How will the new defamation bill affect businesses?

Businesses who have or are considering taking out a professional indemnity insurance policy will know that cover is generally provided for libel and slander. This issue can affect a number of professions – from publishing and journalism to broadcasters – resulting in expensive and lengthy defamation lawsuits.

This week has seen the publication of Lord Lester’s private members defamation bill, aiming to ‘tidy up’ libel law and subsequent litigation procedures. According to analysis by The Guardian, however, some aspects of libel law may become more complex if the defamation bill is passed.

The Guardian Legal Network points out that Clauses 11 and 12 of the bill – calling for complainants to prove that a libellous publication has caused substantial financial loss and urging courts to dismiss defamation cases unless this is proven – may actually make legal disputes over defamation more drawn-out and complex as each side attempts to prove or disprove the rather vague concept of “substantial harm”.

Whilst this may not affect companies with comprehensive professional insurance cover for litigation fees – it could actually make claims on insurance less substantial due to quicker processing of libel disputes – it could be extremely costly for those without it.

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