The law is still on the side of the rich

This case shouldn't blind anyone to the fact that libel actions continue to be used as a means of stifling public debate.

It's a free country, isn't it? Whenever I hear that irritating cliché, I think of our libel laws and all the anxious legal discussions I have sat through in newspaper offices. In a country where there is still no unqualified "public interest" defence, an honest mistake or the lack of forensic proof can land proprietors with a huge bill for damages and costs, but journalists get little sympathy from a public with a fairly low opinion of the media.

It's a free country, isn't it? Whenever I hear that irritating cliché, I think of our libel laws and all the anxious legal discussions I have sat through in newspaper offices. In a country where there is still no unqualified "public interest" defence, an honest mistake or the lack of forensic proof can land proprietors with a huge bill for damages and costs, but journalists get little sympathy from a public with a fairly low opinion of the media.

In a climate where reporters habitually doorstep the victims of tragedies and private life is treated as public property, the libel laws tend to be regarded as one of the few restraints on a press which is often vicious and bullying. Ordinary people forget that the chief beneficiaries are wealthy celebrities with thin skins or out-and-out crooks like Robert Maxwell, who could afford a battery of lawyers to scare reporters from looking too closely at his business deals.

I have also seen the libel laws in operation from the other side, when a penniless friend tried to get redress for a wholly untrue allegation made against her in a book and was forced - like the McLibel Two, who achieved a landmark victory at the European Court of Human Rights in Strasbourg on Tuesday - to represent herself.

Even before the lengthy battle fought by David Morris and Helen Steel, who have finally turned the tables on one of the world's best-known brand names, it was obvious that the libel laws were stacked in favour of wealthy people and large corporations - and that was the case whether they happened to be the complainants, as in McDonald's original libel suit against the two activists, or the defendants.

At the very least, this week's judgment has addressed head-on the injustice arising from a mismatch in resources between the two sides in a libel action. Although McDonald's was not a party to the Strasbourg case, its behaviour in pursuing the two defendants so relentlessly through the British judicial system has been shown in a very unflattering light by the court's conclusion that they did not get a fair trial.

It all began in the 1980s when McDonald's started using the threat of libel writs to scare a tiny group of activists, London Greenpeace (no relation to the better-known organisation), into apologising for handing out a home-made flyer accusing the company (among other things) of selling unhealthy food.

Twenty years later, at a moment when the dangers of eating fast food are discussed on a daily basis, this does not seem a remarkable allegation. Even at the time, the protest was not headline news, and the global success of the brand in the intervening period hardly suggests it was brought to its knees. Three of the activists apologised to avoid legal action, but Steel and Morris stood their ground and the case went to court in 1994. McDonald's hired a £2,000-a-day QC and a £1,000-a-day solicitor while the two defendants could not afford even a high-street solicitor.

Three years later - not quite Jarndyce v Jarndyce, but the mills of British justice grind exceeding slow - they were ordered to pay McDonald's £60,000 in damages, reduced to £40,000 on appeal. The figure was wildly disproportionate to the actual damage they had inflicted on the company, and there is no doubt that the trial put Morris and Steel through an extraordinary ordeal, even though some of the allegations - paying low wages, for example, and cruelty to some of the animals used to make burgers - were well-founded.

In a hugely important judgement, the court in Strasbourg has ruled that the British government was in breach of article six of the European Convention on Human Rights, which guarantees the right to a fair trial, by refusing to give the defendants legal aid. Although the law has recently been changed to allow defendants in libel cases to receive state funding, it is believed that none has yet done so; after Tuesday's judgement the Government will have to ensure that a wider range of defendants are eligible for state-funded legal advice, although its preference is clearly to encourage more lawyers to offer no-win no-fee deals.

The court also found that the damages awarded to McDonald's were disproportionate, even though they have not been enforced - just about the only aspect of this saga that is to the company's credit - and awarded Morris and Steel €20,000 and €15,000 respectively.

Such an outcome should act as a warning to other large corporations to think twice before using the full rigour of the law to go after defendants with next to no resources. But the Strasbourg judgement is important not only because of this eye-catching element, in which it has publicly sided with David rather than Goliath.

The court also ruled that article 10 of the European Convention, which guarantees freedom of expression, had been breached, highlighting the problematic (to say the least) relationship between this country's libel laws and contemporary interpretations of human rights.

The court accepted both that the law on defamation is a restraint on free speech and that the restriction is justified as a means of pursuing 'the legitimate aim of the protection of the reputation or rights of others". But the judges went on to ask how far that restraint is necessary in a democratic society and to insist on "a measure of procedural fairness and equality of arms" in the interests of free expression and open debate.

Lawyers will no doubt argue over precisely how this element of the judgement is to be interpreted in relation to future cases. But the judges' recognition of the "chilling effect" of defamation laws on free expression is welcome, especially in a world dominated by rich corporations and hyper-sensitive celebrities and politicians. Who could forget the libel action brought three years ago in Germany by Gerhard Schröder, when a news agency dared to suggest that the then 58-year-old Chancellor dyed his hair?

Of course this is not the easiest argument to make when newspapers behave badly, as The Daily Telegraph did - at a cost of £150,000 in damages, plus costs estimated at £1.2m - in its battle with George Galloway. The paper seems to have been so excited by the discovery in Baghdad of documents purporting to show that the MP had been in the pay of Saddam Hussein that it published them without giving him a proper chance to reply, compounding the error with tendentious editorial comments.

The paper failed in its attempt to use the "Reynolds defence" - which allows the media to publish information even if it turns out to be untrue and defamatory, as long as it is in the public interest and the product of responsible journalism - and some observers are alarmed by the number of conditions newspapers have to fulfil to use a defence of qualified privilege.

But such cases, egregious though they are, should not blind anyone to the fact that libel actions continue to be used as a means of stifling public debate. Ordinary people may not like journalists much, but the saga of the McLibel Two is a reminder that it is not just newspapers that suffer as a result. We have a bit more freedom that we did at the beginning of the week, but don't imagine that the rich and powerful will give up without a fight.