Today's comprehensive report by MPs on privacy and the media recommends a series of changes to Britain's libel laws and to the regulation of newspapers, reserving some of its strongest language for the Press Complaints Commission, which it describes as "toothless".
To toughen the PCC, it suggests that the body should be able to levy fines or even suspend newspaper publication for a day. Press proprietors would have to voluntarily agree to give the PCC such a power, which they so far show no sign of doing.
Many of the suggestions are tentative, reflecting the awkward problem of how to police the press while encouraging free speech.
The committee has drawn up a long list of ideas for possible reform of libel law, injunctions and superinjunctions, many of which were prompted by recent controversial cases in which the Guardian and others have collided with large corporations such as Tesco, Barclays and Trafigura. News media in such cases have been saddled with gagging orders as well as huge legal costs.
The key recommendation is that lawyers should no longer be able to claim extortionate 100% "success fees" for winning cases against the media, but should be limited to an extra 10%.
The committee also wants it to be made more difficult for foreign "libel tourists" and big companies to bring British libel actions. John Whittingdale, the Conservative chairman of the committee, said: "There is a growing clamour of voices calling for reform of our libel laws in order to reduce the cost."
In evidence to the committee Jack Straw, the justice secretary, earlier told the committee that "the level of fees for plaintiff's lawyers is too high" and today's report notes that Carter-Ruck, the libel lawyers frequently criticised for their fees, say their "base rate" is £400 an hour.
A second more technical reform which is under active consideration in Whitehall and is backed by the committee would impose a one-year time limit to sue for an online libel. At present, anyone can bring a legal action for an indefinite period over a posted article.
Some of the harshest language in the report is targeted at the reporting of the Madeleine McCann case. It says that competitive and commercial factors led to "abysmal standards" of coverage of the story, and that this eventually led to large libel payouts, particularly by the Express papers. Despite this, the PCC failed to take "forceful action" as it could have done, and no journalist was apparently disciplined.
The PCC's failure to act was "an indictment on its record", and together with similar PCC failures over the News of the World hacking scandal, led to the committee's call for PCC reforms, including greater lay membership and transparency.
The other case around which the committee report pivoted was the Max Mosley affair. Mosley, who won a privacy case against the News of the World for publishing an unjustified story and a video about his sadomasochistic sex activities, has been campaigning for a law that would compel newspapers to notify their targets in advance, before publishing unwelcome stories about them.
After hearing testimony from Ian Hislop, editor of Private Eye, Alan Rusbridger, editor of the Guardian, and the campaigners Global Witness over the danger that the unscrupulous would seek gagging injunctions if alerted to stories, the committee did not recommend making it a legal requirement.
But the MPs said editors should be encouraged to "pre-notify" targets, and failure to do so could lead to heavier damages in court cases.
Gagging the Guardian – How big companies used law to curb reporting
Tesco
Alleged by Labour committee member Paul Farrelly to be "the most flagrant abuse of the libel laws by a big corporation". The report said Tesco sued the Guardian, and the editor personally for 'malicious falsehood', after the paper claimed it was avoiding corporation tax through complex offshore property deals. The report said Tesco declined to meet the reporters and gave limited written responses. In the circumstances, the newspaper misunderstood the purpose behind the deals, but the story's thrust – regarding tax avoidance – was correct. The Guardian none the less issued an extensive apology. Two months later a settlement was reached out of court. By then, the costs had dwarfed any damages. Yesterday's report detailed "concerns that large companies could stifle legitimate public debate by initiating defamation actions". It said: "Corporations could be forced to rely on the existing tort of malicious falsehood where damage needs to be shown and malice or recklessness proved. We also consider that it would be fairer to reverse the general burden of proof in such cases."
Trafigura
The committee detailed the super-injunction sought against the Guardian by the oil traders, whose behaviour in having toxic waste dumped in Ivory Coast made thousands of West Africans ill and led to the firm handing over £30m in compensation. Trafigura got a gag order from a judge which sought to prevent the newspaper from publishing the contents of a damning expert report, and from revealing the very existence of its legal moves.The company went too far, however, and sparked a constitutional crisis when they tried to prevent the Guardian from reporting a parliamentary question tabled by one of the committee's own members, Paul Farrelly. Yesterday's report details how the legal manouevres of lawyers Carter-Ruck eventually collapsed after on-line revelations on Twitter.
Barclays
The bank obtained a gagging injunction after the paper posted documents on the Guardian website, detailing a series of multimillion-pound tax avoidance schemes operated by Barclays, leaked by an insider. The court order, granted on grounds of breach of confidence, was used to force the paper to take the documents down, and temporarily prevent the paper revealing that they remained available online on WikiLeaks. The report said: "The interim injunction was made over the phone by Mr Justice Ousely at 2.30am ... The Guardian was also barred from publicising their whereabouts on the internet, and the absurdity was heightened when the [LibDem] peer Lord Oakeshott used Parliamentary privilege to reveal where the sites could be found."
The report concluded: "The evidence we have heard shows the impact of the internet on the leaking of information has fundamentally altered the dissemination of information, and consequently breaches of confidence." In particular, the Trafigura and Barclays cases raise issues over the use of injunctions for breach of confidence by companies ... the ease with which they appear to be granted and the consistency of practice in the court system."
