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New Clause 2 — Disapplication of Legal Aid, Sentencing and Punishment of Offenders Act 2012

Oral Answers to Questions — Prime Minister – in the House of Commons at 2:45 pm on 12th September 2012.

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Votes in this debate

  • Division number 64
    A majority of MPs voted to exempt defamation cases from capping of no-win no-fee success fees and provisions to prevent costs awards relating to legal insurance premiums.

‘Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 shall not apply in relation to civil actions for defamation, malicious falsehood, breach of confidence, privacy or publication proceedings.’.—(Robert Flello.)

Brought up, and read the First time .

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

I beg to move, That the clause be read a Second time.

I have already welcomed both new Ministers to their places while in a Committee, but I shall repeat the exercise because it is welcome to see them both on the Front Bench today. The spirit of consensus that was started on Second Reading ran into some thick treacle in the Public Bill Committee, but perhaps a fresh approach with a fresh set of Ministers will allow us to return to those heady days.

I make no apology for bringing the new clause to the attention of the House. It was tabled by my hon. Friend Mr Slaughter in Committee only for us to run out of time to have a proper debate and a proper Government response. It is important that right hon. and hon. Members on both sides of the Chamber understand the situation and the context in which we propose the new clause.

If I use the term “CFAs”, I hope everyone knows that I am referring to conditional fee agreements. I will also refer to after-the-event insurance, and I might slip into calling them ATEs. Some extremely knowledgeable Members will have no problem understanding CFAs, ATEs and various other acronyms, but I hope the House in general will be clear what I mean if I use them.

Conditional fee agreements, also known as no win, no fee agreements, were first made possible in personal injury cases by secondary legislation under the Courts and Legal Services Act 1990 and were introduced in

1995. They were meant to provide greater access to justice for those who did not qualify for legal aid but were unable to afford legal representation. Defamation cases were never covered by legal aid.

From 1995 until April 2000, there was limited take-up of CFAs, as some of the costs were still borne by the claimant. The Access to Justice Act 1999, which came into effect in 2000, introduced significant changes and reduced the scope of legal aid, particularly for personal injury, on the basis that those cases could now rely on CFAs. At the same time, the 1999 Act made CFAs more usable by allowing the recoverability of the success fee and the after-the-event insurance premium. It therefore became possible for people to take legal action without the fear of losing everything because of significant cost implications, although it was still necessary, of course, to find a lawyer willing to take the case because, if they lost, the lawyer would lose his or her fee. That is an important point at which to pause for consideration, as lawyers would therefore prefer to take on only those cases that they believed they could win.

Just so we are clear, damages awarded to claimants in defamation cases are typically between £10,000 and £20,000, whereas the costs of such litigation frequently run to many hundreds of thousands of pounds, but the Government now seem to think that the fees lawyers charge will come down if fewer people can get access to justice. Two situations could arise—[ Interruption. ] Before I explain them, let me welcome the Secretary of State, who has just taken his place on the Treasury Bench.

Let us consider a situation in which a person feels that they have been defamed, perhaps by the media, as is too often the case and as happened in the horrendous and tragic case we heard about earlier. The claimant would currently be able to agree a no win, no fee agreement, and if the person won, he or she would keep their damages and the lawyer would be entitled to get a success fee of between 10% and 100% depending on the conduct of the case. The insurance premium could also be recovered. The cumulative effect of the cases that lawyers win helps them to offset the costs of the cases that they lose. If the claimant loses, the insurers will pay the other side’s costs.

Let me give some examples of ordinary people who have been libelled or intruded on by the media and would otherwise not have been able to afford legal representation. Robert Murat was grossly defamed after the disappearance of Madeleine McCann and won significant damages from almost a dozen news outlets. He was supported by the use of a CFA. We all know that Christopher Jefferies was “monstered” by the press after he was arrested for questioning by the police in the Joanna Yeates murder trial, despite the fact that Jefferies was released after two days without charge. It is difficult to see how he could have received fair redress without the use of a CFA.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

Was the case of Mr Jefferies, which the hon. Gentleman rightly raises, pursued under defamation law or some other provision?

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

I refer the hon. Gentleman to my new clause; I think he will then get the point.

Sylvia Henry was a social worker who was wrongly accused of being negligent in the Baby P case. As a consequence, she was horrendously defamed and banned from carrying out child protection work. The CFA helped her to challenge the press’s accusations. A newspaper we have heard mentioned many times today,

The Sun

, apologised after reporting that Mr Abdul Patel was an evil terrorist who had been jailed for his part in a transatlantic terror plot. Mr Patel has never, as the paper acknowledged, had any involvement with terrorism acts. He was helped by a CFA. Finally, Elaine Chase was a paediatric community nurse who was falsely accused by

The Sun

, on the front page and inside that paper, of hastening the deaths of 18 terminally ill children by over-administering morphine. She fought and won her case with the support of a CFA.

We will now have a double whammy under this Bill and the Legal Aid, Sentencing and Punishment of Offenders Act 2012, whereby a claimant will, quite rightly, have to pass a higher test to bring the claim but will also need the financial resources to go to law. Is that fair? How many people who have been defamed will have the case to go to court but not the means, and will therefore have no way of clearing their name?

Let us consider the other side of the argument, which is the position of the defendant. As the relevant part of the LASPO Act is not yet in force, a defendant also has the ability to use no win, no fee conditional fee agreements and after-the-event insurance. If the defendant is successful, the lawyer gets paid and receives a success fee from the claimant. Of course, the defendant does not receive damages. Alternatively, if the defendant loses the lawyer does not get paid but the ATE policy pays the claimant’s costs.

Let me give a couple of examples to illustrate my point. Members of the Public Bill Committee will be familiar with the case of Peter Wilmshurst, but it is important that it is understood by the wider House. Peter Wilmshurst was a scientist who was sued by the American pharmaceutical firm NMT Medical after he criticised its research at a US cardiology conference in 2007 and his comments were quoted by a journalist. Henrik Thomsen, a Danish radiologist, was sued by GE Healthcare for comments he made about a drug, again at a conference. If they had been unable to rely on CFAs and ATEs, they probably would not have been able to defend themselves at all.

As a result of the LASPO Act, defendants will now be faced with three options. First, they can issue a grovelling apology, even if they were absolutely right to say what they did, and hope that that is sufficient to avoid being sued. Secondly, they can try to defend themselves in court without legal assistance or any legal advice and face losing; they will also probably face highly paid, highly skilled lawyers on the side of a major corporation. Thirdly, they can try to scrape together the money to pay a lawyer while bearing in mind that if they lose, the cost might wipe out all their resources. Do we really want eminent doctors and scientists running the risk of losing everything, or preferring not to take the risk and retracting what they said, even though it might be correct and that scientific and medical research might save lives? Of course, the Minister will say that the barrier to pursuing a case will be higher once this Bill is enacted and that that will stop vexatious and intimidatory claims, but that will not happen without an early strike-out route.

My new clause also covers privacy cases, and there can be better illustration of the harm that the LASPO Act will cause than the terrible case involving Milly Dowler. Sally Dowler has gone on record, saying:

“At the outset we made clear that if we had to pay the lawyers, we could not afford to bring a claim; or if we had any risk of having to pay the other side’s costs, we couldn’t take the chance. If the proposed changes had been in place at that time we would not have made a claim. Simple as that, the News of the World would have won, because we could not afford to take them on.”

That is why it is so important to exempt defamation and other matters covered by my new clause from the LASPO Act.

We are not alone. Even Lord Justice Jackson talked about moderated success fees, but the Government have not included his proposals to mitigate the impact of the LASPO Act. The Bill rebalances defamation law in favour of defendants. If we do not remove cases from the LASPO Act, we will condemn wrongly accused people to not receiving justice. How can that be right?

We did not have sufficient time to explore the issue fully in Committee, so let me take the opportunity to put on record what was said in a letter to the Prime Minister on 26 March, in advance of the final stages of the LASPO Bill. The letter was signed by Christopher Jefferies, Gerry and Kate McCann, Peter Wilmshurst, Robert Murat, Hardeep Singh, Nigel Short and Zoe Margolis.

You will be relieved to hear, Mr Deputy Speaker, that I shall not read the entire letter, but it is important that the House hears the important points that it makes. It says:

“We strongly object to the passing of this unjust measure and urge you”— the “you” is the Prime Minister—

“to amend it before it is too late…Of course we are the first to recognise that legal costs in many cases are too high and also that some reforms are justified, but the bill includes changes to Conditional Fee…Agreements and to After-The-Event…Insurance schemes which will effectively make them non-viable in libel and privacy cases, where financial damages to a successful claimant are far too small to cover these costs as the bill currently proposes they should. So only the rich could take on a big newspaper group. A successful libel defendant obviously does not get any damages so these reforms will prevent all but the rich from being able to defend their right to free speech against wealthy or corporate libel claimants. Although the aim of reducing costs is very laudable, the position of lower and middle income claimants and defendants in these types of cases has simply been ignored.

Even if a lawyer will take a high-profile case without a ‘success fee’ that compensates for the risk of losing some cases, or even does the case pro-bono, there is still the enormous risk to defendants and claimants that if they lose, they will have to pay the other side’s costs. A person of ordinary means in that position basically has the choice of living with injustice or risk losing their home…In practice this means that in future ordinary defendants…will also be unable to get support for legal action taken against them often by large institutions with deep pockets trying to silence them. That would be bad news for science and medicine, for free religious debate and for transparency in the public interest…We urge you to take action now to amend the Legal Aid, Sentencing and Punishment of Offenders bill.”

Obviously, such action was not taken. Subsequently, the Prime Minister promised the Dowler family that, prior to the abolition of no win, no fee, there would be a regime in place that would protect claimants, but no such regime has been established to date.

If we cannot get things right in this House, I trust that, when the Bill reaches the other place, Lord McNally will honour a promise he made to Lord Prescott. Let me remind those hon. Members who might be blissfully unaware of what was said. When Lord Prescott, the former Deputy Prime Minister, was moving an amendment to the LASPO Bill, he said:

“I have benefited from the current no-win no-fee arrangement in pursuing my case against the Murdoch press and the Metropolitan Police. I would not have been able to pursue that case without such an arrangement because, quite simply, I would not have been able to afford it. This Bill strengthens the media’s case by reducing their costs, even if they are found guilty and damages are awarded against them. However, not only does it reduce their costs but it transfers the costs to the successful complainant. However one looks at it, it is not justice for the person who wins the case to be penalised by further costs.”

Lord McNally’s ministerial response was very clear:

“I give noble Lords as full an assurance as I can. Bills have to go through Cabinets and Cabinet committees, et cetera, but they also have to go through two Houses of Parliament, where this issue is extremely live. I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill.”

In anticipation of Lord McNally’s response, Lord Prescott had said:

The Minister is talking about whether this can be put into the Defamation Bill. If it is right to put it in that Bill, why wait? I fear that when the Defamation Bill is debated it will be all about defamation costs but there will be very little about privacy breaches, which is what the amendment is concerned with…To duck behind the Defamation Bill and say that it will be dealt with then is frankly not giving the issue the justice that it is entitled to. I am saying that we should side with the weak in this case, not the powerful. Let us have justice. That is what this place is about.”—[Hansard, House of Lords, 27 March 2012; Vol. 736, c. 1324-1332.]

Let me repeat Lord McNally’s crucial words:

“I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill.”

I, like many others, have pored over every line of the Defamation Bill, so perhaps the Minister will be able to shine a light and point out where the Bill fully deals with such issues. New clause 2 would flush out those hidden words, and if the Minister cannot find them in the Bill, let us agree to the new clause so that they are put in. I hope that he will either highlight where those words have hidden themselves, or find a way of ensuring that we get what was promised.

Photo of Edward Garnier Edward Garnier Conservative, Harborough 3:00 pm, 12th September 2012

It is a pleasure to speak in the debate because it gives me the opportunity to congratulate my hon. Friends the Members for Kenilworth and Southam (Jeremy Wright) and for Maidstone and The Weald (Mrs Grant) on their promotion to the Government. I cannot think of two finer people to receive such an honour. I served on several Public Bill Committees with my hon. Friend the Member for Kenilworth and Southam when we were in opposition, and I could not think why he was not made a Minister as soon as we came into government. At least he got there in the end, however, and I sincerely trust that he will stay in his post for a good long time, not least because the Bill is of considerable public importance and interest.

I must disclose a form of interest in the Bill because there was a time when I knew quite a lot about the law of defamation, although I then spent two years as a Law Officer during which I forgot all the law I ever knew. While I was listening to Robert Flello, I was reminded of our debates during the passage of the Bill that became the Access to Justice Act 1999. At that time, it was apparent that the then Labour Government were not terribly interested in providing access to justice, and I said that that Bill would more properly be called the Denial of Access to Justice Bill. However, that was a long time ago.

I come to our debate on the new clause untrammelled by any knowledge of sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, but I did listen to the hon. Gentleman’s speech. I do not think that my hon. Friend the Minister will have to look very hard to find the references that the hon. Gentleman was after, but if the situation is as it has been described, that would be a pity, to say the least.

If the words of my noble Friend Lord McNally that were cited are to mean anything, I trust that the Government will do something about the problem, because a failure to provide access to justice for people without deep pockets should not be encouraged. Conditional fee arrangements—I have benefited from one or two—do not cost the Government any money. They are not an ideal system of achieving access to justice, but they are a way of allowing those without access to funds from trade unions, companies, employers or others to bring or resist actions for defamation. I therefore hope that the Government will consider carefully—if not today, during the gap between the Bill leaving this House and its consideration in the other place—arrangements whereby those without funds can defend either their reputation or a defamation claim.

That said, I hope that the Minister’s speech will persuade the hon. Member for Stoke-on-Trent South that it is not necessary to press new clause 2 to a Division. I hope that we can take the Minister’s word that the matter will be given a lot more thought before the Bill reappears in the other place. Knowing my hon. Friend, I think that we can be reasonably sure that that will be the case.

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I support the comments of my hon. Friend Robert Flello and Mr Garnier, who I see is still plain “Mr Garnier” on the monitors.

It has been a long road to libel reform. For newspapers and other media, the real issue is cost. Responsible newspapers have been concerned about conditional fee agreements with 100% success fees and the sheer costs involved in such cases, especially as it seemed to be a case of “always win, double the fee”. Of course, we have heard examples where that is not the case: my hon. Friend cited the case of Dr Peter Wilmshurst, consultant cardiologist at Royal Shrewsbury hospital and our local University hospital of North Staffordshire, who needed that measure to be able to defend himself and give some certainty in a fraught situation to his family that, if he were to lose his case, all their worldly goods would not be forfeit.

Over time, proposals have been made, including by Lord Justice Jackson and my right hon. Friend Mr Straw, who laid a statutory instrument which was—almost uniquely—defeated by a cross-party ambush in Committee, because Members felt so strongly about the issues involved. In addition, the Culture, Media and Sport Committee, of which I am a member, produced proposals to limit the uplift in fees to 10%, rather than 100%, and not to recover after-the-event premiums—often, there is a false market in those premiums. I will put on the record now my belief that, in that report, we went too far, but our proposal was not to abolish an uplift, which would encourage lawyers to take on difficult cases, in their entirety. On the one hand, we are reforming libel law to protect responsible journalism, but on the other hand, we are potentially denying people access to justice, and I think the whole environment has become unbalanced.

What we have to remember, with phone hacking and Lord Leveson soon to report, is that we have a macho media world and some highly aggressive corporations. If we remove people’s ability to fight to restore their reputation, we risk giving a carte blanche to libel and going back to the bad old days when the only questions a newspaper asked were, “How much have they got? Can they afford to sue us?”

Photo of Gloria De Piero Gloria De Piero Shadow Minister (Home Affairs)

There seems to be some consensus that the main obstacle to pursuing a defamation claim would be lack of cash. Does my hon. Friend agree that, rather than resolve that crucial issue, the Government’s proposals could make the situation worse?

Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

I entirely agree. I do not propose a return to the bad old regime, but I hope that the Government will give some thought to the remarks made by my hon. Friend the Member for Stoke-on-Trent South and the hon. and learned Member for Harborough. The situation is unbalanced now and we need to address that.

So often, if people do not sue, our media do not take them seriously. That simply increases the licence to libel. I know people who defend responsible journalism and investigative journalists who have had to take that course of action because newspapers with an agenda have been out to get them; if they did not threaten or take legal action, the situation would never change. I believe the culture of our media needs to be borne in mind, as we will be reminded when Lord Leveson reports next month.

Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats

I welcome back to our debates the former Solicitor-General, whom I thank for his work in that office. It was much appreciated and I wish him well in considering things from a non-Government and non-Law-Officer perspective.

I declare an interest that means that I will not vote on the new clause if it is pressed to a Division. I am the recent recipient of a conditional fee agreement in the well publicised series of actions against News International. Even though, like all my colleagues here, I am on a parliamentary salary of more than £60,000 a year, had I not been offered a conditional fee agreement the prospect of taking News International to court subject to the risks that, in theory, followed from that might well have dissuaded me from doing it. If those risks might have dissuaded me and anyone on a salary similar to mine, how much more would they have dissuaded people earning a lower salary, much less experienced than I in such matters—not a lawyer—and not used to dealing with the media? We have to be realistic about the relevance of the issue and be aware of the need to continue the debate.

New clause 2 would remove the provision of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, passed at the end of the previous Session, and return to the status quo. My party has formally debated the matter at our conference and is clear that reform of the law is needed. This has been the subject of two or three debates relating to phone hacking specifically and to libel law reform more generally. Campaigners on both sides—both those who might be claimants and those who might be defendants—have supported some reform of the law. Strong arguments have been made to cap success fees and to replace after-the-event insurance with cost shifting. The Government made a promise—it was cited by Robert Flello—to address the issue. As colleagues might imagine, I have discussed the subject with my noble Friend Lord McNally, whose commitment to making progress is on the record. I am sure that the Government, with my noble Friend remaining as Minister of State with a new team around him, will not lose sight of the fact that this is unfinished business.

The simple facts are that damages in privacy and libel cases are often relatively small and the legal costs often relatively large. That is the imbalance. It is not always the case, but it is often the case. There is real concern that the effective removal of success fees will mean that lawyers will no longer be able to offer conditional fee agreements and that that will prevent all but the wealthy from taking action. Even more important, it could be argued, the abolition of insurance premiums would mean that people risked their homes and other assets on legal action against a newspaper. To return to my starting point, most of the victims of phone hacking have made it clear that they would not have been able to bring claims had it not been for conditional fee agreements.

I am glad that this unfinished business is on the agenda, but I do not think that we can deal with it appropriately here and now simply by accepting the new clause—well intentioned and perfectly understandable though it is. I look forward to the wider debate that we will have on other matters and hope that, before the Bill becomes law, we will have arrived at a position in which the rights of “the ordinary person” or “the ordinary citizen” are defended and they are not at a disadvantage when defending their reputation against people who are much more powerful and influential than they are.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West 3:15 pm, 12th September 2012

On 24 May, in a written ministerial statement, my hon. Friend Mr Djanogly spelled out the exceptions to implementation of sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, stating that there would be a delay in implementation for cases involving mesothelioma and insolvency. He referred to the Civil Justice Council, which was to carry out a review. I suspect that I would not come to a firm view on the proposal currently before the House without hearing from that review, so that is an argument for delaying.

It is clear—I am not a lawyer or a parliamentary draftsman—that it is open to the Government to make by statutory instrument exceptions or changes. The Bill might not be the right place to deal with issues that go beyond defamation. Our debate is in order; otherwise the decision to select the new clause would not have been made by the Speaker or his advisers, although I was a bit surprised by it.

We must be clear in our minds whether aid should be qualified by cost shifting or by conditional fee agreements for both claimants and defendants. To do it only one way would be a bit odd. To do it both ways would be a bit like the old civil disputes in families—costs might rocket for issues that should be determined in different ways.

I ought to declare that I have been involved in a number of defamation actions. I have been defamed more often that I have taken action. If anyone hacked my phone, the only defamatory stuff they would hear would be my wife telling me I ought to be at home, rather than in the House of Commons Chamber.

In the early 1980s, a newspaper said that I was going to stand for one party, but switch to another one later, which was clearly defamatory. When I asked the journalist involved what had happened, he said that the story had been improved by the sub-editing process, and asked whether I was going to sue. I said no. Later, he asked why I did not do so, as everyone else got £25,000 each. That was not damaging to me, as the journalist explained what the process was and I did not mind. The idea that if I had no money I could go to a lawyer and ask them, at the expense of their other clients or of the public purse to take action, in a case in which there was not substantial damage to me, strikes me as absurd.

There are therefore counter-arguments to the cases raised by Lord Prescott and others. [ Interruption. ] My hon. and learned Friend Mr Garnier says that it is not compulsory to sue, and I made that point when I was asked why I never sued Auberon Waugh who made a living out of me for about four years.

I have, however, taken serious action in some cases. This does not fall directly under the new clause, but it is the only occasion on Report when I can mention it in passing. I was successful in making a claim that lasted a week and a half in the High Court. The newspaper group concerned was aggrieved that the jury found against it, and said that it was going to appeal on the grounds that the judge’s summing up was deficient. If that appeal had been approved, I could not have gained any more money, because the award was not going to be increased. Costs would only have gone up, and not all of them would have been recoverable. Those who look after the procedure rules ought to watch out for such abuse by big, powerful people.

Having said that, there are other issues to which I wish to pay more attention on Report. The point made by the Civil Justice Council about the opportunity to make changes by statutory instrument is a better way of dealing with the matter than by doing so in the Bill.

Photo of Jeremy Wright Jeremy Wright The Parliamentary Under-Secretary of State for Justice

May I begin by expressing pleasure at seeing my hon. and learned Friend Mr Garnier—if he is not a right hon. Gentleman, he should be—in the Chamber, as he brings considerable professional expertise, as we all know, to the debate? I also welcome the contributions of other right hon. and hon. Members who have spoken.

I am delighted that Mr Slaughter is speaking for the Opposition. He and I spent many happy hours discussing the Legal Aid, Sentencing and Punishment of Offenders Bill, but I am sure that neither he nor I nor you, Mr Deputy Speaker, would want to rerun all those happy hours. I accept the provisions under consideration relate to the substantive law of defamation; we are not here to review LASPO, which was subject to full parliamentary scrutiny—as I recall, very full parliamentary scrutiny—before receiving Royal Assent only a few months ago.

It is important to make clear what the Government’s proposals will do. We are not talking about removing access to CFAs. We are talking about reforming and changing CFAs. The basic rationale for those reforms is that we wish to rebalance the system to make it fairer between claimants and defendants and correct the anomaly whereby those who bring cases have no incentive to keep an eye on legal costs. At the moment, the recoverability of success fees and insurance premiums from the losing side can have the perverse effect of preventing defendants from fighting cases, even when they know they are in the right, for fear of disproportionate legal costs if they lose.

High and disproportionate costs have a negative impact, not just because they can deny access to justice but, more broadly, because they can lead people to change their behaviour in damaging ways because of the fear of claims. Nowhere is that more true, as has been said in our debate, than in relation to responsible journalism, as well as in relation to academic and scientific debate. In MGN v . the UK—the so-called Naomi Campbell privacy case—in January 2011, the European Court of Human Rights found that the existing CFA arrangements, with recoverability in that instance, which the new clause would preserve, were incompatible with the right to freedom of expression under article 10 of the European convention on human rights.

Editors and journalists have long warned of the chilling effect of the current libel regime and argued that part of the problem is the huge costs that no win, no fee cases impose. However, as others have said, defendants are not always rich and powerful newspapers—they are also scientists, non-governmental organisations, campaigners, academics and on occasion, it seems, my hon. Friend Sir Peter Bottomley. It is important that when we discuss balance—this has been a theme of our conversations and debates so far—we recognise what else is going on. We should recall that clause 1 says that defendants will not be subject to actions for defamation, whatever their means, unless the claimant can demonstrate that he or she has suffered serious harm. That is important in this context. It is also important to recognise that we intend to make procedural changes—this relates very much to the remarks by my hon. Friend the Member for Worthing West—to try to reduce the costs that are paid by both sides, or either side, in the course of defamation actions. We believe that considerable progress can be made in that regard.

The CFA changes that we intend to make will apply to all areas of civil litigation as set out in the Legal Aid, Sentencing and Punishment of Offenders Act, and will do so from April 2013, apart from, as my hon. Friend reminded us, in mesothelioma and insolvency cases. The Government believe that any further exceptions to the CFA reforms are unnecessary. Our CFA reforms will ensure that meritorious claims can still be brought, but at more proportionate cost. However, I share the concern that individuals who are not wealthy or powerful sometimes need to bring defamation or privacy cases. Nothing in our proposals should prevent this where a case is a good one.

As Paul Farrelly said, there is a degree of cross-party consensus on this. In March 2010, the then Labour Justice Minister, Lord Bach, said:

“There is a substantial body of opinion that 100 per cent recoverable success fees should not continue in defamation cases.”—[Hansard, House of Lords, 25 March 2010; Vol. 718, c. 1156.]

That was on the back of a consultation that said that

“immediate steps are needed in respect of defamation proceedings”.

It was the Labour Government’s policy to reduce the impact of success fees in defamation and privacy cases.

The Bill and the procedural reforms that we intend to take forward with it are about reducing the complexity and therefore the expense involved in defamation cases. In order for those aims to be achieved, on 27 March 2012 Lord McNally gave a commitment in the other place that we will look at the rules on costs protection for defamation and privacy proceedings. That is very much in accordance with what my right hon. Friend Simon Hughes said. We will look at the rules for costs protection for defamation and privacy proceedings before the defamation reforms come into effect. I repeat that commitment here today. There is clearly more work to do, and I know that my noble Friend will be keen to consider the matter further.

In view of those remarks, I hope that Robert Flello will, on reflection, feel able to withdraw new clause 2.

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

Mr Garnier suggested that the Defamation Act 1999 was a denial of justice. If he feels that way, he must be incredibly upset about what happened under the Legal Aid, Sentencing and Punishment of Offenders Act, which really is a denial of justice. He, like many others, said that the Minister will take that point on board. I will return to what the Minister has said in a moment.

As many Members have said, it is a pity that what was promised is not in the Bill. My hon. Friend and neighbour Paul Farrelly referred to my right hon. Friend Mr Straw being subject to a cross-party ambush. I suspect that after Monday night the Minister will have a lot of sympathy with what happened to my right hon. Friend. My hon. Friend and neighbour said that responsible journalists are made grubby by the scurrilous ones, and that we cannot have this licence to libel.

Simon Hughes understands the problem, because he had a CFA for his claim against News International. If he was concerned about the financial implications of taking a case without CFA, what about constituents who are in a far worse position? That goes to the crux of our concerns and is the reason for new clause 2.

How long must we wait for reform? A promise was made when we debated the Legal Aid, Sentencing and Punishment of Offenders Bill. The draft Bill did not mention defamation costs to ensure that people can afford to take action if they are defamed or if they want to defend themselves. The Joint Committee has done some excellent work, but it has not resulted in anything that protects claimants and defendants. There was nothing in the Bill on Second Reading or when it was debated in Committee, and we are now on Report and still nothing has been suggested. I hear what the right hon. Member for Bermondsey and Old Southwark says, but how long must we wait for an answer? Sir Peter Bottomley noted that the Government have already made exceptions on mesothelioma and recounted his own examples of being defamed.

The Minister is right to say that the LASPO Bill, which is now the Legal Aid, Sentencing and Punishment of Offenders Act 2012, received full parliamentary scrutiny. I recall that the Government suffered 14 defeats in trying to get it into some sort of shape that was halfway to what it should have been. Yes, there is a rebalancing between claimants and defendants in the Defamation Bill, but if we want to tackle costs, surely the Government should have addressed that and not stopped those without means being able to get justice.

I may have misheard the Minister—if he wants to intervene, I will certainly allow him to do so—but he seemed to defend newspapers that fear the chilling effects of defamation claims. Undoubtedly, newspapers have been on the receiving end of defamation law suits, but my sympathy lies with the ordinary person in the street and our constituents, not the deep pockets of the newspapers.

Photo of Jeremy Wright Jeremy Wright The Parliamentary Under-Secretary of State for Justice 3:30 pm, 12th September 2012

Let me be clear about what I said: it has long been argued by newspaper editors that there is a chilling effect on freedom of speech and some of the things under discussion, and I think there is broad agreement throughout the House that there is a risk that some defamation actions could have that effect. The costs regime has an impact on that. I then went on to say that not every defendant is a newspaper, and certainly not a well-funded newspaper. That was the substance of my point.

Photo of Rob Flello Rob Flello Shadow Minister (Justice)

I appreciate the Minister’s clarification, but I think that the newspapers will always claim that there are chilling effects. On balance, this will hit the likes of the McCanns and the Dowlers—people whom we should really be making sure are not hit.

In conclusion, I will push the new clause to a vote, because it is on a matter of principle. We need to send a message that when a promise is made, we expect to see it fulfilled.

Question put, That the clause be read a Second time.

The House divided:

Ayes 198, Noes 273.

Division number 64 Defamation Bill — New Clause 2 — Regulation of Payments for Legal Services In Defamation Cases

A majority of MPs voted to exempt defamation cases from capping of no-win no-fee success fees and provisions to prevent costs awards relating to legal insurance premiums.

Aye: 199 MPs

No: 273 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Absent: 173 MPs

Absents: A-Z by last name

Question accordingly negatived.