Alan Rusbridger is no pushover. As a matter of fact, the editor-in-chief of The Guardian can really dish it out. His left-liberal British daily takes on politicians, celebrities and multinationals alike. But last year even Rusbridger was cowed when he got a letter from the London law firm of Carter-Ruck – on behalf of the supermarket colossus Tesco. In a painstakingly researched article, The Guardian had disclosed Tesco’s use of tricky transactions to trim its tax bills. And that was not untrue, though the authors did confuse two different kinds of tax. The newspaper admitted the mistake and published two apologies, but Carter-Ruck would not let up. To keep fighting to the bitter end would have cost The Guardian an estimated £5m – a disaster that would have compounded an already difficult financial situation.However, The Guardian got lucky, when the skirmish ended in a settlement. But to Rusbridger’s mind, the case just goes to show once again that British law is not at all so much about rehabilitating tarnished reputations, it’s about money. Big money. And that’s why publishers, scholars and scientists, civil rights activists and the PEN writers association are mobilising against libel law, which is supposed to protect people and companies against damage to their reputation. Even the United Nations has already come out with a harsh assessment that reads rather like a condemnation of dubious practices in a Third World country.

Burden of proof falls on defendants

The UN believes that UK libel law is becoming a serious threat to freedom of expression and freedom of the press – not only in England, but worldwide, because in principle just about any so-called libeller can be dragged into a British court. To wit, billionaires from the Middle East and Russian oligarchs bent on gagging their detractors show a marked preference for British courts. Iceland’s Kaupthing-Bank took umbrage in 2007 at a disparaging write-up in a Danish paper – and filed suit in London. One Ukrainian hauled his compatriot before an English judge to refute statements – in Ukrainian – on the latter’s Ukrainian website.

Generally speaking, a publisher can be sued in the British capital even if only a handful of copies of the irksome periodical are sold in the UK or if the website with the contentious article has been accessed a dozen times from there. So UK justice secretary Jack Straw has announced he’ll be setting up a task force to propose reforms to what he calls the “chilling” libel laws, some of which are over a century old. MPs have been incensed ever since Carter-Ruck not only threatened to sue The Guardian on behalf of a Big Oil client to suppress a planned article about toxic waste, but actually sought to restrain the paper from covering the parliamentary debate about the case. Libel law in Britain, unlike the rest of the democratic world, gives the plaintiff the benefit of the doubt: the defendant is guilty until proven innocent. Even if the latter wins the suit (which rarely occurs), he still has to defray his own – often hefty – legal expenses.

US blocks UK libel judgments

Consequently, many publishers have got to ask themselves whether they can actually afford to defend their journalists in court – which is why the vast majority of such cases never get their day in court. To play it financially safe, many a paper opts for a settlement, even if that is apt to put a dent in their credibility. Or they simply refrain in future from investigating sensitive subjects like terrorism or corruption. “The disproportionate costs have become a threat to investigative journalism,” says Counsel Hooper – especially in the current crunch, with many newspapers compelled to cut costs as it is. And yet the financial crisis has also made painfully clear how crucial critical oversight really is.

The US media are particularly put upon by the British system. American courts allow the press to make mistakes as long as they have exercised due diligence and shown no harmful intent. But London can make them pay dearly for such inadvertent slip-ups. California is now the fourth US state to pass legislation rendering claims under foreign libel suits unenforceable. And a federal law to the same effect is now forthcoming in Washington DC – a remarkable development for such closely allied nations. In November, to protest British libel laws, some major US dailies like The New York Times and Boston Globe even threatened to discontinue distribution of their papers to Great Britain and block access to their online editions.