Westminster Legal Policy Forum: reform of the law of defamation

Lord McNally's speech about the government’s plans for reform of the law of defamation following a public consultation.

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The Rt Hon Lord McNally

I am delighted to have been given the opportunity to talk to you today about the government’s plans for reform of the law of defamation following our public consultation and the pre-legislative scrutiny given to our Draft Bill by the Parliamentary Joint Committee chaired by Lord Mawhinney.

As you know, the government published its response to the Committee’s report on 29 February, and I would like to talk about some of the key issues addressed in that report and our response in more detail. However, before I do that I would like to re-emphasise our commitment to reform of the law. The right to speak freely and debate issues without fear of censure is a vital part of a democratic society, and the threat of libel proceedings should not be used to impede and frustrate that debate.

We believe that the law is currently not in the right place, and that a rebalancing is needed which offers more effective protection for freedom of speech and which prevents the threat of long and costly libel proceedings being used to stifle responsible investigative reporting and scientific and academic debate.

At the same time, it is also important that people who have been unjustly defamed are not left without effective remedies where their reputation has been seriously harmed. Our core aim throughout the reform process has been to ensure that the right balance is achieved, so that people who have been defamed are able to take action to protect their reputation where appropriate, but also so that free speech is not unjustifiably impeded by actual or threatened libel proceedings.

The importance and complexity of these issues has been demonstrated by the wide range of differing and carefully argued views which we received to our public consultation, and the thorough and extensive consideration given by the Committee to the Draft Bill. I am extremely grateful to the Committee and to all who have contributed to the debate.

I’d like to focus on some of the key issues which have emerged from the consultation and scrutiny process, and the government response on those. Firstly, we consulted on a new requirement that a statement must have caused substantial harm in order for it to be defamatory. Our aim in doing that was to help discourage trivial and unfounded claims from being brought by reflecting in statute the current law as articulated by the courts in a series of cases. However, the Committee and many consultation responses considered that a higher hurdle should be applied, and on reflection we agree.

We are concerned that the two-pronged test of “serious and substantial harm” proposed by the Committee would be likely to cause uncertainty and litigation over the meaning of the phrase. We consider therefore that a test of “serious harm” is preferable. It is important that trivial claims are not encouraged, and we believe that a serious harm test would set the bar at an appropriate level which would do this, but which would not be unduly restrictive on claimants’ rights.

Another area of great significance relates to responsibility for publication on the internet. This is a particularlycomplex area where we considered that it would be more helpful to consult in an open way than include provisions in the Draft Bill. We therefore sought views on whether the law should be changed to give greater protection to online intermediaries such as internet service providers, discussion forums and (in an offline context) booksellers, so that they are not placed in the position of having to remove material automatically on receipt of a complaint or risk being sued for libel.

Consultation yielded many very helpful and informative responses. This area also benefited from detailed consideration by the Committee on the Draft Bill. As the government response explains, we agree with the Committee and the majority of consultation responses that it is appropriate to give a greater degree of protection to both online and offline intermediaries. In the light of discussions with internet organisations, we believe that there are practical and technical difficulties with the system proposed by the Committee which would affect its workability.

Instead we prefer a system which would involve the online intermediary acting as a liaison point between the person complaining about a defamatory posting and the person who had posted the material, where the identity and contact details of the latter are not known to the complainant. Under this approach, provided the intermediary complies with a prescribed procedure aimed at enabling the complainant to pursue the author of the material where there is a dispute, then they will be protected from any liability. We are also considering how greater protection could be provided to offline intermediaries such as booksellers.

It is of course vital that the new system is as clear and comprehensive as possible to ensure that everyone knows what their rights and responsibilities are. Since publishing the response we have held extremely helpful discussions with internet organisations and other stakeholders to assist us in developing a detailed system for inclusion in the substantive Bill. We will also ensure that appropriate guidance on the new system is published prior to its being implemented.

Another key area which featured prominently in the Committee’s report was that of early resolution and cost control in defamation proceedings. In our consultation paper we sought views on a new preliminary court procedure to resolve key issues at an early stage. Those proposals received widespread support on consultation and we intend to develop them further so that the new system is brought into effect on a timely basis on passage of the Bill.

We believe that the new procedure - together with other aspects of the reforms such as removal of the presumption in favour of jury trial and steps to simplify and clarify the law and deter trivial claims - will have a significant impact in reducing costs and encouraging settlements. However, in addition to this, we agree with the Committee that more needs to be done to encourage alternative forms of dispute resolution such as mediation in defamation proceedings.

We will be giving careful consideration to the best ways of meeting this need in the light of the Committee’s views and other initiatives such as the Alternative Libel Project set up by Index on Censorship and English PEN, whose report is being published today. We will also of course need to take account of any recommendations relevant to this area which may emerge from Lord Justice Leveson’s Inquiry.

A core concern underlying our commitment to reform the law was to protect scientific and academic debate from the threat of unjustified libel proceedings. The Draft Bill contained a range of measures which will help to encourage open and robust scientific and academic debate. These include generally applicable measures such as the introduction of a harm threshold, simplification and clarification of defences, and a single publication rule, together with specific ones such as the extension of qualified privilege to reports of scientific and academic conferences. All of these will be retained in the substantive Bill.

In addition to those measures, we are also taking steps as recommended by the Committee to extend qualified privilege to peer-reviewed material in scientific and academic journals. We believe that this package of measures will provide effective protection and support for scientific and academic debate.

One area where strongly divergent views exist is the extent to which corporations should be able to bring an action for defamation. It is important to recognise that corporations do have reputations which deserve protection against defamatory allegations, and that the damage caused by such allegations can affect employees and shareholders of the company and even wider society – for example through pension fund investments.

We therefore share the Committee’s view that an absolute bar on corporations suing for defamation would not be appropriate, and such a bar could raise issues of compatibility with the European Convention on Human Rights. We also share the Committee’s view that it is the inequality of financial means that exists in some cases that lies at the heart of concerns over the ability of corporations to sue.

We believe that the package of measures we are taking forward both within and alongside the Bill will help to reduce the cost and length of proceedings and the scope for unjustified claims, and will lessen the likelihood of attempts being made by corporate claimants to intimidate defendants with limited resources. The Committee proposed that trading corporations should be required to show actual or likely substantial financial loss to bring a claim. However, in view of the fact that in practice corporations are likely to have to show financial loss in any event to satisfy the threshold test of serious harm, and for the other reasons set out above, on balance we do not believe that a specific provision in the Bill is necessary or desirable.

As I have said, our overarching aim is to achieve a fair balance between the interests of claimants and defendants. In this context, the Committee drew attention to the fact that most people who bring a defamation claim are more concerned about setting the record straight than about recovering damages. It recommended that the power for the court to order publication of a summary of its judgment should be extended beyond its current – very limited – availability in summary proceedings and should be available in defamation proceedings generally.

The Committee’s recommendation reflected the views expressed in responses to our consultation on the issue, and we intend to include a provision on this in the Bill. However, we share the Committee’s view that it would not be appropriate to give the court the power to order publication of an apology, as there would be no value in forcing a person to make an apology that may be neither meaningful nor sincere.

I believe that the process of consultation and pre-legislative scrutiny that we have been able to follow has been of great benefit in enabling a wide range of views to be expressed and carefully considered in a thorough and open way. I am grateful to everyone who took part in that process, and will be very interested to hear from the different perspectives represented today on the conclusions that we have reached.

The detailed consideration that has taken place will put us in a good position to legislate as soon as Parliamentary time becomes available. I hope that this will happen soon, and that we can take forward this much needed reform to achieve a better balance in the law that gives people protection against being defamed without threatening freedom of speech. Thank you.

Published 15 March 2012