COMPANIES attempting to gag their critics should face restrictions when pursuing legal action, according to Scotland's main law reform group.

In a major new discussion paper, the Scottish Law Commission says it sees "advantages" in making it harder for profit-making bodies to sue for defamation.

However, the commission, a statutory body which advises the Scottish Government on new legislation, fell short of endorsing Australian-style rules that stops business reaching for libel lawyers altogether.

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HeraldScotland:

Background: Why The Herald is campaigning for defamation reform

The commission's 130-page paper was published amid growing clamour for Scotland to bring its antiquated defamation laws into the 21st century, not least to take account of the digital age.

England and Wales modernised their libel laws in 2013, introducing a test of "substantial harm" before individuals or corporations can sue for defamation, freeing up courts from international libel tourists using London to settle scores from around the world.

HeraldScotland:

The Herald – along with freedom of expression group Scottish PEN – has been campaigning for at least such effective reforms north of the border amid concerns that threats, including those from big business, are having a chilling effect on journalism.

The SLC has set out several radical potential reforms, including a substantial harm test, the prospect that the reputations of the dead could be protected in law and restrictions on business.

Read more: SLC's Lord Pentland writing on on defamation reform in The Herald

The paper said: "Our current thinking is that we do not wish to set Scotland apart as a jurisdiction in which bodies existing primarily to make a profit are not entitled to make a profit.

"Nevertheless we can see advantages in imposing additional restrictions."

HeraldScotland:

 

This recommendation comes after several high-profile cases of major corporations trying to silence their critics with either legal action or even the threat of legal action. This included a bid by McDonald's to sue two London Greenpeace activists for a pamphlet they published on the firm. That "McLibel" case took two decades to resolve and ended with the UK Government being criticised in the European Court of Human Rights.

Business leaders are nervous about the proposals.

David Watt, of the Institute of Directors, said: "I think we would need to be very cautious about restricting the rights of businesses to defend their reputation.

"Companies employ people and defamatory information can hurt them and their employees.

"We have seen social media campaigners spreading untruths about firms, sometimes from their competitors.

"Of course, companies shouldn’t go after critics who tell the truth or make fair comments. But they should have the same rights as anyone else to challenge things that are made up or wrong."

Any potential move to protect the reputations of the dead will also be controversial.

Recent years, for example, have seen several public scandals involving allegations of sex abuse against the recently deceased who cannot speak in their own defence. However, sometimes these allegations have only emerged because alleged victims felt free to speak without fear or action.

HeraldScotland:

Paul Cullen, pictured above, the judge who as Lord Pentland chairs the SLC, called for feedback to a whole variety of proposals in his 130-page discussion paper.

He stressed that in an age of TripAdvisor, Facebook and Twitter, everybody could be affected by libel laws.

He said: "It is at the cutting edge of freedom of expression and protection of reputation; two important human rights. The law in this area must be in tune with the values of modern society."

Background: the defamation threat to Scotland's new media