(05-14) 18:12 PDT — Legislation designed to thwart “libel tourism” – the practice of trying to silence one’s critics by suing them in England, where defamation is easier to prove than in the United States – cleared the state Senate without a dissenting vote today. The bill, prompted by the case of a Saudi businessman who sued a U.S. author in a British court for accusing him of financing terrorists, would prohibit enforcement of most foreign libel verdicts in California. The Senate’s 38-0 vote moved the legislation by Sen. Ellen Corbett, D-San Leandro, to the Assembly. “Britain has become a mecca for mostly rich folks who can litigate there to obtain judgments for bad things people say about them in California or anywhere else,” said Thomas Newton, lawyer for the California Newspaper Publishers Association, which is sponsoring the bill.

One difference between British and U.S. libel law is that a U.S. plaintiff must prove that the defamatory statement was false. In Britain, once the plaintiff shows that a statement would harm his or her reputation, the defendant must prove it was true. The U.S. Supreme Court has also ruled that a public official or prominent person suing for libel must prove that a falsehood was knowing or reckless, a requirement not imposed in Britain or any other nation. Corbett’s bill, SB320, would allow a California court to enforce a foreign award of damages from libel only if it came from a nation that provided the same protections to defendants that U.S. and California courts have recognized.

A similar law was signed last year in New York. Legislation pending in Congress would go further by allowing U.S. newspapers and other libel defendants in such cases to countersue for damages, including the costs of defending themselves in foreign courts. Such suits have proliferated in recent years. Forbes magazine settled a 1997 suit filed in England by a Russian tycoon who had been portrayed as a mob boss. Gov. Arnold Schwarzenegger paid an undisclosed sum in 2006 to settle a libel suit by a British television interviewer over comments by Schwarzenegger’s campaign staff. Aides said the woman, interviewing Schwarzenegger in 2000 about one of his movies, had encouraged him to touch her breast.

Although there has been no organized opposition to Corbett’s bill, a lawyer for the Saudi entrepreneur whose suit gave rise to the measures in both California and New York said today that the legislation “addresses a problem that actually doesn’t exist.” “In fact, no foreign libel judgment has ever been enforced in the United States,” said the attorney, Timothy Finn. Even without such laws, he said, U.S. courts have refused to enforce libel verdicts from nations that fail to protect the freedom to speak critically. But even the threat of being sued for libel overseas has a chilling effect on free speech, said Rachel Ehrenfeld, the New York writer who was sued by Finn’s client. “I’m an American citizen. I felt I had very good protection from the First Amendment,” Ehrenfeld said. She learned otherwise after publication of her 2003 book “Funding Evil,” which included documentation of the alleged role of Saudi billionaire Khalid bin Mahfouz in financing terrorism.

Bin Mahfouz, who has filed numerous suits disputing similar allegations, sued Ehrenfeld in England, where he owns property and where 23 copies of her book were sold online. Unwilling to hire a British lawyer and defend herself, she defaulted. Bin Mahfouz was awarded $15,000 in damages plus $210,000 in legal fees and court costs. Although Ehrenfeld hasn’t had to pay any damages, she said the verdict has made her reluctant to travel overseas and has hurt her research. “This seemed like a very targeted effort to silence the media,” she said.

E-mail Bob Egelko at begelko@sfchronicle.com.