Libel proposals will have 'chilling effect' on newspaper investigations
Government proposals to cut the cost of taking libel action against publishers or broadcasters will have a "chilling effect" on newspaper investigations, top lawyers and campaigners have warned.
Under the plans issued by the Ministry of Justice, libel claimants will only have to pay their own lawyers' fees – even if they lose a case.
"We are concerned about the implications for freedom of expression in that someone could sue a newspaper vexatiously because they know they don't have to pay the costs even if they lose," said Mike Harris, head of advocacy at Index on Censorship, one of the groups which led the successful battle this year for a new defamation act. "It could silence investigations."
The MoJ as part of a review prompted by the Leveson inquiry.
Harris agrees that reducing libel costs, which can easily run to £500,000 for both sides, is a noble aim, but "imposing one-way costs is not the answer".
Libel costs in England and Wales are currently 100 times more expensive than the rest of Europe, according to a comparative study of costs in defamation proceedings issued by the University of Oxford last week.
In one recent high-profile case, when former Tory party co-treasurer Peter Cruddas successfully sued the Sunday Times, costs
"What would be more useful would be reducing the costs at the outset of cases and introducing alternative dispute resolution, which we have put to the MoJ but they didn't go for that idea," said Harris.
David Price, libel solicitor and QC, said he is concerned that the MoJ proposals further add to the "libel chill" and there needs to be more meaningful engagement from the legal and media professions on the issue of fees reform.
He said that in the US, claimants or defendants do not get any costs recovered, but the law is more favourable to free speech.
"In the US even if you are sued, you have better protection because most claimants have to prove malice," said Price. "The danger is that this proposal is an incremental disincentive to investigations by the media, where there are already many others."
Losing claimants in civil court cases in England and Wales currently have to pay the winning side's legal bills, on top of their own.
The new protections have been unveiled by the Ministry of Justice in response to concerns raised in the that potential libel victims could be put off from taking on large media groups and their expensive legal teams.
The recommendation was backed by victims of defamation and invasion of privacy, including the McCann and Dowler families.
Justice minister Helen Grant said: "Defamation and invasion of privacy can have a devastating effect on lives and it is crucial that people, whatever their means, can stand up for their rights in court even when they are facing a wealthy opponent who can afford to appoint a team of expensive lawyers."
Under the proposals which are out to consultation until 8 November, a judge will be able to impose a "one-way" costs order in a case if it is clear one side would not otherwise be able to take part because of the potential legal bills.
This would mean that the smaller party would only be liable for their own legal costs, while the larger party would have to pay for both sides if they lost the case.
This would apply both ways, so individuals and small media organisations could also receive protection if they were contesting a case brought by a wealthy celebrity.
The proposed changes are intended to come into effect from April, alongside reforms to no-win no-fee agreements for defamation and privacy cases.
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