting that others must also have access to the law. We all agree that justice is not justice unless everyone has access to it.

That leads me to what is frequently described as the elephant in the room—costs and conditional fee agreements. The Constitutional Affairs Committee considered the matter in the previous Parliament, and received a large number of submissions from media organisations indicating that they are particularly affected by the use of CFAs. The Committee said that one of the main issues for defendants in libel cases is costs. When Lord Phillips of Worth Matravers gave evidence to that Committee, he highlighted the problem of costs in defamation actions, and expressed many people’s concern that fighting and winning a case could incur substantial costs that a defendant might not be able to recover. That is a valid point, but the Committee pointed out and we must bear it in mind that while it received many submissions from media organisations, it is much more difficult to receive submissions on behalf of claimants because they are not in organised groups that can give evidence to Select Committees.

We all know that the balance is delicate. The previous Government sought to deal with the costs of defamation actions before taking action on Lord Justice Jackson’s report by limiting the uplift in CFA cases to 10%, but that did not find favour with the Committee that scrutinised it in the House. I remember that very well because I was the Whip on the Committee, and it was the only one I have ever lost. Since then, some wise heads have suggested slightly higher limitations and other ways of capping costs.

[Paul Farrelly]

As other hon. Members have said, we made a distinction between limiting the uplift in defamation cases and limiting recoverability. Does my hon. Friend agree that in such cases the issue is reputation, and that damages should be secondary? It should be possible for claimants to share damages with solicitors in part to contribute to their costs. That would not be limited by capping recoverability from the other side.

--- Later in debate ---

[Mr Djanogly]

With the leave of the House, I thank the hon. Member for Newcastle-under-Lyme (Paul Farrelly) and my hon. Friend the Member for Maldon (Mr Whittingdale) for the interesting and helpful views that they have expressed during the debate. I recognise that the co-operative approach taken by the hon. Member for Warrington North (Helen Jones) is the best way to help the Bill to become law.

The wide range of issues that have been raised and the strongly held opinions that exist serve to illustrate the complexity of this debate. They also show the importance of finding solutions that are workable in practice and will achieve a fair balance that preserves and upholds the right to freedom of speech, while not preventing people from taking action to protect their reputation from defamatory material where appropriate. The views that hon. Members have put forward will be of considerable help to the Government in developing proposals for a draft Bill that will endeavour to strike the right balance on those important and sensitive matters.

As I said at the beginning of the debate, I am not in a position today to indicate exactly which provisions may be included in the draft Bill, or to set out conclusively the Government’s position on all the individual points raised. However, I assure hon. Members that I will take all the views that have been expressed fully into account, together with those views that have emerged from the recent debate in another place and the outcomes of the informal consultation with interested parties that will take place over the summer. A large number of points have been raised, and I would like to expand on some of them. I do not wish to restrict the consultation process in any way but, I repeat, today is about the Government encouraging debate, not about providing conclusions.

In that vein, let me congratulate my hon. Friend the Member for Maldon on his re-election as Chair of the Culture, Media and Sport Committee, not least because he can now see through his Committee’s valuable work on defamation. In a report published earlier this year, the Committee made recommendations on a range of issues relating to the law of libel. Those included proposals on a responsible journalism defence, libel tourism, the defences of justification and fair comment, the ability of corporations to bring libel actions, the early resolution of meaning and issues relating to the internet, and the multiple publication rule.

On CFAs, the Committee agreed that costs were too high and that reform was needed. As my hon. Friend said, the Committee also recommended that in defamation cases, CFA success fees should remain at 100% of base costs, but that only 10% should be recoverable from the defendant. The Committee’s approach therefore differed from both the previous Government’s proposal to impose a maximum success fee of 10%, and from Lord Justice Jackson’s recommendation to abolish the recoverability of the success fee and the after-the-event premium.

I am grateful to my hon. Friend and the members of his Committee for the valuable contribution to the debate made by that report. As the hon. Member for Stoke-on-Trent North (Joan Walley) noted, many of the issues raised were also included in a report entitled “Free speech is not for sale”, which was published by English PEN and Index on Censorship last autumn, in a report by the Ministry of Justice’s libel working group in March this year, and in Lord Lester’s private Member’s Bill. I would like to extend the Government’s thanks to all those involved in considering those important matters. I confirm that their views will be taken into account both in our review of the substantive law and in how we progress the issue of CFA reform.

[Paul Farrelly]

Will the Minister give way?

[Mr Djanogly]

I am moving on to CFA reform, if that is what the hon. Gentleman wishes to speak about.

[Paul Farrelly]

It is.

[Mr Djanogly]

Then the hon. Gentleman should listen—I knew that I would not get away by saying just that. He addressed the issue of cost and mentioned the statutory instrument produced by the previous Government at the end of the previous Parliament. I would like to explain our thinking on that issue. I confirm to him and to my hon. Friend the Member for Maldon that we are firmly committed to taking timely action to reduce the high costs under CFAs, while ensuring appropriate access to justice. As my hon. Friend spelled out in great detail, the high cost of CFAs is a concern not only in defamation proceedings, but more widely across other areas of civil litigation. I was pleased that he thought it important to look at the issue in the round, and I confirm that we will not delay the process as a consequence of that.

I am conscious that, as the hon. Member for Warrington North said, the attempt by the previous Government to limit CFA success fees in defamation cases through the Conditional Fee Agreements (Amendment) Order 2010 was not recommended to the House of Commons by the Committee. The Labour Government seemed to believe that by reducing the success fee mark up on CFAs and defamation cases, the problems that we are debating today would simply go away. It is true that those who were not rich would have been denied access to justice, but that would not have been the case for a wealthy individual or a corporation that wanted to suppress academic or scientific research, because they would not have wished to use CFAs in the first place. That blundering piecemeal approach is exactly what the Government intend not to pursue, and we will be looking at the issue in the round. I was pleased to hear the hon. Lady agree to that.

[Paul Farrelly]

The issue is complex. One person who was relieved that the statutory instrument did not succeed was Peter Wilmshurst, who is a consultant cardiologist at Shrewsbury and the University hospital of North Staffordshire. He is being sued by an American company, NMT Medical, and is being defended under a CFA. His problems are that there is one-way traffic. There are costs and delays and ultimately, he has no guarantee of getting his costs back if he is successful in countersuing for libel, or if NMT Medical loses the case. That is an example of the complexity of the issue, and the way that the libel laws urgently need to be reformed because of the costs and complexities involved, and the ability of companies to silence scientific debate.

[Mr Djanogly]

I disagree that the proposed order would have had the immediate impact that the hon. Gentleman suggests. However, we are moving on and the process is under way. That order sought only to reduce success fees in defamation-related proceedings. Although those proceedings are important, we know that CFAs have been a cause of major concern in other areas such as clinical negligence cases against the NHS, or in the context of the compensation culture debate.

The change that the order sought to achieve was inconsistent with more considered proposals in the field, which were known to the Government at that time. Lord Justice Jackson spent a year considering those proposals and wider issues, and made recommendations in January this year for the reform of CFAs across all areas of civil litigation. In addition, the report by the Culture, Media and Sport Committee entitled, “Press Standards, Privacy and Libel” was published under the chairmanship of my hon. Friend the Member for Maldon. The Government recognise the urgency and the complexity of these issues, but we strongly believe that it is important to consider the case for potential reform across all areas of civil litigation, rather than confine it to individual areas. Lord Young of Graffham is conducting a review into health and safety law and the compensation culture, and we await his report with interest. We are examining the options for reform and will announce the way forward as soon as possible.

My hon. Friend the Member for Maldon discussed funding litigation in a wider context, and I should add that Lord Justice Jackson is persuaded that solicitors and barristers should be permitted to use so-called contingency fees in litigation, subject to appropriate regulation and arrangements for costs recovery. Contingency fees are a type of no win, no fee agreement, under which the lawyer’s fee is payable only if the client wins, and is calculated as a percentage of the sum recovered. Importantly, the lawyer’s fee is a percentage of the damages, rather than being fee-based. That type of funding is widely available in other jurisdictions, but is not permitted in civil litigation in England and Wales. Lord Justice Jackson considers that contingency fees could increase access to justice. We shall also need to consider his recommendations on that issue.

My hon. Friend also expressed concern on libel tourism. There is a widespread perception that the English courts have become the forum of choice for those who want to sue for libel and that that is having a chilling effect on freedom of expression in other countries. For example, in the USA, a number of states have introduced legislation to prevent foreign libel judgments from being enforced there. I understand that legislation on the issue completed one of its stages in the US Senate this week. My hon. Friend mentioned that.

Although we need to review the implication of that possible law and other laws, such as those coming from the EU, as far as they relate to English jurisdiction, I am concerned that we should not be stampeded into basing our laws on an American world view of free speech. My hon. Friend the Member for New Forest East (Dr Lewis) expressed that point very well in his strong and valuable intervention.

There are mixed views about how far libel tourism is a real problem. A wide range of interesting views were expressed in the Second Reading debate on Lord Lester’s Bill in another place on 9 July, including by Lord Hoffmann, who in his speech and in a very interesting lecture earlier this year was extremely sceptical about the extent of any problem in that area. The problem with the Ehrenfeld case, for instance, is that she did not defend the action, so it is difficult to draw conclusions from it. Lord Hoffmann suggested that Dr Ehrenfeld could have relied on the Reynolds defence. I make no comment on that, but those issues will need to be reviewed.

Research that we conducted in the context of the Ministry of Justice libel working group’s consideration did not show any significant number of actual cases involving foreign litigants in the High Court in 2009. However, non-governmental organisations have said that a major problem arises from the threat of libel proceedings by wealthy foreigners and public figures, which is used to stifle investigative journalism, regardless of whether cases are in the end brought, so the number of cases alone may not accurately reflect the extent of the problem.

A number of possible approaches have been proposed to deal with any problems that exist. For example, the libel working group proposed procedural steps to tighten the rules and practice to head off inappropriate claims at the earliest possible stage in cases in which court permission is required to serve a defamation claim outside England and Wales. Lord Lester’s Bill has adopted a different approach, which focuses on whether the publication in England and Wales can reasonably be regarded as having caused substantial harm to reputation, having regard to the extent of publication elsewhere. We shall consider those proposals and other possible options carefully in reaching a decision on the way forward. In doing so, we will of course have to keep it in mind that there is relevant European legislation—in particular, the Brussels I regulation on jurisdictional matters—with which we shall need to ensure compliance.

The hon. Member for Newcastle-under-Lyme discussed the timing of our considerations of the Jackson review. I can advise him that we intend to revise the relevant cost-related recommendations in conjunction with our review of legal aid. That will be consulting in the autumn of this year, which he will appreciate is before the draft defamation Bill is to be tabled for consultation.

[Paul Farrelly]

May I come back on that, as the Minister might have expected? I think that I noticed the quizzical brow of my friend the Chairman of the Select Committee, the hon. Member for Maldon (Mr Whittingdale). The Minister’s statement on going ahead and more consultation in line with the reforms to legal aid has left me none the wiser as to when that process will come to an end.

[Mr Djanogly]

As I said, I cannot at this stage give a firm date for when a draft Bill will be published or for when the legal aid consultation will finally be settled. However, I can tell the hon. Gentleman that those matters are moving forward at speed. The legal aid consultation will be published in the autumn. I hope that he will take some comfort from the fact that we are not pushing the issue into the long grass.

[Paul Farrelly]

With respect, I think that comfort will be taken in certain quarters—I can hear the Bollinger corks popping as we speak.