Proposals to make defamation claims subject to a statutory threshold test of serious harm in relation to financial loss have been challenged by the Law Society of Scotland in its response to a Scottish Government consultation.

Ministers asked for views on six key recommendations of the Scottish Law Commission in its recent report on defamation and accompanying draft bill, before introducing legislation on the subject.

In response the Society believes that evidence of vexatious litigation should be produced if a "serious harm" test is to be introduced in line with a recent reform in England & Wales, "as we are not aware that there is currently a problem in Scotland". The Society would favour restating the common law test for defamation in statute, in order to achieve a proper codification of the law, stating that there is a balance to be found between the right of freedom of expression, as found in article 10 of the European Convention on Human Rights, and the right of protection of individual reputation. "A pragmatic approach around the deployment of existing court procedures to deter vexatious claims may be the most appropriate response", the response states.

John Paul Sheridan, convener of the Society’s Obligations Law Subcommittee, commented: "From an access to justice perspective, we are concerned that introducing a statutory threshold could deter legitimate claims. There may also be practical challenges around preliminary hearings to assess whether significant harm has occurred."

On the question whether trading businesses should be able to raise actions in defamation, the Society also urges caution on imitating developments in other countries such as Australia, which has limited the rights of profit-making bodies in defamation actions.

Mr Sheridan explained: "We know that many profit-making businesses are small to medium sized enterprises and that defamatory statements could generate significant economic harm and reputational damage. However, in the case of non-financial loss to legal persons we recognise that introducing a serious harm threshold could help protect freedom of expression and mitigate against the potential chilling effect which might result from a well-resourced legal person threatening legal action."

The response further suggests that the availability of legal aid could be a means to address inequality if an individual is sued by a large business.

On other points raised, the Society highlights the perceived lack of clarity around the definition of public authority, in relation to a statutory exclusion from being able to bring a defamation action, and regarding aspects of the drafting relating to the liability of secondary publishers. It also raises concerns regarding the scope of delegated powers under the draft bill, which could lead to insufficient parliamentary scrutiny of policy decisions on further exclusions and categories. 

Finally, it would prefer to see the current three year limitation period retained than to have it reduced to one year as in England. "We do maintain that there is an obligation on parties to litigation to mitigate any economic loss," the response states, "and it may be, with longer limitation periods, arguments could be advanced that a party had failed to do so in bringing an action late within a limitation period. We do not, though, see significant issues around delayed defamation actions in Scotland."

Click here to read the full response.