Before I speak to the amendment that has just been moved, and to Amendment 8 which is tabled in my name and that of my noble friend Lord Browne and the noble Lord, Lord Lester, perhaps I may also pay tribute to the noble Lord, Lord Mawhinney, for his work as chair of the Joint Committee. The Minister will recall, because he was at the Fabian Society even before I was, that we produced a book entitled The ABC of Chairmanship written by Walter Citrine. It was a brilliant book, but I have to say that I feel that a small codicil should have been added to it, having served under the chairmanship of the noble Lord, Lord Mawhinney, which is this: see how he does it because that is the best way to do it. I learnt a great deal from him.
As the noble Lord, Lord Mawhinney, has said, that recommendation comes from the Joint Committee and is broadly supported, including by Liberty, the
Libel Reform Campaign, the Media Lawyers Association and Which?. As has been suggested, many of the cases which led to the pressure to reform of the law on defamation did not come from hurt individuals but from corporations, often using their deep pockets and access to lawyers to stifle public criticism of them or their products.
It was an American corporation that sued cardiologist Dr Peter Wilmshurst; the British Chiropractic Association sued Simon Singh; GE Healthcare sued Danish radiologist Professor Thomsen; Trafigura sued the BBC; manufacturers are forever threatening or trying to sue Which?; and McDonald’s infamously and, as it turned out, rather stupidly sued two individuals. Nature, the Lancet and the British Medical Journal—organisations that almost by definition exist for the public good—are no strangers to the threatening letters, mostly from corporations. Similarly, we heard in the Joint Committee from Mumsnet, which told us that it was very often the purveyors of baby foods and products, rather than individuals protecting their reputations as parents, which threaten to take action. It is often corporations which do not want negative reviews or sensitive information in the public domain that use this threat.
Yet the high cost of defending even a ludicrous claim brought by a corporation is an inequality of arms—or bullying, as the noble Lord, Lord Mawhinney, said. It is because a corporation can bring a claim where a defamatory statement is said to harm its trading or business reputation that a threat is all that is needed. The Joint Committee on Human Rights regretted the absence from the Bill of some reduction of the use of defamation proceedings by corporate claimants. Its view is that,
“businesses ought only to succeed where they can prove actual damage. The Bill should be amended so as to provide that non-natural persons are required to establish substantial financial loss in any claim”.
The report refers to the evidence of Professor Phillipson, who said that the failure to impose any restrictions on corporations’ ability to sue,
“renders the law on reputation inconsistent and incoherent. Defamation law and the protection afforded under Article 8 has developed on the basis that the protection of an individual’s reputation is a significant human rights issue. Corporate claimants have neither personal emotions nor dignity, and yet are treated as natural persons for the purposes of defamation”.
The report also quotes the Culture, Media and Sport Select Committee’s call for a new category of corporate defamation, by requiring a corporation to prove actual damage to its business before an action can be brought.
The Joint Human Rights Committee dismissed the MoJ’s refusal to countenance any change and concluded that,
“businesses ought only to succeed … where they can prove actual damage”.
Regrettably, as we know, the Government opposed a similar amendment to this in the Commons on the grounds that a corporation has a reputation, even where that does not affect its bottom line. We on this side accept that where damage to reputation affects the company's finances—for example, one can imagine an incorrect allegation that Perrier caused the current
vomiting virus that is going around and that that affects the sales and the future of that company—redress should be possible in such cases.
Our amendment is modest. It does not seek to take away all rights for companies to sue, but would merely require them to show substantial financial loss before they were able to start an action.