Financial Conduct Authority Redress Scheme

Debate between Paul Farrelly and Lord Garnier

Thursday 4th December 2014 Commons Chamber

[Sir Edward Garnier]

I could not agree more. The banks and the FCA must take responsibility for what they have done, and if that requires the urging of the Treasury, please let that happen. These banks are making vast amounts of money, and although I am a Conservative capitalist and like companies to make profits, I expect them to behave properly.

[Paul Farrelly]

Do the hon. and learned Gentleman’s constituents feel that they were advised by the bank to take on that collar? I ask because in the recent Crestsign case it was found that a company had been advised by RBS, but the bank was none the less allowed to rely on its disclaimer that it has not given advice. Does he agree that that legal position only compounds the uncertainty and the risks posed to businesses that take the banks on?

[Sir Edward Garnier]

I will not comment on the legalities or illegalities involved in that specific case, but I will say in relation to the case to which I have referred that the bank not only failed to explain the risks of moving into a new loan vehicle fully, properly and candidly, but subsequently sought to hide its own responsibilities for its failures. Such action, besides being—in my view—immoral, lowers not just the trust and confidence that small businesses should have in the retail banking sector, but the collective confidence of Members of Parliament, who should hold the Government to account for those failures if they are such, and if they occurred on the Government’s watch.

Defamation Bill

Debate between Paul Farrelly and Lord Garnier

Tuesday 16th April 2013 Commons Chamber

[Paul Farrelly]

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

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

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

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

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

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

[Sir Edward Garnier]

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

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

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

[Paul Farrelly]

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

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

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

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

Defamation Bill

Debate between Paul Farrelly and Lord Garnier

Wednesday 12th September 2012 Commons Chamber

[Mr Edward Garnier (Harborough) (Con)]

It is a pleasure to speak in the debate because it gives me the opportunity to congratulate my hon. Friends the Members for Kenilworth and Southam (Jeremy Wright) and for Maidstone and The Weald (Mrs Grant) on their promotion to the Government. I cannot think of two finer people to receive such an honour. I served on several Public Bill Committees with my hon. Friend the Member for Kenilworth and Southam when we were in opposition, and I could not think why he was not made a Minister as soon as we came into government. At least he got there in the end, however, and I sincerely trust that he will stay in his post for a good long time, not least because the Bill is of considerable public importance and interest.

I must disclose a form of interest in the Bill because there was a time when I knew quite a lot about the law of defamation, although I then spent two years as a Law Officer during which I forgot all the law I ever knew. While I was listening to the hon. Member for Stoke-on-Trent South (Robert Flello), I was reminded of our debates during the passage of the Bill that became the Access to Justice Act 1999. At that time, it was apparent that the then Labour Government were not terribly interested in providing access to justice, and I said that that Bill would more properly be called the Denial of Access to Justice Bill. However, that was a long time ago.

I come to our debate on the new clause untrammelled by any knowledge of sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, but I did listen to the hon. Gentleman’s speech. I do not think that my hon. Friend the Minister will have to look very hard to find the references that the hon. Gentleman was after, but if the situation is as it has been described, that would be a pity, to say the least.

If the words of my noble Friend Lord McNally that were cited are to mean anything, I trust that the Government will do something about the problem, because a failure to provide access to justice for people without deep pockets should not be encouraged. Conditional fee arrangements—I have benefited from one or two—do not cost the Government any money. They are not an ideal system of achieving access to justice, but they are a way of allowing those without access to funds from trade unions, companies, employers or others to bring or resist actions for defamation. I therefore hope that the Government will consider carefully—if not today, during the gap between the Bill leaving this House and its consideration in the other place—arrangements whereby those without funds can defend either their reputation or a defamation claim.

That said, I hope that the Minister’s speech will persuade the hon. Member for Stoke-on-Trent South that it is not necessary to press new clause 2 to a Division. I hope that we can take the Minister’s word that the matter will be given a lot more thought before the Bill reappears in the other place. Knowing my hon. Friend, I think that we can be reasonably sure that that will be the case.

[Paul Farrelly]

I support the comments of my hon. Friend the Member for Stoke-on-Trent South (Robert Flello) and the hon. and learned Member for Harborough (Mr Garnier), who I see is still plain “Mr Garnier” on the monitors.

It has been a long road to libel reform. For newspapers and other media, the real issue is cost. Responsible newspapers have been concerned about conditional fee agreements with 100% success fees and the sheer costs involved in such cases, especially as it seemed to be a case of “always win, double the fee”. Of course, we have heard examples where that is not the case: my hon. Friend cited the case of Dr Peter Wilmshurst, consultant cardiologist at Royal Shrewsbury hospital and our local University hospital of North Staffordshire, who needed that measure to be able to defend himself and give some certainty in a fraught situation to his family that, if he were to lose his case, all their worldly goods would not be forfeit.

Over time, proposals have been made, including by Lord Justice Jackson and my right hon. Friend the Member for Blackburn (Mr Straw), who laid a statutory instrument which was—almost uniquely—defeated by a cross-party ambush in Committee, because Members felt so strongly about the issues involved. In addition, the Culture, Media and Sport Committee, of which I am a member, produced proposals to limit the uplift in fees to 10%, rather than 100%, and not to recover after-the-event premiums—often, there is a false market in those premiums. I will put on the record now my belief that, in that report, we went too far, but our proposal was not to abolish an uplift, which would encourage lawyers to take on difficult cases, in their entirety. On the one hand, we are reforming libel law to protect responsible journalism, but on the other hand, we are potentially denying people access to justice, and I think the whole environment has become unbalanced.

What we have to remember, with phone hacking and Lord Leveson soon to report, is that we have a macho media world and some highly aggressive corporations. If we remove people’s ability to fight to restore their reputation, we risk giving a carte blanche to libel and going back to the bad old days when the only questions a newspaper asked were, “How much have they got? Can they afford to sue us?”

--- Later in debate ---

[Paul Farrelly]

The hon. and learned Gentleman makes a fine point. The purpose of my amendment, which I shall not press to a Division, is to probe the Government’s thinking. Other suggestions for amendments were made in Committee and some of those might reflect the judgments given in Reynolds more closely than paragraph (g).

Any decisions by lower courts can be appealed, but going all the way to the Supreme Court is very time-consuming and expensive. The purpose of my amendment 10 is therefore to get the Government to clarify what they mean by paragraph (g) and whether they have fully taken into account the most up-to-date case law, and to give them the opportunity to state to the House that there is no intention that the clause should be at odds in any way with how the “responsible journalism” defence has been developed by the courts over the years.

Amendment 11, which relates to subsection (2)(h), simply reflects the actual wording used by Lord Nicholls in his list in the Reynolds case, in which the court considered whether a newspaper might reasonably have delayed publication—for instance, to wait longer for a comment from the subject of an article—rather than going to press when it did. The concern in the legal profession about the current wording of sub-section (2)(h) is that it is neutral and does not capture the essence of the urge, or the urgency, to publish. It is a concern for weekly, fortnightly or monthly publications, for example, that withholding a comment can be used to try to ensure that a story does not appear in a particular edition. I shall pray the noble Lord Lester in aid again. Urgency appears explicitly in his list of factors that the courts may take into account. In his private Member’s Bill, he proposed that they may consider

“whether there were any factors supporting urgent publication”.

Amendment 12 is lifted word for word from Lord Lester. It is intentionally broader than amendment 3, which my hon. Friend the Member for Hayes and Harlington (John McDonnell) will speak to shortly. It also seeks to address a concern that was not addressed in Committee. Following the phone-hacking affair and the failure, yet again, by certain aggressive tabloids to put their own house in order, there is now a crisis of confidence in the press in this country. The Press Complaints Commission palpably failed over phone hacking, and in cases such as that of the McCanns. It is broken, and the “son of PCC” advanced by the industry to replace it looks all too much like the PCC itself. The mantra in the industry often seems to have been never to let the editors’ code of practice get in the way of a good story or good business. I am sure that, when Lord Justice Leveson reports next month, he will make similar damning judgments about the practices of the press, or certain parts of it.

The amendment seeks to give statutory recognition, if that is the right word, when newspapers are seeking to rely on qualified privilege, to the importance of journalists following a relevant code of practice—be it their own publication’s code, the editors’ code, one from a regulator or that of the profession. It also seeks to bolster the position of journalists. They are frequently asked by editors to do things that breach those codes: “Leave your morals at home or you’ll be colouring in the black squares on the crossword before we sack you” can instil genuine fear in many parts of the industry. Only editors and proprietors have been consulted on the proposals for the reform of the PCC; journalists have not. I believe that in striving for better quality journalism, we should give good codes of practice more weight. The amendment seeks to do that.

[Mr Edward Garnier]

I listened with the greatest possible care to what the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) said in moving his new clause, but I confess that I was either unconvinced or did not entirely understand the thrust of his argument. I am sure that that is entirely my fault. I also listened with care to the hon. Member for Newcastle-under-Lyme (Paul Farrelly), and I found him a little easier to follow. Both those contributions have persuaded me, however, that the amendments are not helpful to the wider debate. They have further persuaded me that, if we are to legislate, clause 4 is the way to do it.

Clause 4(2) proposes that, when determining whether a publisher has acted responsibly, the court may have regard to a list of factors, “amongst other matters”. The phrase “amongst other matters” reminds us of the words of Lord Nicholls in the case of Reynolds. His list of factors was non-exhaustive. In an ideal world, however, legislation is not the right way to go about this. The proposals in clause 4 are better to be found in the common law and in the development of case law. I appreciate that if courts are to develop the common law, that leads to a need for litigants to litigate, but such an approach provides necessary flexibility. By setting in stone clause 4, or another version of it, we will face the problem that it might not always be fit to deal with future circumstances. We are probably unwise to be doing that, albeit not so unwise that I would suggest removing clause 4 from the Bill. I do not think that we should have started from where we are, but I did not draft the Bill, and in so far as I had any influence on the people who did so, they sensibly ignored my opinion.