Libel Reform Campaign condemns attack on Defamation Bill

How can it be right that a company can claim libel damage – pursue it through expensive court proceedings and even take someone’s house to pay for it - and yet not be required to show that it actually happened?

Please write to your MP, to the Prime Minister David Cameron and Deputy Prime Minister Nick Clegg and urge them not to let the clause on companies be lost from the Defamation Bill.

A central plank of the campaign to reform libel law in England and Wales is under threat, as Conservative MP and former libel lawyer Sir Edward Garnier will try to remove a clause that would compel companies to show financial damage before they can sue for libel in a Commons debate on Tuesday 16th April.

The use of libel laws by companies to chill legitimate criticism and bully whistleblowers into silence is well documented. Action to stop this situation was recommended by two parliamentary committees and the House of Lords introduced a clause into the Defamation Bill that would go some way to stopping the bullying. This is now under threat.

The Libel Reform Campaign believes that the clause on corporations is already moderate: it does NOT prevent companies from suing for defamation but adds a hurdle so they must prove financial loss. It would also prevent private companies performing public functions from suing for libel, such as those running the transportation of prisoners, bringing them into line with restrictions already placed on public bodies.

Although the Government has acknowledged that companies use the libel laws to ‘chill’ criticism, it has dragged its heels on implementing any recommendations.  The Libel Reform Campaign is deeply concerned that the coalition Government will support Sir Edward Garnier’s amendment, or table their own, and overturn an urgent and much-needed reform. If the Liberal Democrats vote to remove the clause they would be contradicting their election manifesto commitment to restrict corporations from suing in libel unless they can prove harm. There is significant cross-party support for restrictions on corporations suing individuals for libel, with the Labour party backing the restriction, alongside Conservative Peer Lord Mawhinney, Conservative MPs David Davis and Peter Bottomley and a group of cross-bencher Peers.

Tracey Brown, Director of Sense About Science, said: "If there is genuine damage, why shouldn’t a company show that? If they can come up with a precise calculation of an amount that is enough to ruin someone and take their house, why can’t they say how they worked it out? This is a modest clause and yet it will effectively reduce bullying behaviour. Every parliamentary committee to look at this has recommended the Government to fix the problem."

Jo Glanville, Director of English PEN, said: "Companies do not have feelings, yet wealthy corporations routinely use the libel laws to silence any criticism, however slight.  It is reasonable to ask companies to show financial loss before they sue.  It is bizarre that the Government may not countenance even this modest restraint on corporations."

Kirsty Hughes, Chief Executive of Index on Censorship, said: "At present we have an absurd situation where local councils and government departments cannot sue citizens, yet the companies who win outsourcing contracts are free to censor people who criticise their performance.  The Defamation Bill has a sensible clause to correct this anomaly in the law. Why are Conservative MPs seeking to maintain the inequitable status quo?"

Simon Singh, science writer and defendant in BCA vs Singh, said: "The corporations clause is vital, and would have made all the difference in my case. The British Chiropractic Association would not have been able to show significant financial loss, so the case would have been thrown out. We have been campaigning for fair and reasonable libel reform for four years, and now Sir Edward Garnier is torpedoing some the best aspects of the Defamation Bill. I hope that the Government will not back his amendment or any similar amendments."

Whenever Parliamentary committees have examined the issue of libel, they have always recommended that corporations face some restrictions in their use of libel laws.  In 2011, the pre-legislative scrutiny committee chaired by the former Conservative Party Chairman, Lord Mawhinney, said:

... we favour the approach which limits libel claims to situations where the corporation can prove the likelihood of "substantial financial loss".

Lord Mawhinney has also said that large companies using the libel laws to protect their brands is a form of “bullying”.

The House of Commons Culture, Media and Sport Select Committee, Chaired by Conservative MP John Whittingdale, also recommended changes to the law.  Reporting in 2010, the committee cited the mismatch in resources between wealthy corporations and impecunious defendants’ and that a corporation to prove actual damage to its business before an action could be brought.’

Want to find out more about the Libel Reform Campaign? Visit our contact page.