Defamation Bill: back in the Commons with a row about corporations

14 04 2013

house-of-commonsThe Defamation Bill is coming to the end of its long passage through parliament.  It received its “first reading” in the House of Commons on 12 May 2012 – presented by the then Justice Secretary, Ken Clarke.  On 16 April 2013 it will be back before the Commons on “ping pong” – the stage at which the Commons considers new amendments made by the House of Lords.  There were sixteen Lords Amendments. The Conservative MP and former Solicitor-General, Sir Edward Garnier, has been criticised for seeking to remove one of them – Amendment 2 “Non-Natural Persons”.

The clause in question reads as follows

(1) This section apples to an action for defamation brought by—

(a) a body corporate;

(b) other non-natural legal persons trading for profit; or

(c) trade associations representing organisations trading for profit.

(2) The permission of the court must be obtained in order to bring an action to which this section applies.

(3) 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 to the claimant.

(4) Non-natural persons performing a public function do not have an action in defamation in relation to a statement concerning that function.

This clause was inserted against government opposition at the Report stage.  The clause is curiously formulated – but its intention is clear: to prevent companies suing for defamation unless actual or threatened financial loss can be established.

The amendment appears to be based on a proposal made by the Joint Committee on the Defamation Bill in its October 2011 report.   There is, however, one significant difference – which may be due to a drafting error.   The Joint Committee made it clear that

“our proposal to introduce a test of “substantial financial loss” applies only to corporations or other non-natural legal persons that are trading for profit; it does not extend to charities or non-governmental organisations”.

However, clause 3 applies to “bodies corporate” – whether or not they are trading for profit and to “other non-natural legal persons trading for profit“.  In other words, it is necessary to amend clause 3(1)(a) to include the words “trading for profit” if the views of the Joint Committee on the Draft Defamation Bill are to be followed.

It should, however, be noted that the Government rejected [pdf] the view of the Joint Committee on the Bill on this point – which meant that it opposed clause 3 in the House of Lords.

This point was also considered by the Joint Committee on Human Rights which supported an amendment to the bill

“so as to require non-natural legal persons to show substantial financial loss. This requirement should be relative to the nature, size and scope of the claimant business or organisation”.

Clause 3 has one other strange feature,  clause 3(4) provides that “Non-natural persons performing a public function do not have an action in defamation in relation to a statement concerning that function”.   This is curious because this principle already forms part of English law, having been established 20 years ago in the case of Derbyshire County Council v Times Newspapers [1993] AC 534).  It is difficult to see why this principle needs to be included in the Bill at all.  Lord Lester is quoted in the Guardian as saying that he was most concerned about the attempt to change what became known as “the Derbyshire principle” .

“My view is that it is extremely important that this clause ought to be preserved … local authorities, like national authorities cannot sue for reputation

However, the deletion of clause 3(4) would not change the “Derbyshire principle” in any way – it would leave the common law position as it is, namely that public bodies cannot sue for libel.

There a number of other Lords amendments to be considered.  Least controversially, the “Puttnam” amendments – to bring certain Leveson recommendations into law – will now be removed, since this has been achieved via the Royal Charter and the Crime and Courts Bill.  These are Amendments 1, 15 and 16.

There is then the amendment to the defence of “Publication in the Public interest”, currently clause 6.  The relevant parts of this now read

(1) It is a defence to an action for defamation for the defendant to show that—

(a) the statement complained of was, or formed part of, a statement on a  matter of public interest; and

(b) the defendant reasonably believed that publishing the statement complained of was in the public interest.

Concerns have been expressed by Hugh Tomlinson QC on this blog that this would be easy to satisfy and would significantly weaken the protection of the right of reputation in English law.  This is on the basis that “reasonable belief in public interest” is a much weaker test than “responsible journalism” (the test currently applied by the Court of Human Rights as well as the courts of Commonwealth countries such as Canada, South Africa and Namibia).  It should be noted, however, that other commentators, such as Professor Mullis and Dr Scott (also writing on this blog) have taken a different view: to the effect that, under the new clause:

“The assessment of whether a journalist’s belief was reasonable would involve essentially the same analysis in terms of pre-publication behaviour as that which currently is applied under the Reynolds defence”

This view is also supported by the Joint Committee on Human Rights which noted, however, concerns expressed by Professor Phillipson of Durham University [pdf] to the effect that the new clause does not protect responsible journalism.

The uncertainty produced by the amendment to clause 6 is a matter of concern.  If it remains in place then it would be appropriate to have a “Pepper v Hart” statement to indicate that it is the intention of the Government that the new clause includes a “responsible journalism” requirement.

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15 04 2013
Law and Media Round Up – 15 April 2013 | Inforrm's Blog

[...] at which the Commons considers new amendments made by the House of Lords. As Inforrm noted here, in a post examining the detail of the Amendments, there were 16 Lords Amendments. Conservative MP and former [...]

16 04 2013
Law and Media Round Up – 15 April 2013 | Media law and ethics

[...] at which the Commons considers new amendments made by the House of Lords. As Inforrm noted here, in a post examining the detail of the Amendments, there were 16 Lords Amendments. Conservative MP and former [...]

17 04 2013
News: Defamation Bill, Commons reject amendment to limit ability of corporations to sue | Inforrm's Blog

[...] we pointed out in a post on Sunday, the version of the “Non-natural persons” clause inserted by the House of Lords did not [...]

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