My Lords, I have added my name in support of the amendment, which would reinstate a provision from my Private Member’s Bill preventing profit-making bodies from suing in defamation except where they can show substantial financial loss or the likelihood of it. As the noble Baroness, Lady Hayter, has indicated, it would extend the Derbyshire principle to bodies performing public functions. It does not seek to prevent companies from suing. It simply requires that they show harm where they feel it most—in the pocket. I do not believe that companies should not be allowed to sue for liable. They have no feelings but they and their shareholders are able to be hurt in their pocket book. If we were to bar companies altogether from suing, that would clearly violate the European Convention on Human Rights because it would be discriminatory.
That is why, in my Private Member’s Bill and in these amendments, I have supported the right of corporations and trading companies to sue provided that they can show actual, or the likelihood of, serious financial loss. As the noble Baroness, Lady Hayter, indicated, the Joint Committee on the draft Bill concluded:
“It is unacceptable that corporations are able to silence critical reporting by threatening or starting libel claims which they know the publisher cannot afford to defend and where there is no realistic prospect of serious financial loss. However, we do not believe that corporations should lose the right to sue for defamation altogether … we favour the approach which limits libel claims to situations where the corporation can prove the likelihood of ‘substantial financial loss’ … corporations should be required to obtain the permission of the court before bringing a libel claim.
This would encourage robust and decisive action by the courts to prevent trivial and abusive litigation from being commenced at all”.
Before I turn to the second limb of the amendment, I wish to make it clear that there is nothing to stop the directors or officers of a company from suing in their own right; it simply hampers the ability of the corporate body, the trading body, to do so itself. So it is conspicuously moderate and balanced and I hope that it will be acceptable to the Government.
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On the second limb, I argued successfully the Derbyshire case. Before that case was decided by the House of Lords, there was a previous, appalling, case of Edward Campion, a rate payer, who distributed a leaflet criticising the Bognor Council. The Bognor Council—not its councillors or officers—sued Campion, who could not have a lawyer. It won, and he was ruined for having distributed the leaflet criticising the council. That is a classical example of the citizen critic being destroyed by a libel action brought by a government body. In the Derbyshire case—the Law Lords overruled Campion—instead of Mr Bookbinder, the leader of the Derbyshire Council, suing for libel, the council sued, no doubt in order that he might avoid any liability in costs, to vindicate what it called its “governing reputation”. Many years before, in the South African case of Die Spoorbond, it was held that a railway company should not be permitted to sue for libel in respect of its public functions.
The amendment seeks to rationalise the Derbyshire principle, leaving the judges to apply it case by case. I agree that, in the end, it is a matter of judicial discretion in particular cases but the amendment is sound in the way in which it is expressed—that non-natural persons, that is to say, corporate and similar bodies performing a public function, do not have an action in defamation in relation to a statement concerning that function. That seems sensible in democratic terms as the officers of the company are able themselves to bring a claim. That is not the position in the United States where it is quite clear that neither the government company nor any public officers can bring a claim for libel. We are much more balanced than that and we allow public officers to sue to vindicate their individual reputations.
The amendment applies the common-sense of Derbyshire in statutory form. I do not understand the argument that the Law Lords in some way ruled in Derbyshire against this proposition. They did no such thing. They did not follow the Sullivan rule in a way that prevents individuals from suing, but made it quite clear that anyone performing a governing function as a corporate body could not sue for libel.
I hope that this second limb will be acceptable to the Government. The two limbs are united in these amendments but they need separate consideration. I support both of them.