My Lords, I hope, in what will be a short speech, to deal with all the amendments together. In answer to the point just raised by the noble Lord, Lord May, corporations are not the same as private individuals. They cannot have hurt feelings but they can be seriously damaged by defamatory statements. I therefore share the view of many courts across the world that corporations should be able to bring libel proceedings but on certain conditions. The short answer to Dr Wilmshurst is that we now have, in what will be Clause 4, a public interest defence which, quite apart from the other provisions in his favour, he would be able to rely upon.
I begin by dealing with the question of damages. I do not want to crow about it, but it was actually in my own Private Member's Bill that I required corporate bodies to have to prove the likelihood of financial loss or actual financial loss. That was commended by the Joint Committee on the draft Bill and by the Joint Committee on Human Rights on which I serve and, as a member, was able to inform its report. I think that the Government have made an important concession and I am delighted that the Opposition have recognised that and, indeed, have called for it themselves. It is, of course, extremely important that corporations are able to bring libel proceedings but, as I say, are able to do so if they are trading corporations by proving serious financial loss or the likelihood of serious financial loss.
All of that is now common ground, and what is left are the two important issues of the Derbyshire principle and the notion of a special procedural step to be taken, which is set out in Amendment 2D. It requires the permission of the court before a trading corporation can sue. I am persuaded by my noble friend Lord McNally's way of dealing with that. It is a procedural point that will be dealt with by the early resolution procedure and by proper case management. It does not require a rigid rule to be inserted into the Bill, and therefore I would not support Amendment 2D.
What, then, about the Derbyshire principle? The House has the benefit of having as a Member of the House of Lords the judge who decided Derbyshire when he was even younger than he now is, my noble and learned kinsman Lord Woolf of Barnes, and I am sure that he will correct anything I am about to say. I want to say something about Derbyshire because I think that it has been misunderstood. It has been misunderstood by the Government because they seem to think that if one were to codify-I am now against codifying for a reason I shall come to-that would be in some way rigid and inflexible because it would prevent a body exercising functions of a public nature being able to vindicate its reputation. That is wrong because, as the Derbyshire case establishes and makes clear, unlike the position in the United States where no one can sue to vindicate the reputation of a government body, it is always open to a body exercising public functions through its officers or any individual who is defamed to bring their own defamation proceedings. It also makes it perfectly clear through Lord Keith of Kinkel in his speech for the House of Lords that there is also the tort of malicious falsehood. This means that if a government body can prove bad faith or reckless disregard for the truth, it can also bring proceedings. The Government are therefore mistaken in thinking that to codify in the way that the Opposition wish to do-with my support the last time round-would create a rigid and inflexible position. That is not so, but the question is whether we were right last time to try to codify the principle.
Since then, something has happened which has caused me to think again. It is the situation in Northern Ireland, and I hope very much that the noble Lord, Lord Bew, will say something about it. Since the last occasion, the governing authorities in Northern Ireland have decided in their wisdom that the Defamation Bill should not apply to the Province. NGOs, newspapers, broadcasters and citizen critics often convey information and ideas which are not confined to any particular part of the United Kingdom but extend to the whole of it.
What troubles me about codification is not what troubles the Government. What troubles me is that, were we to codify in the way that is now suggested, in Northern Ireland, Mr Paul Tweed, in particular, who is the king of libel suits in that part of the United Kingdom, would argue, "This is codified in England and Wales but it is common law in Northern Ireland and the way in which it is codified suggests that Parliament had serious doubts about what Derbyshire meant. Now we are going to seek to apply a narrower view than Derbyshire itself". That has made me think about the whole issue in this context of codification versus common law.
The Minister rightly indicated, going as far as he can, that it must at least be strongly arguable-although for the courts in the end to decide-that a private body exercising public functions, such as a contractor running a prison, which under Section 6 of the Human Rights Act must act in a way compatible with human rights, is part of the Derbyshire principle. I cannot see any argument to the contrary. Common law is already quite clear. Any body, whether a public body or a private body clothed with public functions that seeks to use civil defamation law to vindicate its governing reputation cannot do so, but its individual officers can, and if it wishes to pursue a claim, it can go through malicious falsehood rather than ordinary libel law.
Just as the public interest defence leaves it to the courts to apply a principle case by case in context, in this case, wisdom suggests-partly because of what I have said about Northern Ireland-that this is a case where, having had the situation clarified by the noble Lord, Lord McNally, even though he has not made a Pepper v Hart statement as such, if he and the House agree with the view that I have expressed, I very much doubt that any senior court in any part of the United Kingdom would come to a different view.
It is particularly important to keep the common law strong in this area because we are not a federal system. We do not have a federal rule dealing with defamation; we have devolved functions to Scotland and Northern Ireland. I want to be absolutely sure that common law principles will apply as vibrantly in Belfast and Edinburgh as in London and Cardiff. I do not think I persuaded the noble Lord, Lord Browne, of that, but that is my genuine concern; it is a real one, which I know is live in Northern Ireland as well.
Turning to my Amendment 2E, I am satisfied and grateful for the clarification. The Localism Act says that a local authority may do anything which a private individual may do. Rutland seemed to think that that enabled a local authority to sue for libel and therefore overrode the Derbyshire principle. That is completely wrong and I am satisfied that the Minister and the Government also think it is completely wrong and have indicated that, were they to be found wrong in a subsequent case, they would exercise the power that the Localism Act gives them.
For all those reasons I support the position of the Government and I hope that today will be a happy ending rather than a process. By this I mean I very much hope we will not need to have a Division on any of these issues.