Libel tourism is flourishing and London is the hottest destination. Its reputation as libel capital of the world has just been confirmed by figures that show that the number of defamation actions started last year was the highest for five years.
The number of cases lodged in the High Court jumped to 259 in 2008 ﾗ the biggest number since 2004 and up by 11 per cent on 2007.
Jaron Lewis, a media partner at the City law firm Reynolds Porter Chamberlain, said that the figures, from official judicial statistics, showed that libel litigation was thriving. “The high number of new cases launched last year shows that defamation remains a significant risk for UK publishers.
“Five years ago, commentators were saying that libel was dying. But such a conclusion was clearly premature.”
The figures confirm the UK as a forum of choice for libel claimants, a dubious reputation sealed in recent years through the funding arrangements that make it easy for claimants to mount actions.
Another factor is pro-claimant laws, lawyers say. These make it difficult for the media to defend claims, even when unmeritorious.
The growth in no-win, no-fee work for libel actions enables people to mount claims without having to find large sums in costs. The move has widened access to justice but also seen the media held to ransom in successive cases.
Lawyers act for nothing for claimants but can double their fees if they win the success fee. The costs can be prohibitive, fuelled also by the large insurance premiums that the claimant takes out to protect against the risk of losing.
Mr Lewis added: “For some publishers, the cost of losing a libel trial – or even winning one – might actually put them at risk of closure.
“It’s not the level of damages so much as the requirement to pay a claimantﾒs legal costs, which will often be a significant six-figure sum.”
With the threat of costs hanging over an action, few cases reach a full trial and most are withdrawn or settled before reaching the court doors.
The problem was also highlighted recently by Index on Censorship, the free-speech organisation, and English PEN, the charity that supports persecuted writers.
In a joint report they warned that libel laws are stifling free speech and risked turning England and Wales into a “global pariah.” They called for a cap on libel damages at £10,000 and shifting of the burden of proof so that claimants have to demonstrate damage rather than defendants having to prove the truth of allegations, as now.
They also want a stop on cases being heard in London unless at least 10 per cent of the offending publicationﾒs circulation is in the UK.
Last month the Government introduced a pilot scheme to try to manage costs in libel actions but few believe it will do much to reduce the huge sums media defendants may have to pay out.
Jack Straw, the Justice Secretary, last week pledged further action. He wants wholesale reform to end libel tourism with curbs on the fees that lawyers can earn in such cases.
He told The Sunday Times that large legal fees were jeopardising free speech and potentially curbing vital debate by scientists, academics and journalists.
In one case, a wealthy Saudi businessman successfully sued an American academic whose book on funding terrorism sold just 23 copies in Britain over the internet. He was awarded £130,000 damages and costs by London courts.
In another, a British consultant cardiologist, Dr Peter Wilmshurst, is being sued by an American company, NMT Medical, for questioning the effectiveness of a new heart implant device: his comments were posted on a US website but he is being sued at the High Court because a number of cardiologists read his article in Britain.
Hopes also rest on the recommendations of a review due out in the new year by Lord Justice Jackson on how to cut costs and delays in civil justice.
At least he would seem to have the country’s most senior judge, Lord Judge, on his side. The week before last the Lord Chief Justice said that the survival of a free press was essential to the “fabric of society and the values that we cherish.”
The present system, he said, in which one side carries no potential burden for costs while the other has the burden of its own costs, those of the other side including the “success fee” and insurance costs was “a little like Yeovil Town football pitch, only with one side playing uphill through both halves of a match.”
It created an imperative to settle “when you have a good case,” he said.
Lord Judge said that he was not “proud” that London was said to be the libel capital of the world and did not “regard it as a badge of honour.” And he was “deeply unsympathetic to forum shopping.”
Justice, he said, should be done where it needs to be done and where the alleged wrong had occurred not in the courts where the litigant might enjoy an advantage.
Meanwhile, he made clear he would apply the law as it stands if any such case came before him. Reform will clearly have to await Parliament.