Plans to cut the profits of law firms who bring libel claims against the media have been dropped, MPs have been told.
Jack Straw, the Justice Secretary, had promised an overhaul of Britain's libel laws after a review found the rules had a "chilling effect" on freedom of expression. Among the reforms was a draft law to reduce the fees charged by "no-win no-fee" lawyers in defamation cases from 100 per cent to 10 per cent.
But yesterday, the Commons Leader Harriet Harman said the plan was "not going anywhere", confirming that it would need to be reintroduced by the next government after the general election.
Last week the reform fell victim to a Labour rebellion, as four Labour MPs joined opposition parties on a House of Commons committee in voting against the Conditional Fee Agreements (Amendment) Order, amid concerns lawyers would stop taking the cases if they were no longer profitable.
Despite this defeat Mr Straw committed the Government to the changes, which reflected the findings of a review into the law of defamation in England and Wales published this year. The order was due to be put before MPs again yesterday, but Ms Harman said it would not be moved as she laid out a packed programme with the aim of forcing through as much legislation as possible before the end of the week.
Among the measures being considered by Labour is the possible creation of a new public interest defence in relation to "responsible journalism". There are also plans to curb "libel tourism", which has increasingly seen foreign claimants using English courts in the hope of winning big payouts.
A third proposal is the introduction of a single publication rule, which would mean that libel claims would have to be launched within a year of the original publication. Under the existing rules, lawyers working on Conditional Fee Agreements (CFAs) can claim success fees of up to 100 per cent – doubling their normal fees – from the losing defendants in defamation and privacy cases.
Media organisations say the success fee, intended to enable lawyers who work on CFAs to use the money to finance cases they lose, has made costs in defamation and privacy cases grossly disproportionate.
Last week's setback came after the former Commons speaker Lord Martin of Springburn delayed the progress of the Conditional Fee Agreements (Amendment) Order 2010 through the Lords by tabling a "motion of regret", forcing it to be debated on the floor of the House. Lord Martin's motion claimed there had not been "sufficient time for consultation with all of the professional and legal bodies concerned" and pointed to the "benefit of no-win, no-fee arrangements for those on modest and low incomes". The 10 per cent limit was also opposed by some eminent jurists on the Lords benches, including the former Lord Chief Justice Lord Woolf. It eventually cleared the Upper House without a vote after Lord Martin withdrew his motion, having been given assurances that further consultations would be carried out.
Jonathan Heawood, of human rights charity English Pen, said: "It's disappointing that a handful of MPs and ex-speaker Martin have blocked this important reform to reduce the outrageous cost of English libel law." Jo Glanville, of Index on Censorship, added: "The cost of libel litigation in England and Wales is 140 times the European average – this reform would have gone some way to lifting the chilling effect on free speech."
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