The draft Libel Reform Bill is a good thing

Why the proposals should be welcomed.

The draft Libel Reform Bill, published two days ago, has had a mixed reception. Those in favour of libel reform have broadly welcomed it, though some do not think it goes far enough; and many established libel practitioners have sought to minimise the draft bill's importance and novelty. Some libel veterans even say it will make no difference: it is almost as if they are discouraging the government from taking the draft bill forward at all.

However, as a practising media defence lawyer, I would say that there is a lot of good in the draft bill, and that if it were to pass into legislation in its present form it would make a marked difference to the nature of libel litigation. That is not to say that the draft bill could not be improved; but it is to say that it is misconceived and illiberal to dismiss the bill completely.

Let us start from first principles. One problem with libel litigation is that it is far too easy to bring a libel claim and thereby to threaten plausibly to bring a libel claim. This is one of the main causes of "libel chill". As it currently stands, libel is one of few areas of law where the claimant does not have to show any damage at all to threaten or actually bring a claim: damage is presumed. Until fairly recently, the courts used to allow claims where there had been no actual damage to proceed to full trial: the claimant could then get nominal damages of a penny or a pound, and may have to pay the defendant's legal costs, but there was nothing in principle preventing the claim running its full expensive course.

This complacent approach has shifted over the last few years. The courts are now more willing to allow a defendant to strike out a claim as an abuse of process where there has been little or no damage. But it is still for the defendant to make that application and at his or her own costs risk. It is not for the claimant to show there is substantial damage to the reputation, but for the defendant to show there has not been substantial damage.

The proposed clause 1 of the draft bill addresses this problem head on in a satisfactory and subtle way. By introducing a requirement that the claimant has to show substantial harm, the draft bill is in effect reformulating the tort of libel. Some established claimant lawyers are saying this will lead to more expense because of futile debates about whether there is substantial harm or not. I do not think this will be the case. It is more likely that the same lawyers will have to explain to their clients why claims cannot now be threatened because of this new requirement. Indeed, one may say that if a claimant and their lawyer thinks it is open to genuine dispute whether an alleged libel has not caused (or is not likely to cause) substantial harm, then they have no business to bring or threaten a claim in the first place.

The substantial harm test set out in clause 1 of the draft libel bill is a liberal and constructive provision, and one should be rather sceptical of the libel claimant lawyers who say it is not really needed. It is common sense that potential libel claimants should be required to show substantial harm before they can even threaten a libel case: at a stroke it weakens the might of heavy-handed "reputation management" lawyers who somehow appear to think that using legal threats is a legitimate form of pubic relations.

Equally significant, if not more so, is the proposed abolition of the presumption of a jury trial. Again, established libel lawyers will seek to downplay the importance of this provision. And it is indeed correct that jury trials are now infrequent. However, the effect of there being usually a jury trial at the end of the litigation process forces parties into years of complex and expensive interim litigation, as applications are made for striking out parts of the claim and the defence that will eventually go before the jury. Moreover, rulings on each of these interim applications can then be appealed by the losing party, sometimes all the way to the Supreme Court (formerly the House of Lords).

The mere fact of defamation cases having an eventual jury trial makes pre-trial proceedings more costly and elaborate than they need to be. Bringing them to an end will have a beneficial effect on libel litigation generally.

The proposal for a statutory public-interest defence should also be welcomed. However, the draft bill makes this defence more elaborate than it needs to be. It should be enough that the publication was on a matter of public interest and was published without malice: after all, the United States seems to manage with libel law being on a restricted basis without any grave problems. The draft bill, however, subjects the proposed public interest defence to a non-exhaustive checklist of matters to which the court should have regard. Some of these factors are common sense; however, the risk is that the courts will apply these factors in a formulaic and pedantic manner without any regard to the overall purpose of a public-interest defence.

There are other good parts to this draft bill. The "truth" and "honest opinion" defences are not merely cosmetic changes to the old "justification" and "fair-comment" defences as has been asserted by some commentators. Instead, the old defences are expressly abolished. Therefore, these new statutory defences will not necessarily be suffocated by the case law of the old defences; indeed, deployed sensibly by the courts, these new defences could mean that truth and honest opinion are full defences to any claim, unencumbered by the complexities of the current common law defences. And the proposed single-publication rule will bring certainty and sanity to libel litigation: no longer will each download constitute a fresh tort and the basis of a new libel claim.

The draft bill could be better. For example, one hopes the consultation period will address issues such as the capability of corporations to sue for libel. The issue of costs also have to be dealt with, though that will be done by other costs-specific legislation.

But, for me, the tests of this draft legislation are simple. Will it make it harder for a libel (or "reputation management") lawyer to advise his or her client that a spurious claim can be threatened? Will it make libel litigation less expensive and complex? Will it make it easier for defendants to point to complete defences when threatened? And will it make it easier for statements to be published on matters of public interest without the adverse effects of "libel chill"?

On each of these questions, the answer is cautiously affirmative. But the draft bill is not a default position: it is certainly not the case that this is what will be passed into law unless it can be improved. There is a real risk the established libel claimant lawyers will persuade the government that no legislation is really needed, other than in respect of making libel litigation cheaper to bring. In other words, after years of campaigning, there still may be no legislative change to libel law and procedure.

All this said, this draft Libel Bill is a great step forward. It is important that all right-minded people press for improvements; but it is also crucial to recognise that even these modest reforms are still up for grabs.

 

David Allen Green is legal correspondent of the New Statesman and is a practising media lawyer. His Jack of Kent blog chronicled the libel defence campaign of Simon Singh, 2008-10.

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.