My Lords, there are good reasons for the amendment, which I think is probably one that the Minister, before he departs, is likely to agree to, even if he does not agree with our specific drafting.
The first reason draws on the Derbyshire case. While that matter concerned the propriety of certain investments made by the local authority from its superannuation fund, the House of Lords determined that a democratically elected body, including a local authority, and indeed any public authority or organ of central or local government, should be open to uninhibited public criticism and therefore should not have the right to take action for damages for defamation.
Thus, public authorities are barred from using libel by what is known as the Derbyshire principle—a precedent established in the case of Derbyshire County Council v Times Newspapers Ltd in1993, whereby a government authority cannot sue for libel. However, other authorities have sought to get out of that excuse, presumably because they were not elected. For example, the Olympic Delivery Authority appeared to be one such authority when it accused a citizen journalist of,
“serious, false and defamatory allegations”,
against it, perhaps because it was not elected.
However, elections apart, there are other good reasons why a public authority should not be able to sue. One, of course is that it is a body corporate and thus, under my earlier amendment should be debarred from such a course, unless it could show financial loss. However, that would not be possible for a public authority, given that all of us pay its levy, whether it is known as rates, the community charge or anything else. Another reason is the comparative resources of any government body compared with those of an individual—the “David and Goliath” situation that was referred to earlier.
However, a third issue, which until recently was of central importance, given the number of services provided by local authorities, was that they were a monopoly—effectively for education, but actually for street cleaning, social care, parking, and a host of other services. Therefore, not only did any damaged reputation not dent their market, but publicity was really the only driver for improved care or access to redress because users could not take their custom elsewhere.
However, it will not have escaped the Committee’s notice that the world has changed. Not only do we have free schools in competition with those run by local authorities, but the voluntary sector runs many services on behalf of, and paid by, public funds. Increasingly, the private sector, driven by a profit motive, is also a big player in public service provision. Therefore, first, users need to be able to comment on those services without fear of action. Secondly, ratepayers and taxpayers must similarly be able to comment without fear of action. Thirdly, given that most such services are now won through competitive tendering, it seems extraordinary that, in compiling their bids, private or voluntary sector bidders can say anything about those against whom they might be bidding—in other words, the local authority—but are in a position to take action if the local authority, or indeed any of its service users, says a word about them that they do not like. If a local authority school, for example, is competing with a free school, the free school could say more or less anything it liked about the local authority school, and the local authority school could have an action taken against it.
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This is not a small matter. Public service commissioning employs 1.2 million people. Some of these services cater for the most vulnerable in society. Nearly 5,000 children are in children’s homes, where there have been allegations of young girls being drawn into the sex trade and issues of duty-of-care loom large. We all know well about the Winterbourne View home and the care of many frail residents. Is Winterbourne to be protected by being able to reach for the defamation threat?
According to War on Want, even DfID is now seeking to privatise aid to Africa by using offshore trusts. That may or may not be the case but if such a trust was involved, would War on Want be able to hold it to account in the way that it can DfID? The UK Border Agency recently issued £1.7 billion-worth of contracts for asylum-seeker services, including accommodation. All eight contracts went to just three companies; namely, G4S, Serco and Clearel. Are these providers spending taxpayers’ money on sensitive services really to be protected from criticism by being able to hide behind the threat of defamation action? Just last week we read of G4S evicting a pregnant asylum seeker from her home, even though it was aware that she was being induced to give birth that day.
I have no idea of the truth or otherwise of that allegation but it is important that such allegations can get a hearing without an action for defamation arriving in the post the next day. This is not to defend inaccurate stories. It is to realise that the threat of action does not
mean that the story is defamatory. It can often be the easiest way to silence a critic. Another example is Applied Language Solutions, owned by Capita, which supposedly has been providing court interpretation services. Surely it is right that we can hear questions about its standards without its lawyers bullying commentators into silence.
Our amendment would cover only those parts of a corporation performing a public function. Thus, Virgin Care would lose its right to sue over its commissioned work of public services, but Mr Branson could still protect his brand’s name where Virgin’s profitability was at risk in other areas.
In the Commons, the Government rejected this idea on the rather limp excuse that the court in the Derbyshire case had considered and rejected it. However, that was 10 years ago when outsourcing was a fraction of what it is now and when the effects of competitive tendering had yet to be fully understood. Even more importantly, why do a 2012 Government who have pledged to update our defamation laws feel bound by the ruling of 1993? New legislation, surely, is exactly the time to make good any shortfall in the law.
The Derbyshire case led to the upholding of the need for uninhibited public criticism of public authorities, which we must all welcome. However, it is time to extend this to corporate bodies carrying out those very same public services as were once the purview of public authorities. I beg to move.