Australia’s states and territories are on the brink of achieving the holy grail of law reform: uniform defamation laws. But Attorney General Philip Ruddock says he may still override the states if he doesn’t think their model is ‘in the national interest’. The right of corporations to sue for defamation has proven to be a sticking point in the debate.
For the past three decades state and territory attorneys general have talked about enacting uniform defamation laws, and for the past three decades those talks have failed. In 2003, federal Attorney General Philip Ruddock threatened to use commonwealth powers to impose his own national defamation code if the states and territories did not act immediately to harmonise their existing laws.
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At the next meeting of the Standing Committee of Attorneys General (SCAG) the states finally put aside their differences and came up with a model that they all agreed on.
The states and territories now aim to enact mutually agreed uniform laws by January next year. South Australia has already passed the legislation, and a spokesman for NSW Attorney General Bob Debus says the rest of the states are on track for the January deadline.
In a letter to Bob Debus in May, Ruddock wrote that he would not stand in the way of the states going ahead and implementing their own law in their own timeframe. But he also said that the Federal Government would revisit the possibility of a commonwealth law after 1 January, ‘and will pursue that option if, in the light of the laws actually enacted, commonwealth law would appear to be in the national interest.’
‘The option of a commonwealth law remains a very real prospect’ says Ruddock’s spokesperson. ‘It’s very likely that the Attorney General will act in the national interest at that time.’
The state and federal attorneys general do not see eye to eye on a number of issues. When Ruddock’s plan for a national code was released as a discussion paper in March last year, it included a number of controversial provisions.
Some elements of the proposal were strongly criticised by both the media and the states, such as an attempt to allow for defamation of the dead and a move to narrow the ‘fair comment’ defence. Others, such as a proposal for court-ordered corrections, and ‘mirror legislation’ to ensure ongoing uniformity, received support in some quarters but were opposed by the states. A proposal to impose a one-year limit (after publication) on launching a defamation action was well received across the board.
When the states released their own draft bill last November, Ruddock was cautiously positive, but raised a number of objections, including the lack of court-ordered corrections, the removal of privacy protections, and restrictions on corporate defamation. He later added uniformity on the use of juries and the need for ‘mirror legislation’ to his list of sticking points.
Recently, Ruddock has said he’ll accept the states’ position on truth as a stand-alone defence, defamation of the dead, survival of actions and the cap on damages. ‘In the interests of moving forward he gave way on a number of issues that were very close to his heart’ says his spokesperson. But Ruddock is not prepared to concede every point; in particular, the right of corporations to sue for defamation.
Bob Debus argued in a passionate speech in parliament in May that there was no need to allow large corporations to sue for defamation, as they have no personal reputation to protect. ‘The commercial reputations they enjoy are largely the product of advertising campaigns,’ he said, arguing that the Trade Practices Act and the tort of injurious falsehood provided ample protection for corporations.
Ruddock’s spokesperson says that the states have not put forward a rational argument against corporations’ right to sue: ‘apart from this anti-business rationale that businesses can stick up for themselves.’
Until this year all corporations had a cause of action for defamation in every state except for NSW. As part of the plan for uniform laws, the other states have decided to adopt the NSW model, which allows small businesses those with fewer than ten employees to sue.
In a compromise that has largely passed unnoticed, the states and territories have stepped back from their initial position on this issue. The original draft bill excluded all corporations apart from non-profit groups from launching defamation actions. Bruce Donald, a Sydney lawyer and legal advisor to Four Corners on programs like The Moonlight State and Bondy’s Bounty describes the states’ decision to adopt the NSW model as ‘a silly political compromise’.
Meanwhile, Ruddock has indicated he is prepared to concede on this point if the definition of ‘small’ is changed to incorporate companies with an operating revenue of less than $10 million, and with fewer than fifty employees.
Fairfax lawyer Mark Polden says this is far too big. ‘If the company goes broke the owners don’t lose the shirt off their back. They’re not putting their own assets on the line why should they get a free kick on a law designed for individuals? Why should an artificial entity be given those advantages?’ he asks.
The Business Council of Australia (BCA), on the other hand, argues that even Ruddock’s concession goes too far. Steven Munchenberg, who is the BCA’s general manager of government and regulatory affairs, disagrees with the argument that large corporations have ‘deep pockets’, enabling them to protect their reputations without recourse to the courts. ‘The problem with that is that ultimately the money belongs to shareholders,’ he says. ‘If someone makes spurious claims about your products, why should the company be forced to use shareholder’s assets to defend that?’
Both Ruddock and the BCA argue that corporations rarely sue for defamation, and that this proves they are not abusing the law.
‘With the greatest respect to Mr Ruddock I don’t know where they’re getting that from,’ says Mark Polden. ‘They don’t sit in my office and read the warning-off letters.’
While most cases don’t end up in court, the tactic of sending letters threatening to commence action is often successful in getting critical stories watered down or pulled before they are published.
Polden says that the NSW reform prohibiting larger corporations from suing has made a big difference: ‘you can be more confident at the moment advising on financial stories because there is a larger degree of certainty.’ However, most media groups publish nationally, and will still be able to be sued by corporations in other states until uniform laws are introduced.
Which is exactly what will happen unless Ruddock decides to intervene. In the meantime, groups such as the BCA will be exploring their options: ‘We’ll continue to lobby both the states and the Federal Government. If we’re not able to persuade the states then we’ll look to the Federal Government,’ says Munchenberg.