Arbitration Bill [HL]

Lord Hoffmann Excerpts

Second reading committee
Tuesday 19th December 2023 Grand Committee

[Lord Hoffmann (CB)]

My Lords, I will make a declaration. Since I retired from being a member of your Lordships’ Appellate Committee some 14 years ago, I have practised as an arbitrator in London, including having presided over the Nigerian arbitration to which my noble and learned friends on my right referred.

I have come only to make a modest suggestion for improvement, which has already been anticipated by my noble and learned friend Lord Hope, in relation to new Section 6A(2). I can see entirely why it has been inserted into the draft; it has been done in case some literal-minded judge, not really knowing much about the background to this legislation, might say, “It says that the law which the parties expressly agree applies to the arbitration. The parties have expressly agreed that the document in question shall be governed by the law of Patagonia, so why doesn’t that include the arbitration agreement, which is part of that document?” As I say, you have to be fairly literal and ignorant to be able to come to such a conclusion, but there it is—that is what it is for.

However, I am afraid that, as I think my noble and learned friend Lord Hope pointed out, the existing new Section 6A(2), which is meant to deal with that problem, has problems of its own because of the words,

“does not, of itself, constitute express agreement”.

If you say that, you can say, “What else is needed, and what else will count as sufficient?” You find that all you can do is to go back and say, “Well, you need an express agreement that the arbitration agreement shall be governed by a different law”. I do not want to say anything which might possibly derail the special procedure under which the Bill is going through the House but, if it were possible quietly to drop new Section 6A(2), that would be an improvement.

The Minister said that we are now aligning our law with the law of Scotland, but the law of Scotland does not have such a provision—it manages perfectly well with Section 1. Likewise, if you sign up to the rules of the London Court of International Arbitration, you get the law of Scotland, not this extra new Section 6A(2). The draftsmen of both those instruments had sufficient confidence in the judiciary to be able to arrive at the proper conclusion, simply on the basis of what is now Section 1. That is the only contribution which I have to make to your Lordships’ debate.

Defamation Bill [HL]

Lord Hoffmann Excerpts

Friday 9th July 2010 Lords Chamber

[Lord Hoffmann]

My Lords, the House is greatly indebted to the noble Lord, Lord Lester, for raising the subject of defamation law for debate. I look forward to the contributions of the noble Baroness, Lady Hayter, and the noble Lord, Lord Willis. I made my maiden speech in this House on the Second Reading of the Defamation Bill in 1995, so I know something of how they feel.

There are provisions in the Bill which I think are excellent reforms and which I wholeheartedly commend to the House—for example, the clause which says that a corporation cannot sue for defamation unless it proves that it has suffered, or is likely to suffer, financial loss. There seems to me a great difference between the reputation of an individual and that of a corporation. An individual’s reputation is part of his personality. It is what the noble Baroness, Lady McIntosh, in her Shakespearean quotation, called his “immortal part”. He feels the pain when a slur is cast upon it. A company’s reputation, on the other hand, is a commercial asset. It is what brings in the customers, and the company does not suffer as long as they continue to come, so it should not be able to sue unless it can show that it has suffered financial loss.

Then there is the clause that gives effect to the recommendations of the Joint Committee on Parliamentary Privilege about defamation of Members of this House or the other place in relation to their parliamentary duties. That too is an improvement in the law. In 1995, when I moved the amendment which became Section 13 of the Defamation Act 1996, I did so because I thought it was unfair that Mr Hamilton should have no right to clear his name of allegations of parliamentary misconduct. He was entitled to his day in court like anybody else. If he was innocent, he should win, and if he was guilty he should lose. As it happens, the jury disbelieved him and he lost, but that does not affect the principle that he should have been entitled to sue. The Joint Committee agreed that in principle a Member of one of the Houses of Parliament should be entitled to clear his name. However, it drew attention to some defects in Section 13 and recommended that it be replaced by a provision which is now part of this Bill. There is a lesson for us here. I am sure that the noble and learned Lord, Lord Mackay of Clashfern, who piloted that Bill through the House, will agree that Section 13 was hastily put together at the last minute, and that hasty reforms tend to cause trouble.

It is for that reason that, on reading this Bill, I had some misgivings about some of its provisions. I was greatly relieved when my noble friend Lord Lester said at the end of his speech that he did not envisage that it would become law in its present form, but that there would be a process of debate and consultation and possibly a draft Bill, perhaps even an expert committee. My difficulties were not matters of detail which could be considered in Committee, but raised more general questions of legislative policy. I cannot help feeling that there has been something of a campaign over the past year or two by the media to push us into rapid action. Most of that campaign has been concerned with the way in which defamation actions are funded, particularly with conditional fee agreements and their expense. That is perfectly true—it is a great difficulty that needs to be addressed. However, it is not addressed in this Bill, and quite rightly so because the noble Lord, Lord Lester, says that it is not within its scope.

This campaign has been fuelled by hostile criticism of our law by the media in the United States. Our defamation laws do not seem to be any more popular than our oil companies in the United States. But that campaign has been seized upon by the press in this country as demonstrating that our law is in need of urgent reform. It is important to disentangle those parts of the argument which have some merit from those which, in my opinion, have none.

The law in the United States is extremely favourable to the media. A person who is categorised as a public figure, which tends to include almost anyone the press would want to write about, cannot sue for defamation unless he can prove that the writer actually knew what he was saying was false. That is almost impossible to prove. No matter how slipshod the journalism, the publisher has a complete defence. That has been in the law in the United States for more than half a century and it is now firmly settled. I make no criticism of it; no doubt it suits them. But so far as I can tell, it is unique in the world. Courts in this country, Canada. Australia and New Zealand have all been urged by media organisations, naturally, to adopt that rule, and they have all rejected it as giving too little consideration to the right to a good reputation. As one Canadian judge put it:

“An individual’s reputation is not to be treated as regrettable but unavoidable road kill on the highway of public controversy”.

Instead, we have adopted a public interest defence: it is a defence that the article or the book which is complained of was about a matter of public interest and that its research and preparation was in accordance with reasonable, responsible standards. That was the rule laid down by this House in its judicial capacity in the Reynolds case and it was strengthened in the Jameel case. I think that that rule strikes a fair balance between the right to a reputation and the public interest in having information on matters of public interest. It has recently been adopted in its entirety by the Supreme Court of Canada. But there is a clash of cultures when publications by Americans, emanating from America, are disseminated in other countries and Americans are sued for libel there. Of course the internet has made it extremely easy to defame people all over the world from a website in the United States. The American reaction has been to protest vigorously that other countries should adopt the American rule, or at any rate should not apply their own rule to Americans. They do not think that our public interest defence is good enough, and this of course has been seized upon by the media in this country, which would naturally prefer to have the American rule. Indeed, they would prefer to have no law of libel at all, as evidence that our rules are too restrictive and that the balance ought to be tilted in favour of the media, as it is in the United States.

I am relieved to see that my noble friend’s Bill does not accept this argument. But I am slightly puzzled by what it does do—which is to take the public interest defence, as laid down by your Lordships’ House in Reynolds and Jameel, and restate it in its own language. I am always nervous, speaking as a former judge, about legislative attempts to restate rules of common law. They lead to expensive litigation over whether or not Parliament intended to change things. As the Jameel case appeared to be generally welcomed by the press and has been followed by the Canadians, I should have thought that there was a case for leaving well alone.

It is said that in practice the public interest defence is not as useful to the media as might have been hoped. That may be true, but it is not easy to say why and certainly there is nothing in the Bill that identifies some aspect of the public interest defence that needs to be changed. As stated in the Bill, it is all much the same. I suspect, on a purely anecdotal basis, that part of the difficulty for the media lies in the expense—which the noble Baroness, Lady McIntosh, alluded to—of mounting a public interest defence, which often means that a newspaper which would have had a perfectly good defence prefers to pay some damages and settle. If that is right, the problem lies not in the public interest defence but in the costs regime for defamation actions. We simply do not have enough information to know how to address the problem, and I think that it would be a pity to muddy the waters of the substantive law if the solution lies elsewhere.

The other prong of the American reaction has been to say that we should not allow Americans to be sued in our courts for libels emanating from the United States. Legislation has been proposed in Congress to enable Americans to sue before an American jury for three times any loss they claim to have suffered because of being sued for libel in a foreign court. This seems to me an extraordinary example of American extraterritoriality—something which they are very fond of, and something of which I hope the Minister has taken note. If the legislation passes Congress, any UK citizen who attempts to defend his reputation in this country against a libel emanating from the United States would be liable to a triple-damages action in a US court. The proposed American legislation makes no distinction between actions in foreign countries brought by nationals of those countries and actions brought by others.

Of course, attention has been concentrated here on actions brought against Americans by people living abroad. They are called libel tourists. The leading American campaigner, Dr Ehrenfeld, was sued in this country by a Middle Eastern businessman against whom she had made extremely serious allegations that he was a financial supporter of terrorism. There are certain aspects of this cause célèbre about which your Lordships might wish to know. First, the law in this country is that if you have a reputation here which has been significantly damaged, you can sue here. It does not matter that the defamation was sent into this country from abroad. Nor do you have to be a British citizen. That is not only our domestic law but, in cases that have a European element to them, it is binding on us by virtue of the decision of the European Court. In this case, the claimant moved in business circles in London; he had a house here, and he had a reputation here. Secondly, much has been made of the fact that only 23 copies of the book were sold in England. But the material was also published on the internet. One also has to bear in mind the sensible remarks of my noble and learned friend Lord Bingham of Cornhill, who said in another case:

“The law would part company with the realities of life if it held that damage caused by publication of a libel began and ended with publication to the original publishee. Defamatory statements are objectionable not least because of their propensity to percolate through underground channels and contaminate hidden springs”.

Thirdly, Dr Ehrenfeld made no attempt to set aside the proceedings or to defend them in any way. They came before the judge entirely undefended.

This American campaign, which is usually conducted under the banner inscribed “libel tourism”, is actually about Americans being sued by anybody abroad, whether nationals or tourists. Perhaps that is why the New York legislature, when it passed a law making foreign libel judgments unenforceable, called it the Libel Terrorism Act, because suing Americans abroad is a form of terrorism. Whether libel tourism properly so called—that is, actions in England brought by people who have no connection with this country—is a serious problem is debatable. It was debated fairly inconclusively in the Lord Chancellor’s Libel Working Group just before the election. Mr Justice Eady, the senior libel judge who sees libel cases all the time, said that it was not a phenomenon that he came across in his daily life.

Previous reforms of the defamation law have been preceded by the report of an expert committee. As I said, I am anxious that because of the head of steam that has been got up as a result of the Americans, we should not proceed with precipitate haste. It is true that the reports of earlier committees have taken a long time to bear fruit, and sometimes there has been a poor crop; but the Government are committed to reform and there should be no undue delay in taking a little time for careful and dispassionate consideration. There are matters such as libel tourism and the working of the public interest defence about which we simply do not have enough information to make a proper judgment.

The media are strong and vociferous, but there is no lobby or interest group for people whose reputations have been blackened, and we must bear their interests in mind. Many noble Lords will remember the late Lord Aldington, who I think I can say was held in great affection by Members of this House. He spent the last years of his life trying to clear his name of a widely published and totally unfounded libel about his conduct as an officer in the war. After a long trial a jury awarded him £1.5 million in damages. Everybody, including the jury, knew that not a penny of that sum would be paid. The jurors only wanted to mark their disgust at the libel and the way in which the case had been conducted by the defendants. However, the European Court of Human Rights, with the practical common sense which distinguishes that institution, subsequently upheld a complaint that so high an award was an infringement of the defendant’s right to free speech and that it might have a chilling effect on the publication of their opinions. For some conduct, I suggest, a chilling effect is exactly what we want. It is a matter of getting the balance right, and in order to do that there should be an investigation into this matter by an independent committee, comprising not just representatives of interest groups—as the Lord Chancellor's committee did before the last election—but also experts on the law of defamation. Then we can proceed with due speed and in accordance with the Government's promises to reform the law.