Overview

This Defamation Bill aims to amend the law on defamation, specifically regarding the ability of companies and other non-natural persons to sue for defamation. The bill focuses on ensuring that such lawsuits are only pursued when substantial financial harm is demonstrable, thereby preventing frivolous claims.

Description

The bill initially proposed a new clause restricting defamation claims from corporations, other non-profit legal persons, and trade associations. This clause required court permission to bring a claim and mandated that substantial financial loss be proven. The House of Commons rejected this, arguing it was unnecessary and inappropriate to have special provisions for non-natural persons.

However, the House of Lords proposed an alternative amendment (2B). This amendment modifies the definition of "serious harm" in relation to reputation for bodies trading for profit. Now, harm to reputation is not considered "serious harm" unless it has caused, or is likely to cause, serious financial loss to the body.

Government Spending

The bill is not expected to have a significant direct impact on government spending. The cost implications are likely to be minimal, primarily related to the administrative burden on the courts in dealing with applications for permission to sue.

Groups Affected

The main groups affected are:

• Companies and Corporations: The amendment limits their ability to successfully sue for defamation, requiring them to prove serious financial loss. This is likely to make it more difficult and expensive for them to pursue such actions.
• Other Non-natural Legal Persons (e.g., partnerships, trusts): Similar to companies, these entities will find it more challenging to pursue defamation claims without proof of substantial financial harm.
• Trade Associations: These associations representing profit-making organizations will face the same limitations as corporations in bringing defamation claims.
• Courts: The courts will experience an increased workload related to applications for permission to pursue defamation cases.

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