However, it will not have escaped the Committee’s notice that the world has changed. Not only do we have free schools in competition with those run by local authorities, but the voluntary sector runs many services on behalf of, and paid by, public funds. Increasingly, the private sector, driven by a profit motive, is also a big player in public service provision. Therefore, first, users need to be able to comment on those services without fear of action. Secondly, ratepayers and taxpayers must similarly be able to comment without fear of action. Thirdly, given that most such services are now won through competitive tendering, it seems extraordinary that, in compiling their bids, private or voluntary sector bidders can say anything about those against whom they might be bidding—in other words, the local authority—but are in a position to take action if the local authority, or indeed any of its service users, says a word about them that they do not like. If a local authority school, for example, is competing with a free school, the free school could say more or less anything it liked about the local authority school, and the local authority school could have an action taken against it.

7.15 pm

This is not a small matter. Public service commissioning employs 1.2 million people. Some of these services cater for the most vulnerable in society. Nearly 5,000 children are in children’s homes, where there have been allegations of young girls being drawn into the sex trade and issues of duty-of-care loom large. We all know well about the Winterbourne View home and the care of many frail residents. Is Winterbourne to be protected by being able to reach for the defamation threat?

According to War on Want, even DfID is now seeking to privatise aid to Africa by using offshore trusts. That may or may not be the case but if such a trust was involved, would War on Want be able to hold it to account in the way that it can DfID? The UK Border Agency recently issued £1.7 billion-worth of contracts for asylum-seeker services, including accommodation. All eight contracts went to just three companies; namely, G4S, Serco and Clearel. Are these providers spending taxpayers’ money on sensitive services really to be protected from criticism by being able to hide behind the threat of defamation action? Just last week we read of G4S evicting a pregnant asylum seeker from her home, even though it was aware that she was being induced to give birth that day.

I have no idea of the truth or otherwise of that allegation but it is important that such allegations can get a hearing without an action for defamation arriving in the post the next day. This is not to defend inaccurate stories. It is to realise that the threat of action does not

17 Dec 2012 : Column GC464

mean that the story is defamatory. It can often be the easiest way to silence a critic. Another example is Applied Language Solutions, owned by Capita, which supposedly has been providing court interpretation services. Surely it is right that we can hear questions about its standards without its lawyers bullying commentators into silence.

Our amendment would cover only those parts of a corporation performing a public function. Thus, Virgin Care would lose its right to sue over its commissioned work of public services, but Mr Branson could still protect his brand’s name where Virgin’s profitability was at risk in other areas.

In the Commons, the Government rejected this idea on the rather limp excuse that the court in the Derbyshire case had considered and rejected it. However, that was 10 years ago when outsourcing was a fraction of what it is now and when the effects of competitive tendering had yet to be fully understood. Even more importantly, why do a 2012 Government who have pledged to update our defamation laws feel bound by the ruling of 1993? New legislation, surely, is exactly the time to make good any shortfall in the law.

The Derbyshire case led to the upholding of the need for uninhibited public criticism of public authorities, which we must all welcome. However, it is time to extend this to corporate bodies carrying out those very same public services as were once the purview of public authorities. I beg to move.

Lord Lester of Herne Hill: My Lords, I declare an ancient professional interest. I was counsel in the Derbyshire case from beginning to end. I think that I should explain some of the background, which I hope will not bore the non-lawyers more than the lawyers. In the New York Times and Sullivan case in the United States, the problem was that a police officer brought libel proceedings against the NAACP. The Supreme Court of the United States, in a landmark case, decided that where a public figure was the alleged victim of a libel, he could sue only if he showed bad faith or a reckless disregard of truth.

In the Derbyshire case, Derbyshire County Council, rather than Mr Bookbinder, decided to bring libel proceedings to protect what it called its governing reputation. I argued that the Sullivan rule should apply in English law. I failed—and I failed for a very good reason, which is that American law, illogically, looks at the identity of the claimant rather than the subject matter of the libel claim. When the case reached the House of Lords, however, that great Scottish judge— I repeat for the benefit of the noble Lord, Lord Browne—that great Scottish judge, Lord Keith of Kinkel, said that you do not need the European Convention on Human Rights to win this case. The common law matches Article 10 of the Convention, and Derbyshire County Council should not be permitted to seek to vindicate its governing reputation by using libel law and instead can go by way of malicious falsehood. In other words, rather like the United States, it could proceed if it proved bad faith or reckless disregard of truth.

That is the law as it stood and as it has stood ever since. Subsequently there have been some cases where for example a political party has been held to fall

17 Dec 2012 : Column GC465

within this rule on a case-by-case basis. When the Human Rights Act came into force it could have listed, as does the Freedom of Information Act, hundreds of public authorities that would be subject to the Act. Instead it adopted a different test from this amendment—namely, whether the body was performing functions—even though it was a private body—of a public nature. Tomorrow the Commission on a Bill of Rights which my noble friend Lord Faulks, and I are both on, will be reporting about that definition and what has happened to it.

The argument in favour of an amendment of this kind would be that it would somehow clarify the law. I put my name to it because of my interest in the subject matter. Unfortunately, I do not think it does clarify the law because it does not use the same kind of test of what is a public authority or a private body performing public functions. It uses a different test. The argument, I suppose, against this approach is that it is better to leave it to the judges to do this on a case-by-case basis. I myself am attracted to the idea of including something of this kind. I did not put it in my own Bill—I did not think about it at the time. I failed to persuade the Government to put it in their draft Bill, but there was a consultation on it. I am bound to have to say that there was little enthusiasm in the consultation for doing this. So, although I put my name to it, I have some hesitation to the way it is worded.

This is a very important constitutional question. What we are really saying is that a public authority or a body exercising functions of a public nature should have to go through malicious falsehood and prove malice or recklessness.

We would also go on to say that, of course, the individual councillors or public officers could themselves still sue and therefore that we would not be doing any injustice to public bodies in doing this.

I have taken too long to explain all of that, but it is important that one understands the full context of this. I am sure that this is a matter on which the luckless Minister will have to reflect further.

Lord Lucas: My Lords, if this amendment was passed, it would make my life notably more comfortable, but none the less I do not think it should be. In my business of running The Good Schools Guide, I spend a lot of time being uncomfortable to schools and we have on regular occasions in the past 27 years been threatened more or less successfully with legal action for defamation. That seems reasonable. I do not see why schools should not react to what I say because what I allow to be published can have a considerable effect, not just on independent schools, which obviously rely on parents paying fees, but on state schools as well. That is because if children are discouraged from going to a particular state school, that school will suffer.

There are many occasions when parents say things about schools which are entirely unjustified and it is therefore proper that I or anyone else in my position should be careful of what we say and the basis on which something is said. We must ensure that we can reasonably believe that there is some truth behind

17 Dec 2012 : Column GC466

what is being said. Although I agree that one should be uninhibited in one’s attacks on political parties and government generally, as you move away from them, you reach institutions that are smaller and more personal. An unjustified attack could have a very damaging effect, and so the law of defamation probably should apply. I would much rather see defences against the right to protest against bad public services as part of Clause 4; indeed, I think that Clause 4 could be made more specific so that it is clear that raucous views about public services are to be encouraged and given a wide latitude by the courts. Only under exceptional circumstances should those views be stamped upon. That puts the rights of the public in the context where they belong in this Bill, but to have a blanket prohibition would make schools and universities vulnerable to unjustified attacks. There has to be some form of protection against the most vitriolic.

Lord Faulks: Would not my noble friend’s criticisms in the capacity in which he has described them be protected in any event by qualified privilege? In the absence of malice, he or anyone in his position is able to express their view without fear or favour.

Lord Lucas: Yes, but that is not the way things operate in practice. A lot of the time, the views expressed by someone like me are second-hand, while the views expressed by parents are perhaps not backed up by fact. It is not that we cannot comment, but in my view schools should have a defence against something that is unreasonable. At one point we had to pulp an edition of the guide because of what we had said, and I accept that as a proper interpretation of the law. To have a situation where no school can sue under any circumstances would put them at an unreasonable disadvantage. I appreciate that someone in my position has many privileges, but they should not be absolute.

Lord Ahmad of Wimbledon: My Lords, listening to our debate with great attention means that one defines it almost along the line of whether or not you are a lawyer. I am also conscious that we have heard an array of accents, including both Scottish and Northern Irish. I will do my best to explain the Government’s position in whatever accent noble Lords believe mine to be.

As has already been said, and as I am sure noble Lords appreciate, this is an area where the law is still developing. In Derbyshire County Council v Times Newspapers, the House of Lords held that local authorities and government bodies are already prevented from bringing actions for defamation. My noble friend Lord Lester of Herne Hill said that he was involved in that case. Therefore, I speak with a degree of trepidation. However, I heard him express support for the position that I am going to outline. My noble friend referred to the Government’s consultation paper in which we sought views on the suggestion that this principle should be put in statute and on whether it should be extended to a wider range of bodies exercising public functions. A clear majority of the responses considered that wider statutory extension of the Derbyshire principle would not be appropriate and took the view that this

17 Dec 2012 : Column GC467

would represent a significant restriction on the right of a wide range of organisations to defend their reputation. Indeed, my noble friend Lord Lucas expressed that view. We share that concern. We also consider that a statutory provision would be too rigid and could also lead to litigation and uncertainty over whether particular bodies and functions fell within its scope.

As I have said, the law in this area is still developing and legislation could remove the flexibility that exists under the common law for the courts to develop the Derbyshire principle as they consider appropriate in the light of individual cases. We believe that it is better to allow the courts to do this rather than introduce a rigid and restrictive statutory provision. On that basis, I hope that the noble Baroness, Lady Hayter, will agree to withdraw the amendment.

Baroness Hayter of Kentish Town: My Lords, I thank the noble Lord for that response. I also thank the noble Lords, Lord Lucas and Lord Lester, for their contributions. Like the noble Lord, Lord Ahmad, I quake when I hear the noble Lord speak who was the barrister in the case we are discussing. However, I am disappointed by the Minister’s response. To say that

17 Dec 2012 : Column GC468

this matter is for the courts to decide seems to run counter to everything we are trying to do in this Bill, which is to provide people with a document that will inform them about these issues. Therefore, the noble Lord’s response is very regrettable. I also think it is out of time in that the increasing competition between providers puts one lot of people at a disadvantage compared with another because if a local authority is competing with someone else for the provision of a service, and one side can be sued for libel but not the other, that is a great inequality and it is not a level playing field. I dare say that cases will be brought on that basis. We shall need to return to this issue because there is inequality between different providers of services. However, for this evening, I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Clause 2 : Truth

Amendment 10 not moved.

Clause 2 agreed.

Committee adjourned at 7.33 pm.