House of COMMONS









Tuesday 19 May 2009



Evidence heard in Public Questions 918 - 1016




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Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 19 May 2009

Members present

Mr John Whittingdale, in the Chair

Janet Anderson

Philip Davies

Mr Nigel Evans

Paul Farrelly

Mr Mike Hall

Alan Keen

Rosemary McKenna


Witnesses: Sir Anthony Clarke, Master of the Rolls, and Lord Justice Sir Rupert Jackson, Court of Appeal Judge, gave evidence.

Chairman: Good morning. This is a further session of the Committee's inquiry into press standards, privacy and libel, and we are concentrating particularly today on the making and implementation of the law. I would, especially, like to welcome our witnesses this morning, the Master of the Rolls, Sir Anthony Clarke, and Lord Justice Jackson; we are extremely grateful to you for coming. I might just add at this point that none of us on the Committee is a lawyer, so be patient with us on subjects of law.

Q918 Mr Evans: Conditional fee agreements were introduced to improve access to justice for both defendants and also for the claimants. Do you think it is working?

Sir Rupert Jackson: Well, undoubtedly, conditional fee agreements under the present regime are effective in terms of promoting access to justice for claimants. There is a concern that the balance which has been struck by the present regime is far from satisfactory and, if you would like me to explain in a couple of sentences why, I will. The rationale of the present CFA regime, under which success fees and ATE premiums are recovered from unsuccessful defendants, is as follows: if you take a cohort of cases, a block of cases brought on conditional fee agreements with ATE insurance, some cases, indeed most cases, won, as is the way of things, but some lost and, if you look at the overall financial position, once the success fees and the ATE premiums have been paid to claimant solicitors in the won cases and the ATE insurers have paid out costs in the lost cases, the overall effect is that the entire costs of all those cases are borne by the defendants and the claimants bear no costs whatsoever. In other words, litigation of this character has the entirety of the costs placed upon one side only. Now, that is the theory. When you come to the practice, there is evidence that more than the entire costs of the litigation is borne by the defendants. First of all, even if the ATE premiums are calculated with precise accuracy, they must include an extra element to cover the administration costs of the insurers and, on top of that, they must include an element of profit for the ATE insurers. That is all that happens, if the system worked to perfection. There is evidence, however, that ATE premiums are too high because there is no effective market force to control the ATE premiums paid by claimants to the insurers because claimants have no direct interest, they are never going to pay the premiums, win or lose. There are also suggestions in some of the evidence which I have seen that success fees are too high and do more than compensate the claimant lawyers for the cases which they lose. Now, this is a matter of controversy and it is something which I am looking into in my inquiry. There is, however, a growing body of evidence which suggests that the present CFA and ATE regime, which is of course satisfactory for claimants, and one must not lose sight of access to justice, also has the consequence that significantly more than the entire costs of the relevant litigation is cast upon the defendants. As you know, Mr Chairman, I have been tasked with reviewing the costs of civil litigation this year and to make recommendations to promote access to justice at proportionate costs, and this is a matter which I am looking into.

Sir Anthony Clarke: Can I just add that I agree with that, but the other point I would like to make, which is a point I made in the paper which I have submitted, is that the problems relating to CFAs are problems which cover the whole range of litigation, if you like, and I know that the focus of the Committee is on the effects on the media of CFAs and the way they have worked in media cases, but very similar problems arise across the board and we are somewhat concerned that there may be a desire to go in for piecemeal reform in one area before Rupert Jackson has finished his inquiry so that we can see what the problem is and what the possible solutions are across the whole piece.

Q919 Mr Evans: The Committee has heard that some claimants, such as the supermodel Naomi Campbell, have used a CFA in order to sue media organisations, even though they could afford to do so themselves without one, so should means-testing be introduced?

Sir Rupert Jackson: The House of Lords considered this issue in the case of MGN v Campbell. The House of Lords came to the conclusion that the legislation passed by this House entitles anyone to make use of the CFA regime. The House of Lords also came to the conclusion that means-testing for the purpose of CFAs was not practicable. As the Master of the Rolls said, it is very important to look at the problems of costs holistically. There are serious issues concerning the costs of defamation proceedings and there are very serious issues concerning the costs of the whole of civil litigation, which is why the Master of the Rolls has taken me out of sitting for a year in order to address them, and I do endorse the point which Sir Anthony Clarke has made that we must deal with this problem in principle and across the board and, if I may respectfully suggest it to Members of this House, not embark on piecemeal reform for one tiny part of the civil litigation terrain which may perhaps have a slightly more vocal presentation than others.

Q920 Mr Evans: So you are not looking, at the moment, at the possibility of having legal aid for cases of defamation?

Sir Rupert Jackson: Well, legal aid has never been available for defamation, and one of the effects of the reforms introduced by Parliament in 1999 was that legal aid becomes available for an even narrower area of civil litigation. All the indications which I have received are that there is no realistic prospect of legal aid being expanded either to the boundaries which it occupied up to 1999 or, and more expensively, as Mr Evans posits, to include defamation as well. It seems to me that I have got to conduct my present review upon the assumption that legal aid is not going to be made more widely available and, given the present state of the economy, that is probably a safe assumption.

Sir Anthony Clarke: If I could just add a footnote to that in relation to your question, if there are problems with CFAs, they are the problems or the question of whether success fees should be recoverable from the defendant; it is not the CFA itself which is the problem. The problem arises when one asks whether it is just that a percentage of the success fee, which may be 100% of the base costs which include profit costs, should be recoverable from the defendants, and that is a problem which arises starkly in a case like the Campbell case which the House of Lords decided on.

Q921 Chairman: But you will appreciate that this Committee is essentially concentrating on libel and that is the topic of our inquiry, and I just wanted to clarify something. You are suggesting that, by looking at the broader range of all civil litigation, the problems which we have received evidence about in relation to libel cases are actually not, by any means, unique to libel cases, but they are problems that are now occurring right across the range of civil litigation?

Sir Rupert Jackson: Yes.

Q922 Chairman: Therefore, with the particular concern which we have, which is the potential 'chilling' effect on journalism, do you hear complaints that there are similar adverse consequences affecting other areas of law?

Sir Rupert Jackson: Yes. I shall make recommendations in my report later this year which, I hope, will address these problems both in relation to defamation or publication proceedings and also in relation to the entirety of civil litigation. Perhaps I may just say a word about the task which I am engaged in. I have been asked to review the rules and principles governing the costs of civil litigation and to make proposals to promote access to justice at proportionate costs. My terms of reference require me to look at the procedural rules where procedures might be changed to prevent such substantial costs being incurred, to compare our regime with regimes overseas, to review academic material, meet interest groups and so forth and to look at the whole of this area from first principles. I am conducting this inquiry in three stages. The first stage is to identify the facts, identify what costs are being incurred in different categories of litigation, identify the positions of different interest groups, review the literature and so forth and to look at overseas regimes. I have completed the first stage, as planned, in the first four months of this year and, Mr Chairman, I believe that you and your colleagues have received copies of my preliminary report. This is not a report which comes to conclusions, it is a report which sets out the evidence, the issues and the competing arguments. I am not a politician, I am a judge and I am conducting my inquiry, as best I can, in a judicial manner, which is, first, to identify the facts and the evidence and then I embark on a consultation period which begins this month. During the consultation period, I hear what everyone has to say about the matters raised in my preliminary report, I am holding public seminars, meetings with many interest groups and so forth, and then I shall make the final report with my recommendations in the autumn. It is very important that I keep an open mind both during phase one when collecting the evidence and during phase two when I hear the arguments, so I am not, Mr Chairman, going to propose any magic solutions today, but I can assure you that I am very much alive to the issues which concern all areas of litigation. In my preliminary report, I deal with the costs of defamation proceedings in chapter 37 and I have an appendix, which is appendix 17, which sets out the costs of claims resolved by settlement or judgment in defamation or publication claims against the media in 2008. This material was very kindly provided to me by the Media Lawyers' Association and I hope that the members of this Committee will find the data in appendix 17 to be helpful. You can see that conditional fee agreements were entered into in about 17% of the cases, you can see set out what the costs of each side were and what the damages are, and I have put some notes at the top of the schedule which explain the details of the figures, so I very much hope that this Committee will find appendix 17 helpful. If it would help the Committee to look at the problems of defamation costs in the wider context, you will be able to look at costs in other areas of litigation in the numerous other appendices to the report and I have set out the issues, as best I can, in the surrounding chapters, although chapter 37 is specifically focused on defamation.

Q923 Chairman: I note that, of the 154 cases in appendix 17, three went to trial.

Sir Rupert Jackson: Yes.

Q924 Chairman: And they were all won by the claimant.

Sir Rupert Jackson: Yes.

Q925 Chairman: One of the things which has been put to us in relation to CFAs is that, I think it was, 98% of the cases which were CFAs were won by the claimant and their solicitors who had the CFAs.

Sir Rupert Jackson: It appears, from the evidence which I have received, that claimants are successful in a very high percentage of defamation cases. The evidence which has been supplied to me does not enable me to give you a precise percentage; it is something I would have been delighted to receive, but none of the parties on either side of this particular divide has furnished me with evidence which enables me to confirm or contradict the 98%. I would be surprised if it is that high, but it is certainly a high percentage.

Q926 Janet Anderson: We have heard some evidence about the level of charges in cases involving CFAs. Do you think the level of charges in these cases is out of control?

Sir Rupert Jackson: Well, first of all, the hourly rate charged by solicitors can be challenged by the losing party on assessment and, if there is a detailed assessment, that will be dealt with by a costs judge in the Supreme Court Costs Office. I say that because the vast majority of defamation claims are tried in London and, therefore, it will be one of the costs judges here who deals with it. This Committee can have confidence in the judgment of the costs judges in dealing with hourly rates. There is a new committee set up, the Advisory Committee on Civil Costs, chaired by Professor Stephen Nickell, an economist at Oxford, who is currently looking into the guidelines rates and, no doubt, the results of his work will be of assistance to the costs judges who are doing detailed assessments. One firm of claimant solicitors has provided to me, in confidence, details of the hourly rates which they charge, and clearly I cannot furnish that information to the Committee as it is confidential, but the material supplied to me indicates hourly rates distinctly lower than figures which have been bandied around in some of the documents.

Sir Anthony Clarke: I agree with that. I still feel myself that the area of concern is the percentage success fee aspect of the CFAs; that is my impression really across the board. One of the things which is somewhat disappointing is that there is not, so far as I know, any research which anybody has conducted. The Government, for example, has never conducted any research, so far as I am aware, into the underlying question of whether it is necessary for solicitors to charge success fees and, if so, at what level. The justification of it is said to be that they need to do that in order, if you like, to pay for the cases that are lost. Well, one might think there would be a great deal to be said for some detailed research into the number of cases that are lost and the whole profile, but, as far as I know, and I am sure Rupert Jackson will tell me if this is wrong, no one has ever conducted any public research into that which, to my mind at least, is a great pity. That is right?

Sir Rupert Jackson: It is correct, yes.

Q927 Janet Anderson: Do you think that, if success fees and ATE insurance became irrecoverable, damages would have to increase to compensate for that?

Sir Anthony Clarke: Well, it is certainly something to be considered.

Sir Rupert Jackson: I am looking at the question of whether success fees and ATE premiums should be recoverable at all in any area of civil litigation, and that, for your reference, is discussed in chapter 47 of my preliminary report. If success fees and ATE premiums become irrecoverable, then one has to look at the position of claimants. So far as the ATE aspect is concerned, one issue which I must consider is whether there should be a restriction on the claimant's liability for costs because, if the claimant's liability for costs were substantially curtailed, the need for ATE insurance in respect of adverse costs would go, and I have done some calculations which are set out in the report which show that defendants would be significantly better off if there were one-way cost-shifting and they never got costs at all when they won, so that is one issue. So far as the success fee is concerned, if the success fee is irrecoverable, then it would have to come out of the damages. Now, the deductions from damages raise important policy issues which vary from one part of litigation to another. If you take defamation proceedings, the claimant's main concern is to have his or her reputation vindicated, and this Committee may think that it would be no great hardship to a claimant in defamation proceedings to lose a significant portion of his or her damages by way of deduction for the success fee because the claimant would still retain some damages and the claimant's reputation would have been vindicated. When one comes to the area of personal injuries, however, deductions from damages become much more problematic because, very often, a large part of the damages relates to future care, and I do not think anybody would want a deduction from that. I hope the Committee will forgive me if I say that the question of transferring the burden of the success fee from defendant to claimant is one which raises difficult issues in different parts of civil litigation, and these are issues with which I am grappling, but those issues are less worrying in defamation than in other areas. As to whether or not damages should go up, it seems to me that damages for defamation ought not to go up unless personal injury damages go up. The convention has now been established that defamation damages should be kept proportionate to personal injury damages because it is offensive that an individual should receive greater compensation for hurt to his reputation than for injury to his body. Now, there is a related question of whether personal injury damages should go up, as recommended by the Law Commission ten years ago, but not yet implemented, and there is a related question to that which is whether it might be affordable if the costs of personal litigation can be controlled or brought down. These are issues, all of which I am looking at, which are a long way from defamation, but, if I may respectfully say so, they illustrate the importance of looking at these costs issues holistically and not introducing urgent reform or immediate reform now when a comprehensive review is due later this year.

Q928 Philip Davies: On this, I was interested, Sir Anthony, in your point about the purpose of the success fee which is, in effect, to cover the costs of the ones that you lose. Now, I acknowledge that we have not got the exact figures, but, if the figures are anywhere near to the suggestion that 98% of these cases are being won by the claimant, would that indicate that success fees are not justified?

Sir Anthony Clarke: Well, it would certainly be a factor. I still think that more detailed research is required, but it would certainly be an indicator to that. The other thing to bear in mind, however, in relation to the notion that claimants always win is that one way a defendant can protect himself, whether a defamation or any other, is to make, what we call, a Part 36 offer to settle the proceedings so that, if the claimant does not beat the offer, then, from the moment of the offer, the claimant will be expected to pay the defendant's costs, which is quite an important factor, to my mind, in thinking about all this.

Q929 Philip Davies: Because it seems to me, from listening to what you have said, that success fees may be justified if lawyers were taking on fifty-fifty cases under CFAs, but I get the distinct impression from the evidence that we have heard throughout this inquiry that, in effect, lawyers are only taking on as CFAs those cases which they think are absolute racing certainties and they are, in effect, therefore, getting paid double for the simplest cases to prosecute, which, to a layman like me, seems like an absolute racket. Would you not accept that, if they are being used in the sense that they are only taking on the racing certainties under CFAs, these exorbitant success fees are just simply not justifiable in any shape or form?

Sir Anthony Clarke: On that hypothesis, I can see that there is something to be said for that. The question is whether the hypothesis is correct.

Sir Rupert Jackson: If I may just come in on that point, there is a clear body of evidence which suggests that, overall, success fees may be bringing too great a benefit to the claimant side, but one has to approach this evidence with caution because claimant solicitors have made the point to me that, when a single case is lost, the costs, if that action has gone all the way to trial, for example, may be enormous and they may need the success fees on a substantial number of won cases in order to cover all their outlay on the lost cases. Now, I do not know, without the detailed research which, sadly, does not exist, precisely how many won cases one needs in order to cover one substantial lost case, but I do not think one should adopt too simplistic an approach to this.

Q930 Philip Davies: Do you not acknowledge that it is quite easy to envisage that there is a good number in this firm of lawyers where they take on the easiest cases that they are certain to win under CFAs and then they get paid double for the easiest cases, which seems, to me, to be perverse as you should get paid double for the hardest cases, not the easiest cases?

Sir Rupert Jackson: Of course, the easiest cases are the ones that are likely to settle early and, with a staged success fee, it will be nothing like 100%. The most difficult cases are the ones which go further and which attract a success fee of 100%, and it must also be borne in mind that, for every case which claimant solicitors take on on conditional fee agreements, they will have spent time reviewing a significant number of other cases before deciding that it is not practicable to take them on on a conditional fee agreement because the merits are not strong enough. Therefore, the success fees in the won cases not only have to cover the costs of those relatively few cases which are lost, but also the costs of reviewing a large number of cases which are not taken on and giving advice to the litigants in those other cases. I am not here to make out a case either for claimant solicitors or for media defendants; the arguments on both sides have been presented to me and I have summarised them, as best I can, in the report. I am very much alive to the points which Mr Davies puts to me and these are matters which I shall be addressing, but, I am afraid, I am not prepared to come to a final conclusion of the kind which is being put to me just four and a half months into a 12-month inquiry; that is not how judges work, although it may -----

Philip Davies: You do not have to finish your sentence!

Q931 Paul Farrelly: We are going to come on to the issues of costs-capping in a moment, but may I ask a couple of questions about your very helpful table. First of all, it would be quite right to say, in terms of the current situation, that there is an economic incentive that might generally lead you to conclude that 'nearly always win, double the fee' might be the outcome of the current arrangements, that the economic incentives are there that might lead to that situation?

Sir Rupert Jackson: I am terribly sorry, but I am not sure I have understood your question. Are you saying that there is economic incentive to double the fee?

Q932 Paul Farrelly: You have said that you will not pronounce on the evidence at the moment because you said that is not what judges do, but economists look at incentives and the current situation with CFAs, from an incentive point of view, might reasonably lead you to conclude that the incentive is there which might lead to a situation where lawyers pick and choose and it really is almost the case that it is 'nearly always win, double the fee'.

Sir Rupert Jackson: Well, first of all, I agree that there is an economic incentive to pick cases which, the lawyers think, are going to win. If they proceed on any other basis, they would go out of business very quickly if they are dealing with cases on a conditional fee agreement. There is, of course, that incentive there and that incentive is very important for defendants because it means that unmeritorious and frivolous cases are less likely to be pursued. One of the strengths of the conditional fee agreement regime is that a filter is created which, generally, weeds out weak and frivolous cases and that, from an economist's point of view, is, no doubt, very important. Secondly, you say, the incentive is to double the fee in every case because of the 100% success fee. There, I would question what you say because the success fee only goes up to 100%, to double the fee, in those cases which proceed some distance. In the strong cases which are resolved quickly, there may be no success fee or a low-staged success fee.

Q933 Paul Farrelly: The caveat then to your argument with respect to claimants, clearly, is one of motivation, this kind of chilling effect. If the claimant's motivation is not pecuniary, the argument that you have advanced, that the situation helps to protect the defendant, would be false, would you not agree?

Sir Rupert Jackson: Well, one has got to look at two different parties within the claimant camp; there is the claimant and there are the claimant solicitors. The claimant's concern, clearly, is to vindicate his reputation and to recover a sum by way of damages. The concern of the claimant solicitors is to avoid conducting cases which will be lost and then they will have to bear the costs themselves.

Q934 Paul Farrelly: Can I come to your table, which is very, very helpful to the Committee. I just wondered whether you had any similar data, which will mean a lot more work, from previous years so that we can establish whether there is any trend.

Sir Rupert Jackson: No, I am afraid I do not have data from previous years. Obviously, it would be helpful if I did have. This report has been prepared in the space of four months and defamation litigation is actually a very small part of the total subject and there are a huge number of appendices dealing with costs in all sorts of areas. I took the view that the contemporaneous evidence is the most helpful, and my appendices give a snapshot of costs being incurred at about the present time.

Q935 Paul Farrelly: One of the allegations that has been really made most strongly by the media is that there are two particular firms, Carter-Ruck and Schillings, who are serial offenders, in their terms, to the extent that they now tout for business, encouraging people to bring claims, particularly where the Internet is concerned, and there is a need for a modification here. Would it be possible for you to break down just by number of cases, not by sums or anything that could be held to be commercially confidential, the cases where particular firms acted for claimants and the number of cases where firms acted for defendants, just to break it down by legal firm for us?

Sir Rupert Jackson: I cannot tell you which solicitors firms acted either for the claimant or for the defendant in any individual case in this schedule.

Q936 Paul Farrelly: You do not have that information?

Sir Rupert Jackson: I do not have that information.

Q937 Paul Farrelly: The third question it would be very helpful if you could answer is: could you break down these cases, not in terms of identity, but by number, where it is foreign nationals who are the claimants or UK nationals? That would be helpful to the Committee when it comes to the issue of forum-shopping.

Sir Rupert Jackson: No, I am afraid I do not have that data.

Q938 Chairman: Can I just put one other point to you, which is looking at the economic incentives. One other claim which was put to us by the Media Lawyers' Association was that one of the consequences is that the solicitors for the claimant will deliberately prolong proceedings as much as possible in order that they run up obviously as large a bill as possible. Have you ever had any evidence of that or seen that happen?

Sir Rupert Jackson: I have not seen any evidence which demonstrates to me that claimant solicitors are deliberately prolonging proceedings in order to inflate costs. One feature of defamation proceedings is that there is a tendency for pleadings to become somewhat more complex than in some areas and for technical points to be taken more often. I am not a libel specialist, let me say, but my impression is that there are more interim applications of a technical nature in libel proceedings than elsewhere in civil litigation, but maybe the Master of the Rolls would care to add to that.

Sir Anthony Clarke: Well, traditionally, that was certainly the case and libel proceedings generally had a very bad reputation for giving rise to all kinds of, what I call, the very worst evil we have to deal with, namely satellite litigation where money is spent on satellite issues which are not really about resolving the merits of the case, and endless technical points, historically, were made in defamation-type cases. My impression is, and I am not a libel lawyer either, although I do sometimes hear appeals in defamation of privacy cases, but my impression is that, since the advent of the Woolf reforms ten years or so ago, that evil has significantly improved and it is certainly something which judges should, and I think probably do, look out for because it is obviously very, very unsatisfactory for any party of any litigation deliberately to string it out in order to make money.

Q939 Chairman: It was an allegation made directly to us by the Media Lawyers' Association that it happened on a regular basis. I merely leave it at that.

Sir Anthony Clarke: Well, I do not know whether the claimant lawyers accepted that and perhaps they did not.

Q940 Mr Hall: Could I explore with you the issue of costs-capping. The rules were changed in April of this year, yet the judiciary seem to have taken a very cautious approach to this particular attempt to control the costs that a successful person in the case can claim against the losing person in the case. Why has there been a cautious approach to this particular change in the rules?

Sir Anthony Clarke: Well, I think Rupert Jackson again is the man to ask because he chaired a working group on the Civil Procedure Rule Committee on this very question.

Sir Rupert Jackson: Well, I am not sure one can say whether or not a cautious approach has been taken to costs-capping by the judiciary since the new rules came into force because, as Mr Hall rightly points out, the new rules only came into force in April and I doubt, well, there may have been some applications since then, but four weeks is a very short time. Before April of this year, there were no rules governing costs-capping. When costs-capping orders were made by the courts, although there were no specific rules, they were using the general case management powers given to the court by Part 3 of the Civil Procedure Rules, and it is quite right that, over the years, the courts have been very cautious in the exercise of the costs-capping ability under Part 3. The reason is that the costs-capping process is extremely expensive. There is an application with supporting evidence, evidence put in in reply, then there is a hearing, possibly an adjournment for further material and then possibly another hearing, and then the assumptions upon which the costs cap has been set may be invalidated because litigation may take an unexpected course and then there could be an application to vary the cap. Costs-capping, which is sometimes seen as a panacea for the problems of excessive costs in litigation, can generate its own problems; it can give rise to satellite litigation and yet further costs, and there is a danger that, if costs-capping is undertaken too freely, it will end up actually increasing the costs of litigation rather than reducing the costs. The risks may be particularly high in relation to defamation because, as Mr Justice Eady pointed out in the Tierney case, defamation cases, perhaps more than other civil litigation cases, have a habit of taking unexpected and unforeseen turns. Therefore, the courts have generally adopted a fairly cautious approach to costs-capping, and one of the issues which I addressed in my report is whether a more expansive approach, or a different approach, should be adopted to costs-capping, and you will find this addressed in chapter 45 of my report. It is one of the serious issues in this inquiry. Last year, when the Rule Committee was looking at this matter, the Committee essentially codified the existing approach of the courts, and the reason that the Rule Committee adopted that cautious approach was that the present fundamental review of civil litigation costs was about to get under way and it was thought inappropriate to make any substantial changes to the costs regime before the present review had been completed.

Sir Anthony Clarke: If I could just add a postscript to that, as I am sure you all know, at the end of litigation, if there is a dispute about the amount of costs, then there may be a detailed assessment. Now, the cost of a detailed assessment can itself be very great. If you then focus on the costs-capping process, that itself involves identifying what the costs are likely to be and one way of doing that is to conduct something close to a detailed assessment in advance. Now, if you do that, you are then spending a lot of money assessing costs which have not yet been incurred in circumstances where (a) everybody knows that 95% or more of the cases are going to settle, so there will never be a judgment, and (b) even where there is a judgment, the vast majority of costs issues are resolved as well, so there will never be a detailed assessment, but, if you are going to have a costs-capping exercise in every case, it has to be very carefully monitored. You would have to have, to my mind at least, a very robust approach so that you did not spend too much money on assessing the costs in advance because that would be another example of the kind of satellite litigation which one is trying to avoid, and that is really quite a serious problem and it is not easy to have a robust system. It is all very well for the judge to say, "Right, what shall we say - 10,000", it is very difficult and the more robust, the more you look at the ceiling and hope for inspiration, the more you adopt that approach, the more likely it is that later one side or the other will say that the costs cap is inappropriate and then there will be endless arguments about whether it is appropriate to reopen the costs cap, so it is not easy. It sounds easy, but it is not easy.

Q941 Mr Hall: Thank you for that, and both of you have anticipated the next question as to why these costs caps are not more regularly used. If I have understood what you are saying, you are basically saying that, on face value, costs-capping is a good idea, but the mechanism for doing it actually adds costs to the case.

Sir Anthony Clarke: Well, there is a real worry about that certainly. In the future, though, I think we are thinking of better ways and maybe, when we have seen Rupert's report at the end of the process, we will be able to move forward or some sensible way forward will be found. Finally, the Rule Committee in fact refused to introduce a specific costs-capping rule in defamation cases for the reasons we have given, on the footing that it would be better not to do it just for defamation, but to consider the whole matter in the round when we have the whole picture.

Sir Rupert Jackson: If I may add one additional point to this, although costs-capping has the difficulties mentioned by the Master of the Rolls, I am looking at another approach to this problem, which will be a form of costs management by reference to budgets on each side of the case. This is just one of the many matters I am looking at, and it would entail that the solicitors on each side provide their budgets to the court with more detail than the rules currently require and the court manages the case by reference to the budgets on both sides, if and insofar as those budgets are reasonable. Now, this is one of many matters I am looking at, it is discussed in chapter 48 of the report and, since that chapter was written, I have had some intensive meetings developing the proposals in that chapter. Whether this will be a feasible way forward or not, I do not know at the moment, but it may be another approach to achieve what is sought by costs-capping which generates the difficulties mentioned.

Q942 Mr Hall: Is it right to say that, in some cases, you can cap the costs of just one side of the argument, for example, the claimant? Is that correct?

Sir Rupert Jackson: You could cap the costs of one side, but it would be more fair, or it is more likely that the judge, in his discretion, would cap the costs of both sides.

Q943 Mr Hall: On a slightly different note, where we have got cases for defamation or privacy that involve media organisations, what is your view about placing caps on those costs so that we do not have the chilling effect where we see people refusing to publish stories or they end up in fear of litigation?

Sir Rupert Jackson: Well, I think that costs caps in defamation proceedings give rise to the same difficulties as they give rise to in other forms of litigation. The danger of costs-capping in defamation proceedings is that you may end up increasing the costs rather than reducing them. There are times when costs-capping is appropriate and the Civil Procedure Rules, as amended last month, provide for costs-capping in appropriate cases, both for defamation and all other areas of litigation.

Q944 Paul Farrelly: I want to come on to issues of jurisdiction and forum-shopping in a moment, but your answer there regarding the examination of budgets begs the often-asked question of whether claimants should be subject to means-testing.

Sir Rupert Jackson: I myself see considerable difficulty in devising a set of rules, the effect of which would be that only persons who satisfy a particular means test are entitled to instruct their solicitors and counsel on a conditional fee agreement, and I see very considerable force in the reasoning of the House of Lords. Whilst I am conscious of the problems which conditional fee agreements with recoverable success fees and recoverable ATE premiums generate, I am at the moment very doubtful that means-testing would be the way to crack the problem; I think that I have got to look for other solutions.

Q945 Paul Farrelly: I am sorry if you have addressed that already, but I missed it. One alternative approach, which has been suggested by editors of certain newspapers, newspapers which are not involved in cheque-book journalism, shall we say, is that an early judgment on the meaning would be very helpful in defraying costs.

Sir Anthony Clarke: Well, the courts have powers to take individual issues and to decide them separately from the other issues and, as far as I am aware, it is not uncommon to have a preliminary issue on the question of meaning, and indeed I myself was involved, I seem to remember, in an appeal in relation to meaning where the only question was whether the meaning, which the claimant said the words had, was a meaning which was open to that, so yes. It is an important feature of all kinds of litigation, namely to try and identify key issues which can be decided shortly and comparatively cheaply which will then, hopefully, lead on to a settlement of the whole dispute, so the answer is yes.

Q946 Paul Farrelly: Is there anything, in your opinion, that could be done to facilitate that?

Sir Anthony Clarke: Well, I think the rules sufficiently facilitate it already. If a defendant, for example, says that the meaning suggested by the claimant is a meaning that the words complained of could not have, then there is nothing to stop that defendant going to the court and asking the court to direct that that issue be decided as a preliminary question, and these days, I would have thought, judges would be keen to do that.

Q947 Paul Farrelly: Is that normally then subject to appeal and then it potentially runs the risk of costs running away?

Sir Anthony Clarke: Well, there is, of course, a risk of that, but, if the resolution of that question is going to lead to the settlement of the whole dispute and, in effect, cut out any further dispute or costs, then it is desirable.

Q948 Paul Farrelly: Is it used often enough? Do judges ----

Sir Anthony Clarke: Well, I would have thought they did. I cannot say that I have in front of me the statistics in relation to how often that happens in defamation cases, but it certainly does happen, I know that, and I can see no reason why a defendant should not apply for such an order; it seems very sensible in all sorts of cases.

Q949 Paul Farrelly: I want to move on to jurisdiction. The issue of jurisdiction now has become very noteworthy in some cases, but it is also more relevant because of the march of the Internet. Is it time that our libel laws moved with the times and that we institute the single publication rule, as they have in the United States?

Sir Anthony Clarke: Well, I do not really think that is something for me to comment upon; that is a matter of principal policy, if you like, and it is a matter for Parliament, but it does not seem to me that, as a judge, it is appropriate for me to comment upon. I might have a personal opinion as to what the answer to that should be, but, wearing my present hat, it seems that it is a matter for you, if I may say so, rather than me.

Q950 Paul Farrelly: But we take advice from eminent and experienced people like yourselves on these questions.

Sir Anthony Clarke: I can quite see that there are arguments in favour of it which have been put very forcefully to you, and then there are arguments on the other side which have been developed in some of the cases. After all, you do not have to leave your material on the Internet and, as some judges have said in the past, "Well, if you do that, you've only got yourself to blame because you could remove it or qualify it and, if you choose not to, it may be that you do it because you like", as one judge said, "the ubiquity of the Internet", so there are two sides to the question and I think that a quite significant case could be made for either view.

Q951 Paul Farrelly: That is clearly one issue as to whether someone does not have the commonsense to take something down, once notified, but, if it has been there for ten or 15 years, it is still actionable, so, in those sorts of instances, as a judge, which of the arguments, for or against single publication, do you find most persuasive?

Sir Anthony Clarke: Well, I do not think I am going to answer that!

Q952 Paul Farrelly: I can see that I am not going to get any further with this! Clearly, it is a matter of great concern to the likes of The Wall Street Journal, Private Eye and some of our major newspapers, but how often do issues of jurisdiction arise in libel cases, in your experience?

Sir Anthony Clarke: Certainly from time to time, but certainly no more than in many other areas. I spent my whole career really, before I went on to the Bench, dealing with commercial litigation where a good proportion of my practice was arguing about whether or not the particular dispute should be heard in England or in Timbuktu or wherever, so I certainly do not think it is, in the great scheme of things, particularly significant, although I can see that it does cause concern, but the principles are reasonably clear, I think, at present. To my mind, I would have thought they worked perfectly well, but I can see that there is a concern about forum-shopping.

Q953 Paul Farrelly: It comes back to the question that it would be useful to have some data to get this whole issue in perspective. Is there any data at all which we can draw on?

Sir Anthony Clarke: I do not know. It is possible that HMCS, the Court Service, might have data about that. I quite agree, it would be helpful to have data. I personally do not have it, but it may be that the Court Service would.

Q954 Paul Farrelly: Perhaps we can follow that up and, likewise, data such as how many claims for, if you will excuse my Latin, forum non conveniens there have been and how many have been successful, that is data which would be useful.

Sir Anthony Clarke: That is really the same point. I would have thought that the people to go to, as it were, would be the Court Service on that.

Q955 Paul Farrelly: We have met with legislators in the United States who have been bringing, or attempting to bring, in the laws both in New York and federally, and one of the concerns is whether the UK courts have become an object of ridicule for admitting the sorts of claims that we have seen where Ukrainians are sued because the left side happens to be accessible here. Is there any threshold at all that you can give us some guidance on as to how the courts approach it or whether our courts are the appropriate jurisdiction?

Sir Anthony Clarke: Well, the general principle, I think, is this: that, if you have a case where you can find the defendant within the jurisdiction so that you can serve the proceedings on the defendant as of rights within the jurisdiction, then, on the face of it, you are entitled to proceed with your action, unless the defendant persuades the court that the action should be stayed on the grounds of, what I think is usually called, 'forum non conveniens' where you have to persuade the court that the interests of justice make it more just that the case be tried somewhere else, and, as I say, I have spent many happy hours over the years arguing about just that on one side or the other. The case is a bit different where you cannot find the defendant within the jurisdiction because then you need the permission of the court to serve the proceedings on the defendant outside the jurisdiction, and then the onus of proof is on the claimant to satisfy the English court that the English court is the appropriate place to make the action. Of course, it could only do it, in any event, if the tort, in this case the libel, was committed within the jurisdiction, so there would have to be publication within the jurisdiction so that it could be said that the tort was committed within the jurisdiction. I think the approach, or my impression, though I cannot say I am an expert in this, is that, if there has been a significant publication within the jurisdiction, then, in the first class of case anyway, the courts have ordinarily taken the view that, if they have found the defendant here, he ought to be entitled to claim about an unlawful publication here, but, if it is a very insignificant part of a worldwide publication, then the courts will say, "No, this case ought to be tried elsewhere". The only thing is, of course, that the law may be different here, so, for example, the law of the burden of proof may be different in relation to justification. The burden is on the defendant, I think, to justify an alleged libel here, whereas the burden may be the other side in some other way in some other jurisdictions, and I am not talking about the European Union where of course there are strict rules about jurisdiction.

Q956 Paul Farrelly: Well, that is the nub of the issue, and the two words, "significant" and "insignificant" are also the nub.

Sir Anthony Clarke: Well, these are questions of judgment really and they depend upon the facts of a particular case, which is what judges are for.

Q957 Paul Farrelly: If I just take one particular case, the case which ultimately came before Mr Justice Eady, or two cases, John Alexis Mardas v The New York Times and the same claim against The International Herald Tribune, the High Court struck those claims out on 10 June last year. The claimant had permission to appeal in August and then Mr Justice Eady upheld that appeal in December 2008 which led, in January this year, to a large Private Eye article, entitled, "English law is 'Carter-Rucked'". I do not know whether you are familiar with Mr Justice Eady's judgment in that case.

Sir Anthony Clarke: I have read it, but I do not think it would be at all appropriate for me to comment upon the facts of a particular case. After all, there might be an appeal and it might come to us judicially.

Q958 Paul Farrelly: It would appear though from this case, from Mr Justice Eady's comments, that there cannot be any threshold, given the law as it stands. He says, "This cannot depend on a numbers game".

Sir Anthony Clarke: Well, obviously, one would have to look in detail at his reasoning to see if it was sound, but the losing party could, presumably, attempt to appeal, if they were disappointed.

Q959 Paul Farrelly: Would statutory guidance, and in what form, be helpful?

Sir Anthony Clarke: It would have to be extremely carefully thought out, the statutory guidance. I think one would have to look at the guidance to decide whether it was helpful or not.

Q960 Paul Farrelly: The American publishers have put a collective submission in to us where they suggest certain thresholds. I do not know whether you have had a chance to see that submission.

Sir Anthony Clarke: I am afraid, I have not, no.

Q961 Paul Farrelly: If you do get the opportunity to look at it, it is the final paragraph, 18, where they suggest, what seem to be, some sensible thresholds, and it would be very interesting to have some evidence as to whether there might be unforeseen consequences or, indeed, whether those thresholds were sensible, if you could address that without reference to any particular case that has been going on.

Sir Anthony Clarke: I will certainly look at them and see if it is appropriate to make any comments and, if it is, I will.

Q962 Paul Farrelly: Finally, the American publishers, you may think, scurrilously or not, make the following observation about the English libel industry: that it is unusual, its costs, by far, are the highest in Europe and there are only two main libel chambers in which the practitioners and judges are drawn. That begs the whole question of whether to have specialist judges or not and what is better, but they imply that it is pretty much a racket on a very closed circuit.

Sir Anthony Clarke: Well, I certainly would not accept that. I have not seen the evidence. I can see that they may have an axe to grind, the writers of that piece, but there are many specialist areas of the law where there are only limited numbers of chambers because, if you are operating in a specialist area, obviously, what the market wants is specialist advocates and, just as they want specialist solicitors, they want specialist barristers and there are, inevitably, likely to be a small number of chambers. Equally, it has been found over the years to be desirable to have specialist judges and it is not all that satisfactory to have judges who do not know anything about the area that you are in. I myself spent many years doing maritime work and there are specialist judges and, to my mind, if you had to choose between specialist judges and generalists who know nothing about it, I would go for the former.

Q963 Rosemary McKenna: In 2005, the judiciary set up a panel of media-trained judges to try and improve the media understanding and public understanding of the judiciary and judgments. How would you assess the success of the media panel?

Sir Anthony Clarke: I think, first of all, it is important to appreciate what the media panel does and what it does not do. It is not really a panel, as such, but it is a number of judges who have been trained to, if you like, cope with the media since it is not always terribly easy without any training, as perhaps we all know. However, what the judges cannot really do is comment upon the facts of particular cases, and I think that has been accepted widely by the media. Obviously, we have the Judicial Communications Office now so that, if there is a piece in the newspaper which is simply hopelessly inaccurate, which does sometimes happen, as we all know, then the Judicial Communications Office is able to correct matters like that, but the media panel activity has been to discuss more general problems, and I have a list of the sorts of topics which have been discussed in recent times, for example, problems relating to litigants in person because we have, perhaps in these days when there is less and less public money to assist litigants, more and more litigants in person and they do, undoubtedly, provide their problems, and how to cope with them is an important factor. Then there have been panels about witness intermediary schemes and witness protection schemes, there have been discussions on bail, then why juries are dismissed, and there has even been one on the day in the life of a judge, though I do not know who would be interested in that, but there we are! Then, there have been panels on, for example, the role of summing-up proceedings, how the county courts deal with repossessions more recently, the process of small claims and, more recently, transparency in the family courts, which has been a big issue, so those sorts of topics.

Q964 Rosemary McKenna: I noticed, from the list that you have supplied to us, that most of it would seem to be not the print media, but television and radio, certainly in 2008 and 2009. Is there an attempt to improve the reporting of cases in the print media or the judgments in the print media of the judiciary, for example, the judgment that Mr Justice Eady was 'creating' a privacy law by the back door, which was widely reported?

Sir Anthony Clarke: Well, one thing we have tried to do, again through the Judicial Communications Office, is we have tried to make courts' judgments more readily available and more immediately available to the media so that the media have the actual judgments delivered because many of these judgments are handed down in a written form and sometimes we have summaries, and we are having summaries more often now, and even press notices to make sure that the information which the media actually have in their hands is accurate because I think many of us over the years have had quite a bit of experience of inaccurate reporting of cases we have been involved in one way or another. It is obviously desirable and it is quite important for us to make sure that our judgments are accurately reported, and all the business about whether Mr Justice Eady created a privacy law all by himself would not perhaps have had the publicity it had if people had actually read a lot of these judgments because it is simply not the case.

Q965 Alan Keen: We have obviously had extensive submissions, but the joy of having you actually with us today is that I wonder if you could talk us through the tension between Article 8 and Article 10 because that would be very helpful.

Sir Anthony Clarke: Well, the reason, for example, I said just a moment ago that Mr Justice Eady did not invent the privacy law was that there had been much debate over many years about whether the common law should develop a privacy law, and the common law never did, although it did gradually develop the law of confidence into something pretty close to a privacy law, and we could argue about whether it really is a privacy law or whether it is like a privacy law, but not really a privacy law, and the like. It was gradually developing, but the whole area was radically altered with the advent of the Human Rights Act which, of course, incorporated the European Convention on Human Rights into our law. Before that, although we were signatories, and had been from the beginning, to the Convention, the United Kingdom that is, so, therefore, it had signed up to Article 8 on the one hand and Article 10 on the other, it was not until the Human Rights Act was passed that it became actually part of our law. From that moment onwards, it was the court's duty, and the role of the judge, to balance the rights in Article 8, respect for privacy, and the rights in Article 10, freedom of expression. As we know, in each of those articles it has, in paragraph 2, a sort of balancing provision, so, for example, in Article 10, freedom of expression, but having regard to the rights of others and the like, and one of those rights is the right to privacy, and there has been a lot of jurisprudence now about how to balance the two rights. For example, it has been authoritatively held, I think, by the House of Lords that one does not trump the other, they have got to be balanced, and it is really a matter for the judge in the particular case to carry out the balance. I think, for that simple reason, that it is quite wrong to say that any particular judge has invented the privacy law because actually it derives from the Convention which was enacted by Parliament in the Human Rights Act. Of course, if Parliament wanted to change the law, it could, presumably, in theory at least, do so, though of course the United Kingdom remains a party to the Convention and it would be a very large step perhaps for the United Kingdom to withdraw from the Convention, if indeed it were possible. The way it has actually worked is that there have now been quite a large number of cases, some have been before Mr Justice Eady and many before other judges, quite a lot of the cases have gone to the Court of Appeal and quite a lot of the cases have then gone to the House of Lords, and, of course, Strasbourg has had its twopennyworth as well, and Princess Caroline, in the Von Hannover case, played a very big part in the development of the Article 8 aspect of it, but it recognises that there is this balance to be struck and the balance has to be struck on the facts of each particular case. There is really nobody else who can do the balance, but the judge in a particular case, and he or she has to apply the principles which have been adopted and laid down, first of all, by the Court of Appeal and then by the House of Lords where all of us have to have regard to the Strasbourg jurisprudence under section 3, I think it is, of the Human Rights Act, so that is how it has developed on a case-by-case basis.

Q966 Alan Keen: Do you have anything to add, Sir Rupert?

Sir Rupert Jackson: Nothing. I agree with all the Master of the Rolls has said.

Q967 Chairman: You are saying that obviously it has to reflect the will of Parliament, and one thing Parliament did do was insert Article 12 of the Human Rights Act, which was widely interpreted as saying to the courts that there should be greater weight to freedom of expression against privacy, yet it appears that the courts are doing precisely the reverse.

Sir Anthony Clarke: This is section 12 of the Human Rights Act. Is that not about interlocutory injunctions? Would you just tell me what it says?

Q968 Chairman: It says: "The court must have particular regard to the importance of the Convention right to freedom of expression ..." Essentially, as I understand it, it is Parliament's intention that, in striking this balance, freedom of expression would be given greater weight.

Sir Anthony Clarke: Section 12 is about the grant of interlocutory injunction, is it not? "(1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression." This section is about the case where an application is made to the court for an injunction to restrain publication by a newspaper. Then: "(2) If the person against whom the application for relief is made ('the respondent') is neither present nor represented ..." That is a further provision in relation to the protection of the press. Then the point you mentioned: "No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed." That is a much tougher test for an injunction than it is in relation to every other injunction in every other walk of life. In every other walk of life, all you have to do is to set out your case; you have to say that there is a serious question for the court to try - which is quite a low test. As long as you have some kind of realistic case, a case which is not fanciful, then you satisfy the merits test in the ordinary everyday case; for example, if you want to stop your neighbour doing something. Here, the test you have to establish is that the claimant is "likely to establish that publication should not be allowed". In fact, the House of Lords in a case called Cream has considered what that means. I would recommend anybody who is interested in section 12 to read the House of Lords decision and reasoning in the case of Cream because it does set out in very considerable detail the approach which the House of Lords decided the courts should adopt. If you are thinking about this, I would recommend that you do look carefully at the reasoning in Cream because any new law would have to grapple with that. It is a somewhat nuanced approach but, essentially, the provision is as stated in this statute; namely, that you have to show that it is likely (in the sense of "more likely than not") that you will win at the trial. That is quite a tough test. As compared with other areas of our life, it does give the defendant - the media, if you like - quite a bit of protection. It always has, historically, been very difficult, if not impossible, to obtain an injunction, for example, to restrain the publication of something which is said to be defamatory. If the defendant has indicated that they may wish to justify the allegation, then the general rule is that no injunction will be granted, because it is recognised that freedom of expression is a very important right - as you say, recognised by article 10. I suggest to you that section 12 is not about the balance between article 8 and article 10. There, when you ultimately come to look at it, it is a balance where you have to take account of both. I see in a case decided only yesterday or the day before in this area that Strasbourg stressed the importance of article 10.

Q969 Chairman: I am conscious that the Lord Chancellor is waiting. I do not want to delay him for too long.

Sir Anthony Clarke: We certainly would not want to keep the Lord Chancellor waiting.

Q970 Chairman: One of the points made to us by the media is that judges who have an application for an injunction which they receive on a Saturday evening are more likely to grant it on the basis that there is plenty of time: "We can come back to it, perhaps next week, and look again," whereas not granting it cannot be reversed. The media, therefore, think that they are biased in terms of granting injunctions in favour of them being given. You are saying that section 12 should operate in precisely the other way.

Sir Anthony Clarke: Section 12 should operate to give judges great cause for concern before granting it, even late at night on a Saturday night. It is quite true that, across the board, generally, for those of us who have been on duty late at night on a Saturday night when you have been given some terrible story, in most cases the sensible thing to do is to grant the injunction, to hold the ring until Monday, because, mostly, the balance of convenience or the balance of justice is to say, "Let's decide that now, and then the thing can be thought out and decided on a Monday." This shows that the courts are very reluctant to do that, because sub-section (3) applies in the case you mentioned, and in subsection (2), when an application is made ex parte (as it used to be called) ".... no such relief shall be granted unless the court is satisfied (a) that the applicant has taken all practicable steps to notify the respondent; or (b) that there are compelling reasons why the respondent should not be notified." You need a very, very good reason indeed before you can persuade a judge who is applying the thing properly to grant you an injunction in the circumstances you mention.

Q971 Paul Farrelly: We have jumped from media panel to the balance between privacy and freedom of information, and that was the subject covered in Paul Dacre's speech.

Sir Anthony Clarke: Yes.

Q972 Paul Farrelly: Which was an attack on Mr Justice Eady, and your submission is a very cogently argued defence of the judgments that he has made. Mr Justice Eady himself made a speech in the House of Lords two or three months ago.

Sir Anthony Clarke: In the House of Lords?

Q973 Paul Farrelly: It was the Intellectual Property Lawyers' Association. It was under Chatham House Rules, but the Sunday Times got wind of this. The reporter Stephen Robinson asked Mr Justice Eady for a copy of his speech, and Mr Justice Eady gave him a copy of his speech, and he quoted a little bit from it in a Sunday Times magazine article. We have not had Mr Justice Eady here. I think we have asked his chambers for the speech but I do not know what the response is. I wonder whether you might prevail in your usual way so that we can have a copy of his comments.

Sir Anthony Clarke: It is really a matter for Mr Justice Eady whether he wishes to comment. Indeed, it is a matter for him whether it would be appropriate for him to do so. I will certainly inform him of what you have said.

Q974 Paul Farrelly: It has been given to a journalist.

Sir Anthony Clarke: If he has already given it to somebody else, it may be that he would be quite willing to make it available to the Committee. We will undertake to ask him.

Paul Farrelly: Thank you.

Chairman: Could I thank the two of you very much indeed.

Witness: Rt Hon Jack Straw MP, Secretary of State for Justice and Lord Chancellor, gave evidence.


Chairman: Good morning. For the second part of this morning's session, I would like to welcome the Lord Chancellor and Secretary of State for Justice, Jack Straw. I will invite Philip Davies to begin.

Q975 Philip Davies: Perhaps we could start where we left off with our eminent judges, with the Human Rights Act. Could you give us your thoughts on the balance between articles 8 and 10? If not a contradiction, there certainly seems to be a great tension between the two.

Mr Straw: Essentially it is as the Master of the Rolls has described - and he is much more of an expert on how these articles, alongside English common law, have been interpreted over the years. As he was describing, the Convention (and therefore the Act) requires that there is a balance here to be struck between freedom of expression and a right to privacy under articles 8 and 10 respectively. That is a very wide discretion given to the courts. The interesting thing about the Human Rights Act which I think it is always worth bearing in mind is that, although it was not incorporated into British law until the year 2000, 49 years after the Convention came into force, the rights that are written down in the key Convention articles are essentially British rights. This was drafted by British jurists, not least Sir David Maxwell Fyfe (as he then was), who later became Lord Kilmuir, the Lord Chancellor in the 1950s, and they were trying to set in a code what was understood to be the basic civil and human rights which we had taken for granted in the United Kingdom for many centuries - for sure here we have taken for granted, and the courts have then given some articulation to the idea both of a right to privacy and to freedom of expression. Then, as the Master of the Rolls has described - and he has set out quite a number of the leading cases on this, including the Naomi Campbell case - there was already developing jurisprudence in respect of the law of confidence, which, crab-like, as the Master of the Rolls was indicating, was developing something along the lines of a law of privacy, and then we got the Human Rights Act, which certainly moved it up a gear. If your next question is, "Do you think there should be statutory changes made?" the answer is that I want to wait to see what your Committee has to say on it. I am not, Chairman, trying to dodge this, but I was thinking about this overnight, and there are some areas where, for sure, it is sensible for Parliament to intervene rather quickly. If you take, for example, the area of the law of negligence, although there are occasional interventions, not least over procedural issues (limitation periods and things like that), the law has developed in a flexible and sensitive way because it has been developed on some very clear principles which have then been interpreted in particular cases. That is my starting point, but obviously I want to see what your report says.

Q976 Philip Davies: Surely the starting point here - which is what I am trying to get to - is this: when you introduced the Human Rights Act into British law, in terms of the judgments that have been made, have they panned out as the Government intended or have there been some unintended consequences?

Mr Straw: I am not being forensic about this, but my judgment is, in general, if we went back to what we said and what Parliament said in the 1990s, the interpretation of it has worked out as was thought, and in some areas, it has worked out in a different way. It is impossible in any circumstances to take account of an environment which is going to occur in the future. One of the things which I certainly did not anticipate - which has not affected this area but it has certainly affected the overall environment of the Human Rights Act and its application - has been the fact that 11 months after the Human Rights Act came into force, which was on 2 October 2000, we had 9/11. That meant that we then ended up by fighting two wars and having to introduce a raft of counter-terrorist legislation which tested those articles in a way in which it would have been better, if it had been possible, for them not to have been tested until they had bedded down. That is one example. Perhaps I might add this: it is certainly the case - and I know that Mr Dacre, when he came before your Committee, Chairman, was indicating this - that the newspaper editors and the journalist organisations were concerned about how article 8 would be interpreted. They were particularly concerned about interlocutory injunctions, stopping the presses. That is why I negotiated the terms of what became section 12 with them. Although, for sure, they have complaints about the level of fees and costs - which I fully understand and in many respects share - and they have concerns about particular decisions in the courts, not least in the Mosley case, section 12, as the Master of the Rolls has spelt out, has worked to their advantage without any question.

Q977 Philip Davies: I think you said in your first answer that the Human Rights Act has given a wide scope to judges. Surely over the last couple of weeks we have seen the importance of having a free press and media to expose wrongdoing in authority. Would you not agree that the time has come for Parliament itself to clarify the importance that it places on freedom of speech? I personally would like to see a greater strengthening of the right of the press to be freer in what it publishes, but whatever side of the argument one takes on that, surely it is time for Parliament to decide which should have priority, freedom of speech or privacy, and set it out clearly, rather than leaving it to judges to interpret the law. Would that not be more sensible?

Mr Straw: I do not rule out the idea of legislation on this; I just say that it is very complicated. My experience of decisions in respect of human rights over the years is that some of those which caused the greatest initial excitement have ended in a situation where, because of changed circumstances or appeals to the Court of Appeal or the Law Lords, things have calmed down, because those senior courts have produced a better balance. Since I am a respondent to a large number of cases any day in the courts on human rights bases and others, I can think of a number of cases in my area. So I do not rule it out, but where you are seeking to balance privacy and the right of expression, in the end, if those rights are justiceable, you are going to have to give that balance to a court. After all, yes, we have seen in the last two weeks the value of a free and independent press. I do not think there is anybody in this place who has challenged that, or very few - I mean, there was an argument beforehand, but that has not been challenged - so quite how a law would have helped there I am not sure. In every jurisdiction I can think of which seeks to provide justice, you have, by one means or another, a right of privacy and a freedom to express yourself as you wish, and a recognition too that those are potentially, sometimes, in practice in conflict and therefore it means resolving those conflicts.

Q978 Philip Davies: I am somewhat encouraged that you are considering some kind of legislation to clarify the position one way or the other - you certainly have not ruled it out - but we have had so much case law now that it is becoming increasingly clear where we are. What would have to happen for you to decide either, yes, we definitely will or, no, we definitely will not, that we do not already know?

Mr Straw: Since this is a public session and there are members of the media here, I do not want to over-egg what I am saying through your interpretation, but there is a difference in the scale of things between not ruling something out and considering it. On the scale of things: I am not ruling it out. There are some things I would rule out. I do not rule this out. You and your Committee, Chairman, are devoting a lot of time to this issue, and I want to see what you have to say. That is not passing the parcel: I think that is a sensible way to do this. If you are going to go for change in this area of law, you have to do your very best to make sure it is pretty consensual - not absolutely agreed, but it would be ludicrous to have it so that it becomes an issue of a partisan battle. I would just say in my own defence, as it were, that I recognised in 1998 when we were putting the Human Rights Act together and early 1999 that there were not just concerns in the media but that they needed to be dealt with. There were also issues of the churches and religious organisations. We sought to deal with them. But I am not in favour of altering the articles. That, as the Master of the Rolls said, would involve a huge change in approach by the three parties to do that, but I have never ruled out the equivalence of sections 12 and 13 in the Human Rights Act, which are to do with procedure and alerting the court as to how they should tip the balance and where they should shine the spotlight.

Q979 Chairman: There is no doubt that section 12 was the one area where Parliament attempted to give guidance to the courts. We have just heard from the Master of the Rolls that, indeed, if section 12 is applied when an application for an injunction is made, the judge should give greater weight to the importance of freedom of expression. The Master of the Rolls also conceded that on a Saturday night when the News of the World comes along and says, "Here's our splash story," and the subject of it says, "I want an injunction," the chances are that the judge may well say, "Well, we can think about this over a few days and I will give a temporary injunction to allow us to have greater consideration," which of course is the last thing the News of the World wants, and therefore the case of the media is that section 12 is not really having the effect intended and that judges do tend to grant injunctions.

Mr Straw: As far as that is concerned, Chairman, I would like to see the evidence. I do not have data. Looking at summaries of the evidence you have already taken, one of the questions raised was data on the number of applications made for interim injunctions out of normal hours, or, indeed, in hours as well, and the numbers granted I would like to see what the data is on that and, also, before and after the coming into force of the Human Rights Act. I guess that I am probably the only person in this room who has had experience of not only seeking an injunction on a newspaper but being successful in getting it on a Saturday night, and that was in respect of the leak of the Lawrence inquiry report to the Sunday Telegraph in mid February 1999. The argument there was about a breach of copyright, rather than a breach of privacy. In the end the court did grant the injunction on the grounds that there was no public interest in publishing this document on a Saturday when it was going to be published anyway the following Wednesday, but they were not patsy about this at all - I mean, they were pretty thorough. Section 12 says in its first subsection: "(1) This section applies if a court is considering whether to grant any relief which, if granted, might affect the exercise of the Convention right to freedom of expression." Although, as the Master of the Rolls correctly said, it specifically, as in subsections (2) and (3), relates to interim injunctions, subsection (1) makes it clear that it is drawn more widely and has general application.

Q980 Chairman: On the issue, however, of injunctions, you may have seen from summaries of the evidence we have received that one of the main issues that has been raised with us, particularly by Max Mosley and, indeed, by Schillings, Solicitors, was their argument that there should be a right of prior notification, that if a newspaper is going to put you on their front page tomorrow morning, you should be told that is going to happen. The media have argued in response that the reason they are opposed to that is because if I was told that I was about to be exposed in the newspaper, I would immediately go and seek an injunction. Your argument would be that the hurdle to acquire an injunction is set quite high under section 12, and therefore that should not necessarily be an argument against pre-notification.

Mr Straw: Yes. I also saw that Mr Dacre said: "99 times out of 100 we inform the person about what we are going to say and ask for comments." As one of those people whose circumstances have been given a slightly wider audience recently by the Daily Telegraph, they certainly afforded me that courtesy. Again, I will look to see what your Committee has to say on this. I can see there is an argument which goes: "The bar is set high for an interim injunction, therefore what is there to lose if the media are required in any circumstances to inform an individual of anything which is potentially going to breach their rights to privacy or, I assume, be defamatory?" but I have to say, on the scale which I gave to Mr Davies, that I am very sceptical about going down that route. The reason why newspapers go to individuals to ask whether things are true or not is, first, because, funnily enough, they have an interest in telling the truth; they do not want to develop a reputation for telling lies. For example, in the case of the Daily Telegraph in my own circumstances, it was a good idea from their point of view that they did come to me, because one of the suggestions they put to me was fundamentally untrue - which was where our second home was. It was sensible for them to do that. They apologised for that error, it was not published, and that was the end of it. So they have an interest, and they also know that if in subsequent proceedings it turns out that, frankly, they have been pretty casual about checking their facts, that is likely to go to the issue of damages and certainly not find favour in the courts. There could be cases, however, where they are doing this with some villainous behaviour, seriously villainous behaviour, where they are, for example, trying to protect a vulnerable witness. In those circumstances it is right for the media to be at risk on this, but if they, having looked at all this, having had good legal advice, having satisfied themselves that what they are doing is in the public interest and that there is this genuine risk of whoever they are going against using their money or, worse, using other power, then I think they should be entitled to publish and I think this should be their judgment.

Q981 Chairman: Say they were investigating a serious criminal, where there might be a risk to a witness if they were to tip him off, then surely any subsequent action for failure to pre-notify would fail in the courts if the newspaper was able to demonstrate that there was a good reason why they did not give pre-notification.

Mr Straw: Indeed. That is true. For all of us - and it is usually Sunday newspapers - who have had the call on a Saturday afternoon to find out this, that and the other - and I have been in public life now for 40 years, so over the years, from time to time, you get these calls, which may be about political issues or may be about personal family issues, as they were in my case some years ago, and then obviously now on the expenses stuff - funnily enough, it seems to me, whatever else one thinks about the press, there is more of a requirement on them to observe standards of truth. They have the same interest, in many ways, as the person about whom they are reporting, to ensure accuracy. Why on earth would they want to put material in which is obviously inaccurate? It is also the case that sometimes they leave it a bit late, but they do inform the person about whom they are going to write with sufficient time normally - just - for countervailing action to be taken if necessary. Chairman, my sense is that this current practice by the press is not broke, and I think the prescription could be worse than the problem.

Chairman: You will appreciate that this was raised by Max Mosley, who did have his private life exposed to the entire world, who did then go to court and who did win. He obtained a judgment that the articles should not have appeared, but of course it was too late by then: his privacy has been removed. His case to us was that he is not unique; that this is a practice that newspapers quite regularly do; and that a prior notification would offer some defence to people who should have the right to have their privacy protected.

Q982 Rosemary McKenna: Perhaps I could add to that. We have heard evidence from private individuals who say that stories with a grain of truth have almost destroyed their private lives and their families' private lives, and that there was no prior notification.

Mr Straw: I do not want to go into details that were public ten years ago, but having experienced this kind of story, families are put under huge pressure in these circumstances. We were told about the story in advance. It is the publication of the story that is the problem. I have no reason whatsoever to disbelieve what Mr Dacre was saying to this Committee, that 99 times out of 100 the media are going to tell the party. Let me jus saying the case of Mr Max Mosley, it may be that if they had told him at five o'clock he would have gone out and got an injunction. He might have done. It is possible, because he has the power and the money to do so. Most people do not have that. There is a need to secure a better balance here, if that is what the mischief is that the Committee identifies. My first port of call here would be the Press Complaints Commission Code, with the understanding, which I think is the case - and I am not a defamation lawyer, Mr Farrelly - that if that was breached in a particular case, then that breach of the code, amongst other things, would be capable of being brought to the attention of the judge in defamation or privacy proceedings.

Q983 Paul Farrelly: I hope I am not leaping out of the train of discussion, Chairman, but in relation to prior notification, when we were taking evidence earlier on I gave the example of the case of Robert Maxwell. There are stories where time is an element, particularly in financial investigations, particularly if people are fund raising, where prior notification as a mandatory rule would be very difficult and would stop a lot of serious journalism. In my experience there are two circumstances where there would not be prior notification: the case where you have the subject bang to rights whether it is an intrusion of privacy or not, such as the Max Mosley with the video, or where the newspaper does not care whether they have the facts right because they make a judgment that the person cannot afford to sue. Otherwise, generally, I think newspapers are careful to check their facts. For the Daily Telegraph, I am sure they will have checked what came out on this occasion but I am sure they would have a very strong public interest defence and any action against them would be undermined via government or any of its agencies - like the German Government have paid somebody from an America bank for stolen data on tax evaders, so I am sure those issues are being weighed. Legal change does not happen in a vacuum. Constitutions do not happen in a vacuum. The reality is that in this country we have a press of a dual nature. We have, in the vernacular, the "tabloid press" and then the more serious press for which privacy is not generally an issue; they do not go in for intrusion of privacy. Have you considered, in the circumstances in which we live in this country, whether there is potentially a trade-off between statutorily strengthening privacy so that it is not just judge-made case law, on the one hand, but, on the other hand, a greater protection, a stronger statutory defence for serious investigative journalism in the public interest? Have you considered whether there might be a trade-off here?

Mr Straw: I am open to ideas here, Mr Farrelly. Say you do what you have suggested and you strengthen people's privacy - and I will come back to why I acknowledge that a case is made for that - and you strengthen the right for serious investigative journalism - so you have hardened up the rights on both sides - you are still going to end up with somebody having to make a judgment about the conflict. If you take investigative journalism, the thing that has been put to me as something that has a chilling effect on investigative journalism is not the court's interpretation of article 8 versus article 10 but conditional fee arrangements for defamation cases. It is for that reason that I believed and do believe that there was a necessity actively to look at amending the law on CFAs and defamation cases in advance of the very thorough review that Lord Justice Jackson is undertaking. That is why I published the consultative document earlier this year, where the consultation is closed. If I am presented with evidence that there is a particular problem - as unquestionably there is here: I think the argument is overwhelming, a particular problem which needs dealing with, you go ahead and deal with it. That is how I deal with that approach. If you ask me as an individual what I think about the tabloid revelations which intrude into people's private lives, I say that I am ambiguous about this. I buy - not out of expenses! - tabloids on a Sunday. I am sorry to say, if apologies are needed, that I am sometimes entertained by them. On the other hand, I also sometimes think, "What would it be like to have, say, details of your total private life exposed?" None of us would want to see our public lives gratuitously spilled over the papers - although the papers are getting slightly better about this matter then they were. That is an area where I do feel very sorry for people, and if they are people of humble means, it is not going to be open to them to take any kind of proceedings in normal circumstances. I think that is about trying to get the press better to set a standard there for themselves. I think it is fairly hard to legislate for that.

Q984 Chairman: We are going to move on to the CFAs, but before we do, on the issue Paul raised there is case law which is now often cited (originally the Reynolds defence, and then came Jameel) and that is held up as being available to newspapers who have undertaken responsible journalism and through not their own fault might have made a mistake, and yet the evidence we have received is that it is virtually never used for a variety of reasons. Do you think there might be a case for putting it in statute?

Mr Straw: We would certainly look at that. That was the basis of the 1952 Defamation Act - at least that is my recollection - to encapsulate certain defences into statute law. Yes, if there is a case, one would look at it. In the conversations I have had with media organisations, they have not said to me - and it does not mean they do not believe this, but they have not said it to me, as I recall - that there is a problem with the Reynolds defence. They keep saying to me, especially amongst the regional newspapers or some of the less well-financed national newspapers, that they have a problem about being at risk on costs in respect of CFAs or in respect of, say, contemporary Maxwells, and that is, I think, a real problem.

Q985 Chairman: Is that something you are considering?

Mr Straw: I am not considering it at the moment.

Q986 Paul Farrelly: It is the case that the traditional concerns of newspapers regarding libel and its restrictive nature in this country have given way to the concerns. It is the operation of CFAs, but there is a double effect. What the Chairman is trying to get to is whether, given the evidence that we have received that the responsible journalism defence is not really working in practice and it becomes a trial of the journalist and the journalism, any consideration might be given to putting that on a better standing.

Mr Straw: On that one, I would certainly be very happy to look at it.

Q987 Chairman: It would require you probably to put into a statute a definition of public interest. Is that possible?

Mr Straw: Is it possible? It is possible. We have thought about it in respect of the Freedom of Information Act. Ultimately, if you have a public interest test, you can say that these matters need to be taken into account - certainly, in a discrete area like investigative journalism - but, however detailed you are, you will come to a point of how you apply those general principles to a particular set of circumstances and that is a job for the courts. In the Freedom of Information Act we gave guidance to the tribunal and the courts by the nature of the exemptions - so some things were not exempt, some things were completely exempt. On other things, for example, matters under policy consideration, that is a guidance to the courts and they have to make the judgment.

Q988 Rosemary McKenna: The Committee has received a lot of evidence on the recent phenomenon known as libel tourism, where foreign nationals use UK courts to sue non-UK companies or individuals for libel. Should the Government issue statutory guidance on jurisdiction in those circumstances?

Mr Straw: As the Committee will know, Chairman, there has to be some connection with this jurisdiction otherwise the court will not hear it. I think it was before your Committee that one of the witnesses was asked for details about the number of cases which arose and the answer was that you would wish the data to be obtained from the court service. If that is not already in hand, I will make sure that it is. There are criticisms of our defamation and privacy jurisdiction. One is that it is very expensive - and until the opposite is proved, that is also my view. The second is about so-called fraud shopping. On that I have yet to be convinced that there is a significant problem. I am not ruling it out; I just want to see what the evidence is. Some of us face situations where people have a bee in their bonnet in a particular case, they think they have been unfairly treated, but when you go to it you find that, although they may have some cause for concern in that case, it does not make an argument for a change in the general law.

Q989 Rosemary McKenna: We were given evidence that a case was based on a book published in America, brought by a Middle Eastern businessman with Irish citizenship which was heard in the UK courts.

Mr Straw: And only 23 copies of that book were published in this country, as I understand.

Q990 Rosemary McKenna: But then it is in case law, is it not?

Mr Straw: On the face of it, the circumstances of that case were something of a surprise to me. Picking up something the Master of the Rolls said about the media strategy of the courts, I have always found it wise to read the small print of judgments before rushing to comment on them myself. Sometimes you find there s a judgment at court which, even after you have read every word, remains slightly eccentric in your opinion, but usually, whether you agree or disagree with it, you think there is a good argument here.

Rosemary McKenna: We are looking forward to reading the evidence of cases.

Q991 Chairman: You say you are not persuaded necessarily that there is a problem here. Are you concerned that the US Congress is about to pass law effectively allowing American courts to overturn UK court judgments?

Mr Straw: The American Congress, subject to the other states of that realm, is sovereign in these areas. We could do the same here, if we wished, to make judgments unenforceable abroad in this country. I do not have any particular comment on that.

Q992 Chairman: Obviously we could, but is it not a matter of concern that this has already been passed in New York and Chicago, I believe, and now in Washington? Congress is essentially saying that they no longer have faith in the UK courts and the judgments they are reaching.

Mr Straw: There is a reputational issue about defamation proceedings in England and Wales. I cannot speak for Scotland. Part of that is to do with the costs. Let me say there is a reputational issue in other areas of proceedings which are equally of concern to me. Say in medical negligence, the costs which are payable to the plaintiffs are typically on an upward trajectory and very difficult to control within the existing system, whilst the defendants' costs can be controlled, not least by a proper client/lawyer relationship and bidding them down. There is that problem. I would simply say, Chairman, on this issue of fraud shopping that I have not seen sufficient evidence myself at the moment to suggest that there is a major problem here, but I await, amongst other things, your Committee's response on this because you will have the evidence, and you have seen a lot more evidence than I have.

Q993 Chairman: I do not think it is about costs.

Mr Straw: I understand your point.

Q994 Chairman: We talked to lawyers in New York and in Washington, and the concerns they express are very serious. They are essentially saying that the Act became known as the "Libel Terrorism Act" because it was being used, they said, to protect people who were financing terrorism from exposure. The book by Rachel Ehrenfeld was going to reveal the links between a particular Saudi businessman and al-Qaeda and it was his attempt to use the UK courts to suppress that which meant it was quoted in America as being libel terrorism. Surely that must be of some concern to you. That is a view being taken by legislators across America.

Mr Straw: Of course it is of concern, but it is also the case that the substantive law in America in some of these areas, because of the First Amendment, is different and their perspective is different. I do not know the details or the evidence against this Saudi businessman. I am all in favour of people against whom there is overwhelming evidence of involvement in terrorism being named. I am not in favour, unless it is a really serious charge, of media organisations effectively convicting people of terrorism. I think the bar has to be pretty high if what the media is seeking to do is to make the most substantial allegations of terrorism against somebody. But I say I am open to look at what you have to say.

Q995 Chairman: Is the British Government making any representations to the US Government about the measures that are currently under debate in Congress?

Mr Straw: I have not myself seen any instructions. I will check on that because it could be that elsewhere in the entirely seamless system of British Government this has happened. It is not within my knowledge or that of my officials.

Q996 Paul Farrelly: On this point of libel tourism, there is one step that the UK could take which would rule out some of the more extreme cases, which is to move on with the times and the internet and move on from the Duke of Brunswick and the institute of single publication. Mr Justice Eady, in one recent judgment allowing jurisdiction here, said that in due course an international agreement might be reached as to the appropriate way of resolving claims arising out of internet publication. But we do not need international treaties; we could institute that into UK law as one sensible step, would you not think?

Mr Straw: I am about to publish a consultation document on defamation and the internet - we will certainly publish it before the summer recess - which can deal with this issue, and it also deals with issues of liability of the internet service providers - this problem which these days is repeatedly raised by the media of so-called repeat publication by online archives. We are having to consider this ourselves in the context of online access to court data, to convictions - which I am very keen on, because I think that the public have a right to know whether X or Y has not only gone to court but what happened, but of course there is then an issue of proportionality about how long that stays on immediately accessible to a far greater degree than it would be just in the files in the public library.

Q997 Paul Farrelly: Clearly there is a focus on the problem and that is very welcome. There is a second issue to do with jurisdiction. We have received evidence not only from media companies but from very serious non government organisations that the UK libel laws, because of the potential for forum shopping, are having a very restrictive effect on what they can publish. I will give you an example. Here in the UK, of course, any minor council document attracts qualified privilege.

Mr Straw: Council? Local authority?

Q998 Paul Farrelly: Pronouncements by local councils, individuals, but there are non government organisations that cite the findings of serious panels from the United Nations about the activities of arms dealers, for example. There is one very well-known arms dealer, whom I will not name under privilege here but I have asked you about him in relation to Zimbabwe when you were Foreign Secretary years ago, and action has since been taken by him, but that sort of individual has the facility to suppress some of the legitimate activity of NGOs. There is a clear issue here. Clearly it can be addressed by statutory protections for responsible journalism, responsible publications, but there is not just a reputational issue. From the evidence we have had it is a substantive issue for the work of serious organisations.

Mr Straw: I accept what you say. Again I will await your inquiry. You are going into aspects of the operation of the law of defamation as well as of privacy, frankly, in greater detail than I have done. Funnily enough, I have considerable faith in making Parliament work better. If we end up in a position where your Committee, Chairman, has initiated a series of changes which we then accept and get into legislation, I think that is a good way of handling it. All I need is the evidence. I had the evidence on the CFA thing, so I acted. The evidence is there. That issue, although it does not for a second mean that it is not an issue, has not happened to have been raised with me.

Q999 Philip Davies: Following on from where Paul was, the biggest difference, of course, for America and Britain is that they place much higher weight to freedom of speech, and that is reflected in their libel laws, where the burden of proof is the other way round in America compared to Britain. It is something I would like to see, but, given where the burden of proof is, is it not a surprise to you that, given that the onus in our system is on the defendant to prove that what they have said is true, and the claimant has no burden of proof at all, the legal fees for the defence side tend to be considerably lower than the legal fees on the claimant's side? Would you not think, given it is the defence side which has to prove everything that they have printed is true, that their fees would be higher?

Mr Straw: I do not make any comment on the hourly rates or overall fees charged by the lawyers for the defendants, except to say that there is or should be a broad equality of arms between the newspaper organisation and the solicitors' firm with whom they strike a deal over costs. And they can control it. And I think they do - not least by saying, "If you continue to charge costs of this scale, we will move our work elsewhere." This is happening now in respect of NHS litigation. The legal firms on the other side are in a very different position. They face none of that kind of natural economic pressure to keep their costs down from their client because the client has agreed a CFA arrangement with them. This document, as you know I basically agree with it. I have no comment to make about the level of fees for defendants, but I think that the level of fees for plaintiffs' lawyers is too high. That will remain my view unless and until they are able to advance a case to your Committee or to me, based on the public interest, for them to continue to charge rates at this level, with the uplift at this level. I am not yet convinced.

Q1000 Philip Davies: Again that is encouraging. I certainly view, according to the comments you made earlier, that this, probably above all else, is having a chilling effect on journalists, in that they are becoming reluctant to print stories that they probably should be printing in the public interest as a result of it. But when we spoke to our eminent judges earlier, they seemed to indicate that there did not seem to be sufficient evidence upon which to act. We put it to them that a vast proportion - we heard 98% - of CFA cases were victorious. They only failed in 2% of cases, but they said that they did not have any evidence. From my recollection of what they said, they seemed to be encouraging the Government to find the evidence of this kind of thing, so that decisions could be made with all the facts in front of us. Does the Government plan to commission work to get the evidence of how CFAs are working in practice?

Mr Straw: In defamation cases?

Q1001 Philip Davies: Yes.

Mr Straw: The evidence has been presented jointly by the Society of Editors and the Newspapers Society, who did a long schedule of known CFA cases. I do not think it was completely comprehensive and there has been further discussion between Lord Justice Jackson's staff, as I understand it, and the media organisations. I think where we will get to is that there will not be a huge argument about the data, there will be debate about what is reasonable. My view is this: first of all, in quite a number of cases, not in every case - which is what the plaintiffs' solicitors say - the ratio between the awards of damages and costs is very significant, not to say astonishing. In the case which we quote on page 7 of this document, the Daily Telegraph Group, who were awarded damages of 130,000, was significantly less than the claimants' costs, whose base costs alone, that is before uplift, were 317,000. Just picking up your point, I am as certain as I am sitting here that the very high risk of costs does have a chilling effect, particularly on the regional and local media. It is for them to give your Committee details if they have not already done so, not for me. In a matter involving one of the Lancashire newspapers - not, let me say, the one that circulates in my constituency - where they offered an apology for what at worst was a simple mistake and an innocent mistake, they face not only having to pay damages but ridiculous costs, because in the end they decided they had to quit because they were going to be at risk of more costs. That is not the purpose of a CFA arrangement. A CFA arrangement is there to ensure better access to justice; not that if people are inadvertently subject to some mistake which can be corrected they can then go in for a lottery.

Q1002 Philip Davies: Is your main concern about CFAs the success fee, in the sense that the Master of the Rolls said that the success fee was there in order to cover the cost of cases that they lose? But if, as seems to be the case from the evidence that I have heard, they tend to go on CFAs when they think they have a case which is a racing certainty, which they could not possibly lose, so that there is no risk and they are, therefore, in effect, earning up to double for the easiest possible cases to prosecute, that seems to me to be sort of some kind of a racket and an abuse of what was intended. Is that your major concern about the CFAs?

Mr Straw: I would like to refer you to the questions that we ask in the consultation document, which are about, for example, whether you introduce a maximum recoverable hourly rate and whether you have cost capping in every case or just in some. There are also questions about the issue of after the event insurance, including its prior notification to the other side, whether there should be a proportionality test to total cost, not just base costs, and also the scope of CFAs as a whole. We are now just past the closing date and we are currently assessing the responses to these consultations. That is where we are. But those are key questions, it seems to me.

Q1003 Philip Davies: To be topical, do you fear that they may be sticking to the letter of the rules of CFAs but not necessarily to the spirit of the rules?

Mr Straw: I am sorry, who are "they"?

Q1004 Philip Davies: The lawyers who are taking these cases under CFAs, that they think they do not have a possible chance of losing.

Mr Straw: What happens in all sorts of areas in litigation is people seek to push their advantage. They want to win. I used to earn an honest penny by that approach. The blunt truth is that if you are faced with a prospect of wining through some literal or casualistic interpretation or losing on the basis of conceding the spirit of what is behind that particular provision, your client would expect you to go for the former. That is how it is. What you have to do is to make sure the rules are pretty robust.

Q1005 Paul Farrelly: Clearly I am so biased that I read some of the questions in this excellent document as rhetorical questions, because the answers are so blindingly obvious. Perhaps that was the spirit in which it was intended.

Mr Straw: Not quite. I would not have decided to issue the consultation in advance of and in parallel with Lord Justice Jackson's review had I not thought that there was a particular mischief that needed to be dealt with. And I wanted to get on with it, so I was satisfied that the media organisations and others made a case. I have yet to see the results.

Q1006 Paul Farrelly: This document is clearly about CFAs and defamation and this is the focus of our inquiry. Just so that we can take evidence on this and we do not lose the perspective on the wider application of CFAs, could you say a few words about your concerns about CFAs and their effect in the NHS and medical proceedings, just to give us some perspective?

Mr Straw: Generally, one of those responding gave this answer in earlier evidence. CFAs, on the whole, have worked to improve access to justice in the context in which civil legal aid for these areas was removed. There was never civil legal aid for defamation but there was, for example, in areas of personal injury. You do not want, therefore, to throw the baby out with the bathwater. On the other hand, what concerns do I have? I think there is a particular problem in medical negligence cases of the interaction of the availability of legal aid with CFAs, which is the only area, essentially, of personal injury, in its widest sense, where legal aid is available. We have to be very careful here. It was decided ten years ago not to exclude medical negligence cases from legal aid when all other PI cases were being excluded, because the number of medical evidence cases was rather fewer and the law was being developed and so on. Nobody wants to see an applicant of low means who has suffered egregiously under the hands of the NHS being denied access to justice. The interaction of those two is something I am looking at with some care. There is a wider issue about CFAs which is basically to do with the same issues as raised here, levels of hourly rate and levels of uplift and advance information of ATEs. Lord Justice Jackson is getting to grips with that and I look forward to his report.

Q1007 Paul Farrelly: Just so that we can have a perspective, the operation of CFAs is a serious issue in defamation.

Mr Straw: Yes.

Q1008 Paul Farrelly: Just as a statement, it is a serious issue within the medical field as well.

Mr Straw: It is not the principle, but it is the practice.

Q1009 Paul Farrelly: It is the effect.

Mr Straw: Yes. There is one other area. Either yesterday or today I told the House that I am going to take legislation to statutorily control contingency fee arrangements. These contingency fee arrangements are currently unregulated. They are the ones which are being used by certain solicitors' firms in respect of employment tribunals, particularly equal pay arrangements, where local authorities and trade unions have come to an arrangement, say, over equal pay and phasing it in, and then the lawyers acting for individuals have sued local authorities and sued the trade unions as well. These fees, for reasons to do with an anomaly in interpretation of the law, are currently totally unregulated, so I am going to deal with those.

Q1010 Paul Farrelly: Your case with your Lancashire newspaper seems to be one particular case of which you are aware where the offer of amends procedure is clearly not working as it should. Another case we have taken evidence on is the case of Tesco v the Guardian where the Guardian went through so many hoops, the like of which I have never seen as a former journalist, and clearly it did not work then. What consideration have you given to how the offer of amends procedure might be changed to give the swift and less costly redress that was intended?

Mr Straw: I certainly think that needs to be looked at and actively considered. That was one of the surprises in this Lancashire newspaper case. Obviously I did not know all the details. I only had the explanation as the newspaper and the Society of Editors had put it to me, not the other side, but it did seem pretty odd.

Q1011 Paul Farrelly: Coming on to responsible journalism again, there are different ways of cracking the nuts. In the Tesco case, the Jameel defence was not employed because they did not think it would work. They got the tax wrong but the thrust was right. It turned out that the company was aggressively avoiding the tax through additional evidence anyway. In the States, of course, Tesco might be considered a public figure and that sort of lawsuit would not be possible. Australia has gone further than the quarter-way house that we have; it has taken a different step, when it reformed its libel and defamation laws, of saying that certain bodies with employees of more than ten cannot sue, although individuals can, and they have to go over certain hurdles. What would be the advantages and disadvantages in your opinion of an Australian law?

Mr Straw: The advantages from the point of view of the media organisation would be obvious. They would escape liability in all circumstances. But bodies corporate do have reputations and on their reputations depend the livelihoods of, in large corporations, thousands of people and their share price, in which your pension fund or mine might be invested. I am aware, just, of the bare bones of what has happened in Australia, and I think we should always look at parallel examples but I would need a really strong argument in favour to move on that.

Q1012 Paul Farrelly: Do you think that public figures should be required to face additional hurdles in defamation cases?

Mr Straw: They are in practice. And privacy as well. I do not complain about this, for the avoidance of doubt, but the level of detail, for example, which is now available about our expenses is not available/could not be made available in respect of almost anybody else in British society. That is just true. That is something you have to accept. It goes with being an elected representative. If you are a senior minister, you work in a goldfish bowl. Maybe that is just life. My concern has never been about myself so much, although I think that if you, as I seek to do - I do not parade my family but keep them in the background - but if you do parade your family then I think it is tough - you are entitled to some privacy yourself as far as your family life is concerned. I think one's own family, in any event, is entitled to privacy unless they are adult and they volunteer for public life. As a matter of fact, on that I think the papers are gradually getting better rather than worse, but it is very important that members of family of people in public life, not least MPs, are protected.

Q1013 Alan Keen: Why did you not intervene to defend Mr Justice Eady against Paul Dacre's when his attack on Mr Justice Eady was generally accepted to be inaccurate anyway?

Mr Straw: My duty, indeed I swear an oath - three oaths altogether - to this effect: to uphold the integrity and independence of the judiciary. If I had judged that that was being significantly challenged in this case, I might have said something but I did not judge it necessary, and it is certainly not my role to provide a running commentary on particular judgments which may or may not be controversial. Indeed, that would then be to do exactly that which I am not supposed to do, which is, as it were, to second-guess what the courts have done. At the moment, if I had said anything about that case - in any event, it could have gone to appeal - I would have been interfering in essentially an argument between a court who happened to find on behalf of the plaintiff and the defendant newspaper (News International) and those who were supporting it. I think it is entirely appropriate in a case like that or loads of other cases for me not to offer a running commentary. It is different if you take criminal cases. Sometimes you get judges or magistrates being criticised for bail restrictions, for example. If I think it necessary - and I have in the past - I have gone out and said they may, as it transpires, have made the wrong call, but this is an impossible task that we are expecting people to do, to predict the behaviour of people on risk factors which they do their best on. You can never be certain that if you put an offender on bail or a defendant, he is not going to commit a further offence. I judge it on the particular facts.

Q1014 Alan Keen: I can recollect that two lawyers agreed, when we put this question to them earlier on in the inquiry, that the law possibly should be changed, although it would be difficult. This is in the course of newspapers whose aim it is to sell newspapers, so the headline and also the introductory paragraph might indicate one thing to the public and, as long as further down they put that there was nothing wrong, nothing illegal, that means it is fine - and it does not matter how misleading the headlines or the introductory paragraph are. Two lawyers said they thought that the law should be changed so that that could be taken into account. The main thing was that the public were misled on purpose by the newspaper. Paul Dacre said, by the way, that the Daily Mail has never done that to his knowledge.

Mr Straw: If there is argument about whether or not it is defamatory, it would be the article as a whole that would be taken. If in screaming headlines it says, "XYZ is guilty of these crimes" and he is accused of being a terrible person and then you get to the bottom of page 23 and in tiny type it says, "XYZ denied this and we do not have any evidence to prove it," of course it would be defamatory. As I have said earlier in answer to one or two questions, I look to see what your Committee says, Chairman, but I think it would be pretty difficult to try to come up with some mechanical rule which in advance of a particular case distinguished between what was said in the headline and what was said in the body of the story. How these things are judged in practice is that you look at the story and think, "What would any normal reader - the man on the Clapham omnibus - take away from this?"

Q1015 Alan Keen: It seemed to be accepted that up until now that was okay.

Mr Straw: I am not saying it is okay, but I am saying that of course headlines can be defamatory. I am not a defamation lawyer, but I am quite certain that if a headline was outrageously defamatory, the fact that later down in the story it said words to the effect, "Oh, by the way, we don't think this is true," or "It's only an allegation" would not be much of a defence. You can show that the headline was malicious, apart from anything else, and get exemplary damages. This note says: "The House of Lords indicated in the 1995 case of Charleston that, although the question of whether the text of an article is sufficient to neutralise an otherwise defamatory headline is a matter for the jury, a claim for libel cannot be founded on a headline or photograph in isolation from the related text and the question of whether an article is defamatory has to be answered by reference to the response of the ordinary, reasonable reader of the entire publication." That, really, is what I said.

Q1016 Alan Keen: I was shocked when I received the expenses detail that the Telegraph are alleged to have bought to find that it included some of my staff's bank details. Who should care about that? Has any action been taken to make sure that the Telegraph is caring to keep that information?

Mr Straw: Because the Daily Telegraph has the unredacted details, they will have access to a lot of information. As far as I know they have been extremely careful not to publish any of that detail. They have no interest, financial or public interest, in making any of it available. I am told that the Information Commissioner is in touch with the House authorities about this, because clearly there are various obligations under the Data Protection Act - which I am pretty certain the Telegraph would be well aware of.

Chairman: I think we are in danger of straying into an area which would keep us here for another two hours. On that note, I would like to say thank you very much.