17.10.2013
Leveson, libel and lucre
The overall result of the combination of Leveson and the Defamation Act is a major attack on freedom of speech and communication, argues Mike Macnair
The past 10 days have seen a flurry of media comment about press regulation, triggered by the privy council’s adoption of a draft royal charter for press regulation put forward by the government (in response to the Leveson inquiry and the ‘Hacked Off’ lobbying campaign) and rejection of the alternative draft proposed by the press.
The purpose of the exercise seems to be to increase judicial control of the press, and thereby to increase the ability of corporations and the rich to control their public images - but to do so while retaining intact the system of grossly inflated legal fees in defamation, which both deters open criticism of those with ‘deep pockets’, and allows the media to continue to victimise those who cannot afford the top lawyers.
The pattern is one which has characterised ‘reform’ for many years now. Every step to increase judicial power carries with it increased corruption and plutocracy, via the ‘free market in legal services’. This particular ‘free market’ is better described as an institutional system of bribery of the lawyers, the professional gatekeepers of justice. But the obvious corruption of politics and the media in itself tends to generate illusions in the concealed corruption of the legal system, producing more judicialisation, in turn producing more corruption in a descending spiral.
The whole process is a striking example of the normal functioning of the modern British constitution. This is in essence plutocratic: a joint-stock or business corporation of British taxpayers in proportion to their wealth, with special arrangements for the state’s creditors. MPs represent not their voters, but contributors to party funds and/or lobbyists in proportion to the money they stump up. Newspapers represent their advertisers.
The British constitution is not (as the media claim it is) ‘democratic’. Nor is it ‘bourgeois democratic’ - meaning democratic, but parliamentary, not based on workers’ councils (as according to common far-left views).
Nor, yet again is the British constitution actually monarchical in any very strong sense (as in views commonplace on a section of the left in the 1980s and still held by comrade Steve Freeman and his co-thinkers): the oath of allegiance to the queen taken by soldiers, the police, etc gives her a reserve power in the constitution, not a major role in routine state and political management. In the present case of press regulation, the use of ‘royal charter’ and the (queen’s) privy council (a committee composed of government ministers, ex-ministers, some senior judges, etc) is merely part of the obfuscation of the scheme.
In this particular case there is an unusual degree of legal obfuscation. The charter is to create a quango, which will not itself directly regulate the press. Rather, it will approve sub-quangos (yet to be created), which will be the actual regulators. The scheme also involves the interaction of three recent acts of parliament - the Defamation Act 2013, Crime and the Courts Act 2013 and Arbitration Act 1996 - and the relationship of the Defamation Act 2013 with the pre-existing ‘common law’ of defamation (in particular libel).
It may be guessed that the object of the layers of obfuscation is to try to trick the judges of the European Court of Human Rights at Strasbourg into believing that the scheme is not a violation of the right of freedom of expression under article 10 of the 1952 European Convention on Human Rights:
Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers ...
Or, since it is almost certain that the scheme will be litigated to the Strasbourg court as soon as it comes into operation and the issue has dragged its way through the English courts, that it falls within the (broad!) provisos to that article:
The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or the rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.
Alternatively, the point may be that the layers of obfuscation allow the non-celebrity supporters of Hacked Off to imagine that the scheme will set up a system of redress which will not be subject to the ‘wealth advantage’ which exists in ordinary litigation. The ‘sting’ or ‘small print’ on this issue is buried at p21 of the 23-page draft royal charter.
Either way, the level of legal obfuscation here requires a lot of digging if we are to get at the politics of the issue.
Background
The background to the new ‘reform’ has two sides. The first will be familiar to readers of this paper: the ‘phone-hacking’ scandal, and the 2007 smears against the McCanns and 2010 smears against Chris Jeffries in connection with the murder of Joanna Yeates, both resulting from selective information-sharing (or information-trading) by elements in the police. In the phone-hacking scandal, the Press Council, the press’s self-regulation watchdog, in 2009 condemned The Guardian for ... exposing the activities! The result was the Hacked Off lobby group, the Leveson inquiry and his November 2012 report, and a number of ongoing prosecutions; and thus, indirectly, part of the current proposals.1
The second, which is considerably more long-running, is the peculiarities of the English law of defamation: libel if the output is in permanent form or broadcast; slander if it is spoken.
This will also be a lot more unfamiliar to most readers. This paper has had a recent expensive encounter with the libel laws as a result of carelessly printing a story which turned out to contain a false, defamatory imputation, for which we apologised, paid damages and (higher) costs. In our discussions of what to do about the complaint, comrades displayed marked ignorance of the law. I will not say that I was surprised or shocked by this, since in the first place I already knew that it is a feature of post-1945 British society that the educated lay public in general has a much weaker understanding of any part of the law than was the case before 1939 and, secondly, even many lawyers are unfamiliar with this particular branch, which is commonly left out of the teaching of ‘torts’ (civil wrongs).
The result, however, is that rather a lot of legal explanation is needed to reach the political points.
Defamation consists of publishing a statement which tends to lower the plaintiff’s reputation among ‘right thinking people’. The imputation does not have to be direct: for example, in Cassidy v Daily Mirror (1929) the newspaper published a photograph of a married man with a woman described in the caption as his “fiancée”. His wife successfully sued for libel: the photograph and caption impliedly suggested that she was engaged in extramarital sex with her husband. It should be apparent from this case that it is extraordinarily easy to defame someone by mistake. In slander the claimant generally, though not invariably, has to prove actual damage, but in libel this is not necessary. The origin of this rule is in libel’s connection at its origins, around 1700, to criminal libel, and its censorship role, though modern lawyers give it a variety of spurious apologetic justifications.
Defamation is ‘strict liability’, meaning that the claimant does not have to prove malice, bad faith or even carelessness. Instead, there are a series of defences available, which the defendant has to prove to avoid liability. These, and their names, have been modified by the Defamation Act 2013: the main ones are now ‘truth’, ‘honest opinion’, ‘publication on a matter of public interest’ and ‘privilege’ (we will have to come back to some of the details later).
The effect of this structure of ‘strict liability’ plus pleadable defences is the development of a very elaborate body of law about what can be pleaded or alleged in the court proceedings, and how - of a type which in other areas was abolished in 1854. In this system the parties lawyers’ manoeuvre to trap their opponents in untenable positions.
This leaves defamation proceedings, which retain the old structure of pleadings, governed by tactical arms races between the lawyers. The pleading structure is foreign to most modern lawyers and, together with the fact that defamation is not widely taught in law schools, this produces the result that there is a small expert sub-group of lawyers who can handle defamation proceedings effectively.
This de facto cartel allows extraordinarily high legal fees to be charged - it should be said that all legal fees in the UK are unusually high compared to many other jurisdictions to start with. The 2010 Jackson review of civil litigation costs found average defamation costs to be around three times the damages recovered, and - for a single comparative example - costs estimated in England on two hypothetical claims five times higher than those estimated in Ireland, which has a similar legal system.2 A 2008 Oxford Centre for Socio-legal Studies comparative study of defamation costs and litigation funding in 12 European jurisdictions found:
England and Wales was up to four times more expensive than the next most costly jurisdiction, Ireland. Ireland was close to 10 times more expensive than Italy, the third most expensive jurisdiction. If the figure for average costs across the jurisdictions is calculated without including the figures from England and Wales and Ireland, England and Wales is seen to be around 140 times more costly than the average.3
Political and controversial
A United States court in 1997 characterised English libel law as contrary to US public policy and inconsistent with applicable human rights standards (with the result that an English libel judgment was not enforceable in the US).4 This is not a novelty: the abusive character of the rules of English libel law has been a matter of political controversy since quite shortly after the tort was created (it appeared around 1700, as a substitute for the statutory system of press censorship which lapsed in 1695, and was already controversial by the 1730s; slander is a couple of centuries older). In the later 1700s notorious judicial bias in favour of government led to a battle for the right of juries to decide whether allegations were defamatory, won in Fox’s Libel Act 1792.
Coming a lot closer to the present, in the 1960s-70s there was controversy about the use of ‘gagging injunctions’ especially by financial fraudsters who could use corporate funds to litigate. Wallersteiner fled overseas the day his gagging injunction was overturned by the court of appeal in Wallersteiner v Moir (1974); the fraudulent company controllers in Bryanston Finance v De Vries (1976) were able to keep theirs in place until they had finished stripping the company’s assets.
As a result of this history, applying for a pre-trial injunction in defamation cases can now damage the claimant’s reputation, with the result that courts have invented ‘super-injunctions’, which prohibit even mentioning their existence. Eighteenth century lawyers and politicians, who were not exactly friends of free speech, would have seen super-injunctions as an intolerable and unconstitutional extension of the equity jurisdiction, and a judge who introduced them might well have been impeached. It is even quite likely that the judges of the old court of Star Chamber, who were openly hostile to the idea of free speech, would have regarded secret applications as an oppressive abuse of the process of the court (which was abolished in 1641). The 2011 controversy about super-injunctions was thus rather mild.
Libel costs were equally fundamental in the ‘McLibel’ trial of Greenpeace activists who defamed McDonalds - the case lasted from 1987 to 1997 and ended in a pyrrhic victory for McDonalds. In Steel and Morris v UK (2005) the Strasbourg court decided that the McLibel defendants had been denied a fair trial, contrary to article 6 of the convention, and their free speech rights under article 10 had been violated, by the lack of “equality of arms” in the trial: ie, because, having been denied legal aid, they were forced to defend themselves without legal assistance. (It now turns out that the libellous leaflet was co-written by a police provocateur ...)5
Probably the most significant trigger of the 2013 Defamation Act was British Chiropractic Association v Singh (2008-10), where the association sued journalist Simon Singh for claiming that it was promoting “bogus” treatments, eventually losing in the court of appeal on the ground that the statement was “fair comment” (now “honest opinion”). Singh’s costs alone were by that time £200,000. The case gave rise to a backlash, and commitments in the 2010 elections from all the main parties to legislate on defamation law, and the bill which became the 2013 act was introduced in the Lords in May 2012.
But what the political parties say is never the end of the story in legislation. The parliamentary draftsman’s office, staffed by lawyers, intervenes - and its view is that part of its remit is to minimise changes in the law by legislation. The 2013 act makes rather marginal changes to the law of defamation, and may well have the indirect effect of reducing the scope of the available defences and - because it is new legislation - legitimising the rewritten but continued basic structure of the law, and hence the excessive fees and costs involved.
Leveson
The scheme in progress is an implementation of the Leveson report. The gist of Leveson’s argument was that in the wake of the phone-hacking scandal, and so on, press self-regulation in the form of the Press Complaints Commission had palpably failed: it was plainly biased in favour of newspapers, its adjudications had no teeth, and it had failed to engage in any pro-active regulation to enforce its own code of practice. He rejected the idea that, since the conduct complained of was criminal, the problem was a failure to enforce the criminal law.
His solution was a beefed-up form of “self-regulation”, the effect of which would be to substantially judicialise the system. In the first place, requirements would be put in place which made the regulators more independent of the press. In the second, the papers would be contractually bound, and the complaints scheme would have the power to impose substantial financial penalties.
The problem Leveson foresaw with this scheme was that some newspaper proprietors might not be willing to participate on these terms. The Express group already withdrew from the existing Press Complaints Commission in January 2011.
Leveson’s solution to this problem was to provide carrot and stick. Both carrot and stick would operate through the assumed continuance of grossly excessive costs in libel and related proceedings. They worked through the legal costs rules. Usually, the winner of legal proceedings gets their costs paid by the loser. Under Leveson’s proposal, the winner of proceedings in court would lose their costs if there was an available ‘authorised’ ‘self-regulation’ remedy which had not been used. Thus the press, so far as it signed up to this ‘self-regulation’, could insist on complainants who went to court losing their costs even if they won in court (the carrot); but conversely, if papers failed to sign up to the new system, they would lose their costs even if they won in court (the stick).
It should be obvious that if court costs in defamation and related proceedings came down to reasonable levels, neither the carrot nor the stick would have a very powerful impact. Leveson’s scheme was thus predicated on court costs in defamation remaining unreasonably high for the foreseeable future.
In February 2013 Hacked Off’s supporters in the House of Lords ‘ambushed’ the government by inserting an amendment to the Defamation Bill to introduce the Leveson scheme into it. There was, at first, a real chance that the whole bill might be lost; but a deal was reached, under which the Lords amendment was dropped, and the Leveson proposal was instead placed in the Crime and the Courts Bill then in progress. This might be called a ‘tack’ (anti-democratically adding irrelevant material to a bill, in order to allow it to pass into law without proper debate), were it not for the fact that the Crime and the Courts Bill was already an equally anti-democratic ‘omnibus’ or ‘portmanteau’ bill (containing several unrelated subjects, in order to avoid proper debate on at least some of the proposals).
The result in the final act is sections 40-41 and schedule 15, the latter excluding a short list and a limited class of publishers from “relevant publishers”. An additional small ‘carrot’ for the press is provided by sections 34-36, regulating the use of “exemplary damages” (to punish the defendant) in press cases, for most purposes prohibiting them if the defendant is a member of an “approved regulator”. Section 40 (2) provides that if the defendant was a member of an “approved regulator” the court must not award costs against the defendant unless (a) the claim could not have been resolved through an arbitration scheme (the carrot) or (b) “it is just and equitable in all the circumstances of the case to award costs against the defendant” - a very large, indeterminate class. Section 40 (3) provides the equivalent ‘stick’: if the defendant was not a member of an approved regulator, but could have been and it would be “reasonable in the circumstances” to have been, the court must award costs against the defendant, subject to the same exceptions.
Section 41 defines “relevant publisher” as someone who publishes “news-related material” written by different authors and subject to editorial control; subject to exceptions provided in schedule 15. Under section 42 (7), “news-related material” includes news, information or opinion about public affairs and gossip about celebs. Schedule 15 provides the exclusions from this broad definition. These are: broadcasters (who are separately regulated); “special-interest titles” (trade and hobby journals which carry only incidental news); scientific and academic journals; public bodies and charities; company ‘house journals’; and “micro-businesses”, a category which in spite of the broad subhead is actually limited to multi-author blogs published for business purposes and only carrying incidental news, where the business has fewer than 10 full-time equivalent employees and less than £2 million turnover; and book publishers.
It is important to be clear about the effect of these provisions. Objections were made at the time of the Leveson report, and again at the time of the Lords ambush in February, to the fact that the proposals - based on the abuses of the oligopoly mass-circulation press - would force small-circulation papers (like the Weekly Worker) and even political bloggers (like ‘Guido Fawkes’ among many others) to sign up to whatever replaced the Press Complaints Commission. This is exactly what the section and its narrow exclusions have done: no concessions have been made in response to the objections.
The result will be in effect a reinvention of newspaper stamp duty, operated between 1712 and 1855 as a means to try to drive small, dissident papers out of business. The new form of mandatory subscriptions to the “approved regulator” will operate in the same way, because the regulator’s costs will arise mainly from the activities of the mass-circulation press, but its burdens will be distributed to all publications.
In addition, the draft charter then contains a real sting in the tail. Under the recognition criteria for the direct regulators (schedule 3, clause 22, p21) the “arbitral process” must comply with the Arbitration Act 1996. Under section 21 of that act, unless the parties - ie, both parties - otherwise agree, “a party ... may be represented in the proceedings by a lawyer or other person chosen by him”. The scheme may thus limit recoverable costs (section 63), but cannot limit actual expenditure on lawyers. The result is to introduce into the arbitration scheme the ‘wealth effect’ or ‘deep pockets wins’ ‘inequality of arms’, which exists in ordinary legal proceedings. For this reason, section 91 of the 1996 act makes compulsory arbitration agreements in consumer contracts invalid, as they are deemed unfair where the claim is a small one.
The 2013 House of Lords ambush supposed that a quid pro quo for introducing Leveson’s ‘reform’ could be seen in the Defamation Bill liberalising the law of defamation. In fact, there is no such thing.
Defamation Act
It is pretty clear that in the wake of the Singh case the politicians did, genuinely, agree that something serious should be done in the way of defamation reform. They thus intended there to be a substantive reform; unlike some other cases, where it is clear that the politicians intend only that something should seem to be done.
What has in fact happened, however, is a statutory restatement of parts of the existing law - which may be hoped will give it new legitimacy - with some tinkering at the edges. This observation does not require deep legal analysis. It is, in fact, completely transparent from the ‘Explanatory notes’ provided with the act, though it is necessary to run through some of the details of the main provisions.6
Section 1 (1), requiring “serious harm to the reputation of the claimant”, “builds on” Thornton v Telegraph (2010) and Jameel v Dow Jones (2005). Section 1 (2), the government’s response to attempts during the passage of the bill to limit the right of corporations to sue for defamation, requires the defamatory statement to be “likely to cause serious financial loss” to the corporation. It is clear that this will very rarely be an obstacle. Widespread belief in the allegations of fraud in Wallersteiner v Moir and Bryanston Finance v De Vries would certainly have caused the companies in question serious financial loss: though, as it happens, since the allegations were true but not capable of being proved, preventing publication caused the companies worse financial loss. Again, if the allegations in the McLibel case had come to be widely believed, McDonalds would have suffered serious financial loss.
Section 2 on the defence of truth “reflects the current law”. Explanatory note 18 states: “In cases where uncertainty arises the current case law would constitute a helpful but not binding guide to interpreting how the new statutory defence should be applied.”
Section 3 on “honest opinion”, again, “broadly reflects the current law while simplifying and clarifying certain elements, but does not include the current requirement for the opinion to be on a matter of public interest” - though this requirement was already substantially diluted by the supreme court in Joseph v Spiller (2010). In one respect, the section follows Joseph v Spiller in narrowing the defence relative to BCA v Singh and rejecting the older House of Lords decision in Kemsley v Foot (1952): by requiring that “the statement complained of indicated, whether in general or specific terms, the basis of the opinion”. (In Kemsley v Foot, a Tribune headline about Beaverbrook, ‘Lower than Kemsley’ was attacked as a libel on Kemsley, and held to be fair comment, the only ‘factual basis’ needed being that Kemsley published newspapers. The judges in Joseph v Spiller cast doubt on the decision.)
Section 4 on “publication on a matter of public interest” “is based on the existing common law defence established in Reynolds v Times Newspapers [2001] and is intended to reflect the principles established in that case and in subsequent case law”. And “While abolishing the common law defence means that the courts would be required to apply the words used in the statute, the current case law would constitute a helpful (albeit not binding) guide to interpreting how the new statutory defence should be applied. It is expected the courts would take the existing case law into consideration where appropriate.”
Section 5 does formally change the law, by providing a defence to website operators who did not themselves post the material on the site - but only if, should a complaint be made to them, they can provide the complainant with sufficient information about the author to let the complainant bring proceedings against the author. Though the details are left to be provided by regulations, it is already clear that this defence will never or very rarely be available, unless website operators are routinely to demand names and addresses from all those who post or comment, and check these up.
Section 6 provides a new defence of ‘privilege’ for statements in academic, peer-reviewed journals. It is defeated, like other ‘privilege’ defences, if the statement is proved actuated by malice. This is a useful but rather marginal reform, since litigation in this context is rare.
Section 7 extends and elaborates the existing statute law which gives defences of “absolute” privilege (not defeated by malice) to statements in court, and “qualified” privilege (defeated by malice) to various reports of events. In recent years a useful, broader common-law defence of “reportage” had emerged to cover the gaps in statutory “qualified privilege”. It seems likely that this development will be blocked by those extensions.
Section 8 applies a “single publication rule” for the purposes of limitation of actions (defamation actions must usually be brought within a year of publication). This is also a useful reform.
Section 9 aims to block ‘libel tourism’ by limiting the jurisdiction of the court to hear claims against persons not domiciled in the UK or EU, “unless the court is satisfied that, of all the places where the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action”. The section does not prevent counsel from arguing or the court from deciding that England’s more claimant-friendly libel law makes England “most appropriate”. Section 10 blocks action against printers and distributors, etc, “unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher”. Again it is unclear what “not reasonably practicable” means, and will presumably be open to counsel to argue that the lack of financial resources of author, editor or publisher justifies proceeding against printers, distributors, etc.
Section 11 abolishes the presumption of trial by jury. In practice, parties have in the last few years commonly elected for trial by judge alone, for reasons of costs (the modern mode of conducting jury trial, without time limits, is grossly expensive). But the effect is to finally repeal Fox’s Libel Act and for the judges to get back the power of the 18th century judiciary to enforce their biases in defamation cases. It is to be expected that they will use this power in the same way.
It is possible to simplify the law by codification, and thereby - at least for a time - to reduce costs. But this is not what the act of 2013 has done. This act claims, mostly, to state existing law, and the ‘Explanatory notes’ encourage reference to existing law. It is as if the Theft Act 1968 (which did codify the law of theft) had allowed continued use of the case law under the common and statute law of larceny, which the 1968 act replaced. The lawyers have got what they wanted - continuation of the existing law with a little tinkering round the edges.
They have probably also got a degree of increased legitimacy for the existing law. The Obscene Publications Act 1959 was followed for a while by an increase in convictions; similarly, the Sexual Offences Act 1967, which legalised homosexual conduct under restrictive circumstances, was followed by an increase in convictions.
If - as I think they probably did - the politicians wanted something real to be done about defamation, they did not get it. They did not get it because of the strength of the legal professional lobby, and the degree of lawyer control of the drafting process in parliament. This in turn is related to a point I made much earlier in the article: public ignorance of the law, extending to ignorance of the law among those legislators who are not themselves part of the professional lobby. Behind this ignorance is, it seems clear from the evidence of presence and loss of lay legal knowledge, the effective abolition of civil trial by jury in general after 1945.
Hacked Off has, on the face of it, got what it wanted - implementation of Leveson. But the sting in the tail of the royal charter means that this will only be in the interests of corporations, the rich and celebs. It turns out that the interests of the funders of lobby groups is what is advanced, not the ostensible aims of the group. The same interests lie behind the excessive fees charged by lawyers: it is an underlying principle of the English legal profession that there should in litigation be inequality of arms and deep pockets should win. The tyranny of the lawyers means the tyranny of their paymasters.
The overall result of the combination of implementing Leveson and the Defamation Act is a major attack on freedom of speech and communication - in the ostensible shape of a ‘reform’ of the pre-existing law. But this, as I have already said, is the normal result of political processes under our plutocratic constitution. mike.macnair@weeklyworker.org.uk
Notes
1. The outlines of the scheme are at paras 65-71 of Leveson’s executive summary of his report: www.official-documents.gov.uk/document/hc1213/hc07/0779/0779.pdf.
2. Preliminary report: www.judiciary.gov.uk/JCO%2fDocuments%2fGuidance%2fjackson-vol1-low.pdf, pp342, 344-45.
3. ‘A comparative study of costs in defamation proceedings Across Europe’: http://pcmlp.socleg.ox.ac.uk/sites/pcmlp.socleg.ox.ac.uk/files/defamationreport.pdf, p3.
4. Telnikoff v Matusevich 347 Md 561 (1997).
5. ‘McLibel leaflet was co-written by undercover police officer Bob Lambert’ The Guardian June 21.