Private firms providing public services should be banned from suing their critics, campaigners have urged.

A whole new breed of companies and arm's-length bodies has emerged over the last decade, doing jobs previously left to the NHS, Department of Work and Pensions or councils.

However, unlike their public-sector predecessors, these businesses have the right to sue for defamation, having a chilling effect on those in the media and beyond who wish to hold them to account.

Now campaigners at English Pen, the branch of the international writers' organisation south of the Border, have called on Scotland to close this loophole as the country moves to reform its defamation laws.

English Pen led the campaign for libel reform in England. It succeeded in persuading the old UK coalition government to introduce a rule of "serious harm" that ended frivolous attacks on free speech south of the border - but not, crucially in Scotland and Northern Ireland.

The Herald, Scottish Pen and scores of Scottish writers are now campaigning for Scotland to follow English and Wales.

HeraldScotland:

 

Background: Why The Herald is campaigning for defamation reform.

But English Pen believes the Scottish Parliament could go even further and strip corporations and a new breed of public-private hybrid organisations of the right to sue.

Robert Sharp, the organisation's head of campaigns, said: "Private companies contracted to deliver public services can sue when their performance is criticised, even though case law says that government itself cannot sue.

"With more and more public services being delivered by private companies, the space for people to criticise how public money is spent becomes smaller and smaller.

Writing in The Herald,  he added: "Unfortunately, when this problem was debated in the House of Commons, MPs failed to deal with it.

"In fact, Conservative ministers went out of their way to ensure that amendments to fix the problem were removed from the Bill.

"So this is one area of the defamation law where MSPs could act decisively where Westminster MPs failed."

HeraldScotland:

Scotland has not gone down the road of privatisation quite as far as England, but some key UK-wide services are provided by the private sector, such as disability assessments.

In 2011 the company Atos sent threatening letters to websites that hosted blogs critical of its work in this sphere.

Mass housing stock transfers have seen housing associations, which can sue, take over tens of thousands of homes from councils, which can't. Last year an English housing association tried to sue Channel 4 for naming its chief executive in a programme that also featured rogue landlords. This action failed - because it did not meet the new English test of "substantial harm". There is no such test in Scotland.

The Scottish Law Commission is already reviewing legislation amid concerns that the country had fallen behind changes in England and Wales that make it harder for the rich and powerful to sue their critics.

Chairman Lord Pentland "welcomed the interest and support" for change from The Herald and Scottish Pen.

The Scottish Government has also sounded positive about reform.

A spokeswoman said: "We look forward to the outcome of the Scottish Law Commission’s consideration of defamation law reform and we will consider fully the terms of any report produced on this important issue.

"We will continue to engage with a range of stakeholders to inform the Scottish Government’s position on any potential reform of defamation law."