Mr Whittingdale: To ask the Chancellor of the Exchequer if he will make it his policy to maintain low value consignment relief for genuinely indigenous businesses in the Channel Islands; and if he will make a statement. 
The Parliamentary Under-Secretary of State for Transport (Mike Penning): The Department and the Highways Agency are committed to improving the levels of service experienced by users of the Dartford crossing. The Highways Agency and I will consider a package of measures, including better information and traffic management to help reduce the congestion at the Dartford crossing.
Mr Whittingdale: I thank my hon. Friend for that answer, but is he aware that, since the tolls increased, the delays when approaching the tolling booths are anything up to 45 minutes and more? That causes enormous frustration to those who use the crossing, which is increased by the fact that the original intention was to scrap the tolls once the bridge was paid for rather than to put them up.
Mike Penning: My hon. Friend knows that I am personally aware of the problems at the Dartford crossing, having used it for many years. The £40 million net that we recover from the crossing is a significant income, but we need to consider technology that is being used in other parts of the world, particularly in Australia, so that we can remove the barriers and increase the speed at which traffic comes through while also picking up the revenue that the country desperately needs.
I am extremely pleased to have this opportunity to debate the Select Committee report. It occupied more than a year of our time, and the coming of the general election prevented it from getting the debate that I felt it merited. At the start, it was not the Select Committee's intention particularly to focus on libel law. We realised that it was part of the agenda, but it was not the main issue. We were especially concerned with two things: the behaviour of the press in their reporting of the McCanns case, and what appeared to be the growth of a privacy law in the UK, particularly as a result of the judgment regarding Max Mosley. We devoted a lot of time to both those issues and were then slightly sidetracked into another important matter: the behaviour of the News of the World and one of its journalists in intercepting telephone calls. I do not wish to talk about that this afternoon; we spent a lot of time on it in the Committee. My main concern is to highlight that, in my view, the report's most important recommendations, which did not get the attention they merited because of the distraction caused by those other issues, were on libel, and on the concerns that are now widely felt, both in this country and around the world, about how UK libel laws operate.
I would like to put on record a few words of thanks. My thanks go to the staff of the Committee, who had to work very long hours over a lengthy period-not just the staff of my own Committee under Tracey Garratty our principal Clerk, but Hannah Stewart who was seconded to us from the Justice Committee. We also had the benefit of the advice of Professor Brian Cathcart and Sara John. We also had a lot of help from lawyers. None of the members of the Select Committee were lawyers and we were dealing with very technical and often complicated legal issues, which required several towels around the head on many occasions. We had a lot of advice particularly from people who came and gave up their time: Sir Charles Gray, recently retired from the High Court, Alasdair Pepper of Carter-Ruck, Andrew Caldecott QC, and Desmond Browne. If they had billed us at their normal rates, the House of Commons would probably have been bankrupted. They gave advice as part of a pro bono publico exercise, which was greatly appreciated.
Joan Walley (Stoke-on-Trent North) (Lab): Members of Parliament who do not have the time to sit on a Select Committee or who are not appointed to one owe a debt of gratitude to those who do serve on one. As a Member of Parliament who is not on a Select Committee, I should like to say that many of us have really valued the very detailed, technical and legalistic work that has been done by this Select Committee. Does the hon. Gentleman agree that that makes it all the more important that the Minister, in his response, should recognise that these are not just the recommendations of this particular Committee as a result of the work done by people such as my hon. Friend the Member for Newcastle-under-Lyme (Paul Farrelly) and others, but that this is the Select Committee speaking on behalf of the whole of Parliament? That is why it is important that the Government respond to the individual detailed recommendations.
Mr Whittingdale: I entirely endorse the hon. Lady's comments. That is exactly the value of Select Committees, and I am pleased to say that they are becoming more widely recognised. When we set off, we did not anticipate that the inquiry would be quite as long and detailed as it was. It was, however, one of the most fascinating and satisfying inquiries in which I have participated. At the same time as we were having the debate in the House, there was a substantial debate and a growing clamour outside the House. I should pay tribute, as my colleague from the Committee has already done, to the work of Index on Censorship, English PEN and Sense about Science. As part of their campaign they mounted a petition, which I think received 52,000 signatures, and I imagine that every Member of the House will have received e-mails from constituents expressing their concern about the operation of the libel laws. It is not an immediately obvious subject for generating great concern, but it is becoming such an important issue that a lot of people did feel very strongly about it.
The two principal conclusions that we reached-I will go into a little detail in a minute as to why we reached them-were that, in this country, the way in which the libel laws are balanced and the costs attached to going to court in a libel action, are having a seriously damaging effect on investigative journalism, standards within the press and legitimate scientific debate. As a passionate believer in freedom of speech and in the essential role that a free press must play in a healthy democracy, I believe that that matter should be of concern to every Member of this House.
However, as if that were not enough, the Committee also discovered that Britain is now cited alongside authoritarian countries as a place where the press is being suppressed because of the actions of the state-in this case, the libel laws. Committees are sometimes criticised for going on foreign trips, but, in this case, it was immensely valuable that we were able to go to America and talk to some of the people who were directly affected, including authors and journalists. We also discussed with the American judiciary how they viewed our system, and we spoke to legislators at state and federal levels. I shall deal later with libel tourism, which is very important.
A host of different issues affect the operation of our libel laws. Some of them are being dealt with, or at least addressed, in Lord Lester's Defamation Bill, and I was pleased to hear my hon. Friend the Minister speak about the Government's intention to examine all the issues and, in due course, to produce a draft Bill that we can debate at length. It is reassuring that they have taken on board the necessity of addressing the matter urgently. However, as the hon. Gentleman said, probably the biggest issue affecting the whole libel system in the UK-how much it costs for somebody to defend a libel action-is not actually covered by Lord Lester's Bill. None of us imagines that lawyers are ever cheap, but, in the case of libel, trials are often very long, no legal aid is available, and solicitors and barristers charge, frankly, eye-watering sums.
We had a slightly surreal debate in the Committee between various lawyers as to whether the average was £400, £500 or even £600 an hour. To most people, any of those three figures is extraordinary, and, given the time that can be taken, it is easy to see how the clock ticks quickly and the amount of money increases rapidly, to the extent that it is now said that the cost of a libel case in the UK is some 140 times the European average.
Paul Farrelly: Would the hon. Gentleman agree that the hourly rates actually double in many of the cases that are brought under conditional fee arrangements? The record shows that the so-called no win, no fee scenario is, as one would expect, nearly always a case of always win, double the fee.
Mr Whittingdale: The hon. Gentleman pithily encapsulates the situation, which I shall come on to later. He is absolutely right, and that makes the situation even more damaging for any defendant facing a libel action.
My hon. Friend the Minister referred to the work of Lord Justice Jackson, who gave evidence to the Committee alongside the Master of the Rolls and addressed the broader question of costs in all civil litigation. I know that the Government have listened to his advice, which was that we should not pick out one particular branch of civil law and address that, but address the whole thing together. As my hon. Friend said, that was not the view of the previous Government, and I have some sympathy with their position. The matter is urgent, which is why the then Justice Secretary, the right hon. Member for Blackburn (Mr Straw), decided to move on defamation cases ahead of the rest of civil litigation. I hear what the Minister says, but I hope that there will not be further delay-we must address the matter quickly. By all means, let us address it in the round and look at all the costs involved in civil litigation, but let us not spend a long time doing so.
Various solutions have been advocated, and we probably need to adopt a combination of them. The first thing the Committee considered was the suggestion simply to cap costs-to set a limit beyond which one should not be able to go. We accepted the evidence we received that that is a blunt instrument. It is difficult to predict the direction of a case, so capping is probably not a realistic solution. However, various solutions undoubtedly could
be introduced: greater cost budgeting and case management, and a pause every now and again to see how costs are progressing. Those are sensible options, but the real problem, as the hon. Gentleman said, is conditional fee arrangements, which were introduced with wholly good intent. I absolutely accept that the wish to make the legal process available to people who would otherwise struggle to afford it is an entirely worthy objective. The intention was that a legal practice would be allowed to charge a success fee if it won a case, in recognition of its risk in taking on a CFA. If it lost the case, it would not get any money, so the fee was a return for the risk.
The problem we discovered fairly rapidly was that the practices that specialise in CFAs are very thorough and do not actually take any risks. They go through the cases that are put to them for potential CFAs and accept them only if they are almost certain that they will win. We struggled to get the exact figures for the proportion of CFA cases that were won and lost, but it was clear that, overwhelmingly, the cases that were taken on a CFA were a pretty safe bet. On that basis, we found it difficult to understand why firms needed a 100% success fee on top of their costs. As I said, the costs are astronomical to begin with; they then double them, as the hon. Gentleman indicated, by imposing a success fee.
That is not the end of the story. An additional cost is after-the-event insurance, which is a premium taken out by the claimant in case they do not win, and which is chargeable to the defendant in the event that they lose. Such insurance can cost anything up to £65,000 plus tax for every £100,000 worth of cover, so we are now talking about almost 270% of the costs that can be awarded against a defendant in a libel action. The extraordinary thing about after-the-event insurance is that if the defendant loses, obviously he will have to pay the claimant's premium, but if the claimant does not succeed, he does not have to pay the premium. The insurance is marketed on the basis that one can take it out but not have to pay for it at all. It is simply another cost imposed on the defendant, and, because there is really no incentive for a claimant to keep costs down, it is a licence for companies to set their own sums and print money.
The effect of those three things taken together is that now many newspapers will not seek to defend a libel action, even if they are convinced that they have a strong case. They will regard it as quicker and cheaper to settle out of court. Perhaps even more worrying is that often they will not print the story in the first place, simply because of the danger that they might get sued. That chilling effect on press freedom and journalism causes great concern.
Paul Farrelly: The hon. Gentleman mentioned cost-capping and the importance of speedy reform. Does he agree that costs have become so surreal that when capping is mentioned as a measure to try to reduce them, a great number of the legal fraternity argue that actually it could increase costs because of the cost of cost-capping meetings, and that, as a consequence, nothing happens?
Mr Whittingdale: I entirely agree with my hon. Friend-I call him my hon. Friend in the spirit of the Select Committee. What he describes introduces another legal argument, which is, of course, billable. I will not say that this is a racket, but the lawyers do very well out of the process.
The Committee came up with a couple of recommendations to address these problems. The previous Government suggested that a 10% cap be set on success fees, but as my hon. Friend the Minister rightly said, the proposal did not find favour in the House when it was introduced before the election. The Committee's solution was not quite to introduce a straight 10% cap, but to say that the success fee that could be recovered from a defendant should be set at 10%. We did not feel it right to interfere with the arrangement between the claimant and their legal representatives; if the claimant wishes to pay a proportion of their damages in the form of a success fee, that is a matter for them. However, we said that the legal entitlement to recover from the defendant could be capped at 10%. Furthermore, for the reasons that I have set out, I view after-the-event insurance with some scepticism, and the Committee said that it should be made irrecoverable in its totality. I remain of the view that those two measures are sensible and would go a long way to removing the sting that currently exists in conditional fee arrangements. Obviously, that will be a matter of great debate over the coming months, and I leave it to the Minister to ponder those issues.
The issue is not just costs; there is a whole variety of other issues, many of which Lord Lester's Bill addresses. One issue is the multiple publication rule. Libel laws were written at a time when the internet did not really exist, and its advent has changed everything. That is true of the permanence of articles and statements, which can now be found on Google at the press of a button. The old Duke of Brunswick case also becomes much more serious in the age of the internet. Clearly, it is widely recognised that that should be addressed.
There are a couple of defences that must, on the face of it, make sense, but which are slightly unclear in legal terms at the moment. One is the defence of fair comment, and I want to say a quick word about the impact of libel law on proper scientific debate, an issue on which Sense About Science has done a lot of work. I pay particular tribute to Simon Singh, who is a very brave man for deciding not take lying down the legal action brought against him by the British Chiropratic Association after he suggested that there might be some debate about the medical effectiveness of chiropracy in treating certain conditions. He was willing to put up a great deal of money from his own account to appeal the judgment. Several scientific journals now say that they hesitate before carrying perfectly legitimate scientific papers that contribute to debate, because of the potential for organisations, and particularly big corporations, to bring libel actions. Libel is about whether someone is defamed; it should not be used to interfere with scientific discourse, which is important if scientific knowledge is to advance. The fact that Simon Singh was willing to defend himself and proved triumphant in the end was important and drew attention to the fact that the issue needs to be addressed.
The other defence that the Committee looked at, and which the hon. Gentleman mentioned, is the Reynolds defence of responsible journalism. The two landmark cases of Reynolds and then Jameel set out the hurdles that a defendant must demonstrate they have got over before they can use the defence of responsible journalism. There is some debate about the difficulty of meeting each of those tests, with the result that few defendants have used this defence, and that has been a cause of concern to us.
It was drawn to my attention not more than two hours ago that the outcome of the Flood v.Times Newspapers case has been published. This is the first occasion on which the Court of Appeal has overturned a Reynolds defence. Times Newspapers used a Reynolds defence in an action brought against it by a Metropolitan police sergeant. It said that what it had published was in the public interest and that it had met the relevant tests, but the Court of Appeal overturned the initial judgment on appeal. I do not want to say anything about the merits of the individual case, but I imagine that the fact that there is a further constraint on using the Reynolds defence will mean that adopting it becomes even less attractive to serious newspapers. I share the view of the hon. Gentleman that putting these things into statute carries a risk as well and that it might not be the most sensible way of strengthening them. However, it is important that it should be a legitimate defence for journalists investigating stories that are plainly in the public interest-we are talking not about muck-raking, but about serious investigative journalism-to show that they have used their best endeavours to meet all the various tests. We may need to look at that again in the light of certain developments.
Paul Farrelly: Does the hon. Gentleman agree that the conclusions of the libel working group also highlighted the danger that a codification in law could become a rigid checklist in itself? It would also be very costly to mount a defence. However, the group was more sympathetic to statutory backing for the principles that underlie a defence of responsible journalism, which have already been developed in common law. That might be a fruitful way of proceeding.
Mr Whittingdale: The degree of flexibility that that might provide is clearly better than having a very detailed set of boxes, each of which has to be ticked. The hon. Gentleman's suggestion is probably a sensible way to develop things.
Taken together, all these issues would go some way not towards weakening our libel laws, but towards restoring people's absolute right to defend their character and reputation. The other side of that coin, however, is the right of the press to investigate and to expose and the right of scientific journals to carry out legitimate debate. I hope that all those things will feature in the Government's draft Bill.
I turn now to the way in which Britain's libel laws are viewed overseas, because that should be of huge concern to the Government. The issue is encapsulated in the case of Rachel Ehrenfeld, whom the Committee met when it went to the States. She wrote a book in which she suggested that a Saudi Arabian business man, who has Irish citizenship, was in some way providing financial support to al-Qaeda and terrorism. An action was brought against her in the UK on the basis that 23 copies of the book had been sold here. Obviously, it was also accessible on the internet, so there was publication in that sense as well. However, the book was not widely available in the UK, and it is fairly clear that the case was brought here not because this was where the damage was done, or because Rachel Ehrenfeld or the Saudi Arabian had British citizenship, which they did not, but because the libel laws here were seen to favour claimants. On the back of that, we discovered that there are now widely shared fears in the United States. The Association of American Publishers submitted a statement to the Committee on the Judiciary of the US House of Representatives, which described libel tourism as
"the cynical exploitation of plaintiff-friendly foreign libel laws as a weapon to intimidate and silence U.S. authors and publishers."
Dr Julian Lewis (New Forest East) (Con): I am not an expert in the area in question, although I have more than once had to bring a libel action. I think I am right in saying that in America pretty much anyone in the public eye can falsely be accused of quite serious wrongdoing but will have no recourse to a defamation suit. I acknowledge that the case that my hon. Friend used as an example is a worrying one, but I hope that he will not argue that we should adjust the libel laws in this country to prevent people who are defamed from taking action, just because in America people who are defamed are not allowed to take action. It would be a retrograde step to allow open season on reputations to the extent that that is allowed in the USA.
Mr Whittingdale: My hon. Friend raises an important point, and I agree. My hon. Friend the Member for Shipley (Philip Davies), who sadly cannot be present this afternoon, thinks that we should move towards the American system, where two things apply. First, the burden of proof is reversed and it is up to the people concerned to prove that they did not do what is alleged, whereas here a newspaper or journal must demonstrate that they did. Secondly, in America the first amendment trumps virtually everything. It is essentially impossible to get a pre-publication injunction. The Committee was told by people in public life that for such people there is essentially no defence against libel other than to make their case in public and try to convince people that what was said was wrong.
I do not go that far. Some of the criticism of the UK's libel laws in America is based simply on the fact that they disagree with our stance and think that we should adopt their system. That is not the reason I am concerned. I am concerned about the use of the UK courts by people who have no connection with the UK; it is the tourism aspect. That is a much narrower, but nevertheless very important, issue. As an example of the consequences I want to quote a joint submission to the Select Committee by Advance Publications Inc., the Association of American Publishers, Associated Press, Bloomberg, CBS television, Global Witness, Human Rights Watch, the Los Angeles Times, Macmillan, NBC, The New York Times and others. Perhaps the most important passage reads:
"Leading US newspapers are actively considering abandoning the supply of the 200 odd copies they make available for sale in London-mainly to Americans who want full details of their local news and sport. They do not make profits out of these minimal and casual sales and they can no longer risk losing millions of dollars in a libel action which they would never face under US law. Does the UK really want to be seen as the only country in Europe-indeed in the world-where important US papers cannot be obtained in print form?"
Paul Farrelly: I do not want this to become a conversation between members of the Select Committee, but does the hon. Gentleman agree that in the internet age matters go rather further than that? We received evidence that aggressive firms in the field of so-called reputation management-the two names that came up most frequently were Schillings and Peter Carter-Ruck and Partners-were finding so-called defamatory articles on the internet and scouring the world for potential plaintiffs on whose behalf they could act, simply because the article was accessible from the UK. They could point out to such people that they might well win under Britain's libel laws and say, "So bring an action."
Mr Whittingdale: I think that there is evidence of that. I hesitate before accusing the two firms that the hon. Gentleman named, although they happened to crop up time and again in evidence. Concerns have been expressed about the way CFAs are used in ambulance-chasing cases-with ads on television saying, "Have you fallen over? Ring up this lawyer, because you can win thousands of pounds." This is basically the same thing, so there is a legitimate concern.
I think that what should really make the Government concerned, in relation to attitudes towards the British system, is the fact that it is not only publishers and newspapers who are making such comments. The UN Committee on Human Rights, members of which we met, has been very critical of the UK system. In addition, the US Government, at state and federal level, is taking action in response. We went to Albany, where New York state has passed what is called the Libel Terrorism Protection Act. The title is intended to suggest that we have been giving active succour to terrorism through our libel laws. The Ehrenfeld case was actually the cause of it; indeed, Rachel Ehrenfeld went to the New York state legislature to press for action to be taken.
The Act allows a judgment against an American citizen to be ignored or overturned in America if it is shown to be a breach of his or her first amendment rights. However, that has happened not only in New York state; such legislation is appearing in other states and has also passed into Congress. I have the report of 13 July-two days ago-stating that the Senate Judiciary Committee unanimously passed bipartisan legislation aimed at protecting authors and journalists from libel law suits filed abroad. Essentially, the New York Bill has now been taken up, and it looks as though it will pass into federal law.
When the previous Lord Chancellor, the right hon. Member for Blackburn, gave evidence to the Select Committee, he said first that he was not convinced that the situation was a great problem. Secondly, he did not seem terribly fussed even if foreign Governments were taking the attitude I have described. He said that we had learned that there had been no representations from the British Embassy to defend our system; those concerned had sat by and let these things go on. I find it profoundly worrying that Britain's closest ally-the country that, whatever one thinks of America, is regarded as a bastion of free speech-should regard us as so restrictive and hostile to the principle of free speech that it feels it necessary to pass an Act such as I have outlined. Although that Act does not specifically refer to the UK, it is perfectly clear that it is directed at this country. I hope that, given that the Bill is now actively passing through the Senate and Congress, the Minister will start to talk to American legislators as a matter of urgency, and perhaps reassure them that the Government intend to deal with the issue.
Paul Farrelly: Does the hon. Gentleman agree that, very soon after making those statements to the Select Committee, the previous Lord Chancellor was open-minded enough to change his mind completely? He added the issue of libel tourism firmly to the remit of the libel working group, and one of the four main areas on which it reported at the end of March was libel tourism and reforms to court procedures to stop abuse of process and abuse of forum.
Mr Whittingdale: Indeed, that is right, and the hon. Gentleman is correct to draw attention to it. I am delighted that the right hon. Gentleman came round to our view that the matter was a serious one, which needed to be addressed.
One or two other matters occurred to the Committee, one of which was referred to in passing by the hon. Member for Newcastle-under-Lyme, although, perhaps out of modesty, he did not devote as much time to it as it deserves. That is the issue of this place and the reporting of our proceedings. It is well known that the hon. Gentleman uncovered the existence of a super-injunction taken out on behalf of Trafigura and tabled parliamentary questions about it, which led to a spat between Carter-Ruck and The Guardian about whether it was legitimate to report the fact that those questions had been tabled. There is no question about where parliamentary privilege lies: the hon. Gentleman is completely protected under parliamentary privilege in tabling those questions.
The situation becomes a lot less clear-this was news to me-in respect of a newspaper's right to report the fact that the hon. Gentleman had tabled the questions. Previously, I had the impression that the reporting of responsible activity was allowed, under the Parliamentary Papers Act 1840, but Carter-Ruck argued vigorously with The Guardian that the super-injunction prevented the newspaper from reporting the questions. The Guardian's in-house lawyer confirmed that that was her view as well. It later became apparent that the House authorities probably shared Carter-Ruck's view. In my view, that is a profound threat to this place.
In a way, there is no point in our being able to say things in Parliament or table questions if nobody is allowed to report them. In the Select Committee's view, any uncertainty about reporting parliamentary proceedings and the extent to which privilege allows Members of Parliament to raise matters with a degree of protection against libel action, needs to be addressed quickly and removed. Lord Lester has included this in his Bill.
The two last things that I will mention are not principally about libel, but touch on it. We Committee members spent a lot of time considering privacy, and the balance between articles 8 and 10 of the European convention on human rights, which has been used to bring in a privacy law in this country. That matter touches on libel because some people now choose to use privacy legislation rather than libel legislation. Those two kinds of legislation are not separate. Under privacy legislation, people do not necessarily have to say whether the story is even true-they can just use such legislation to prevent it from being published. That needs to be borne in mind if we are going to have the thorough overhaul that I hope the Minister intends.
The last area that I should like to mention, which is complementary to libel law, is the self-regulatory mechanism adopted by the press-the Press Complaints Commission-which the Committee supports. There is a lot of debate about the effectiveness of the PCC, but it offers an alternative. If people choose to go to court and mount a libel action, it can take a long time and cost a lot of money, but at the end they might get a definitive statement that they have been defamed-and they may get a lot of money as a result. The PCC can take action quickly and is free, but people do not get any money: the most that they can hope for is a judgment by the PCC that the newspaper was wrong to carry a story. Each option has alternative attractions; each mechanism is useful, and one cannot substitute for the other.
The Committee was concerned about the most serious serial libel that has taken place in the past 50 years-perhaps within memory-which is that suffered by the McCanns, who were subjected to libel not once, but day after day, and not just in one newspaper, but in newspapers across the whole range of Fleet street. That was eventually recognised and a lot of apologies were made, and payments were also made, but that cannot have made up for what they suffered at what was already a terribly distressing time for them. We were concerned that the self-regulatory mechanism of the press appeared to have failed in that instance, and we made a number of recommendations about how it should be strengthened. The role of the PCC needs to be borne in mind when looking at libel, because it and the courts deal with similar problems, but perhaps from different ends.
I think that I have spoken for long enough, but I have spoken for so long because we in the Committee spent a great deal of time on this serious issue. I am pleased that statements in the manifestos of all three parties, and in the programme of the coalition Government, are now being progressed and that the Government have made it clear that they are determined to take action in this area. I hope that we, as a Committee, have helped that process and that we will continue to do so in the debate on the draft Bill when it appears.
Mr Hunt: I thank my hon. Friend for a thoughtful question, as ever, on the topic. He is absolutely right that media companies of the future will have to operate on different platforms. That is why one of my first decisions was to accept a recommendation by Ofcom to remove the regulations on cross-media ownership locally to allow local media operators to develop new business models that let them take product from newspapers to radio to TV to iPods to iPads and so on.
We do not currently have any plans to relax the rules on cross-promotion. Indeed, the regulations on taste, decency and political impartiality on Five remain extremely tight, but we are aware of the need to lighten regulations in general because, if we are to have a competitive broadcasting sector, we must have one in which independent players can also make a profit.