Thanks to the STALKER Sean Hyland for spotting this

Brought up, and read the First time.
Robert Flello:

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 the Member for Hammersmith (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.


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


Robert Flello:
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.

3 pm

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.”—[Official Report, 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.

"Dr Gerald McCann told the Leveson enquiry on oath that he had 'no objection to people purporting theories' about his daughter's disappearance, and told Leveson that he was 'a strong believer in the freedom of speech'."

"I would like to emphasise that I strongly believe in freedom of speech, but where you have people who are repeatedly carrying out inaccuracies and have been shown to do so, then they should be held to account. That is the issue."