Media lawyers representing the press have called for a reform of how judges interpret the 'Reynolds defence' of responsible journalism in libel claims.
Giving evidence to the culture, media and sport select committee this morning, Media Lawyers Association chairman Marcus Partington said news organisations were reluctant to use the libel defence, which is available if journalists can prove they were acting responsibly and in the public interest.
The Reynolds defence was established by the Sunday Times in a 1999 libel case against the former Irish prime minister Albert Reynolds. The paper successfully argued that it had a duty to publish the allegations in the story and steps were taken to verify it.
Newcastle-under-Lyme Labour MP Paul Farrelly said: "The so-called Reynolds defence at one stage seemed like a godsend for responsible journalists but doesn't appear to have worked out that way."
Keith Mathieson from Reynolds Porter Chamberlain said the defence was being applied too strictly - and libel judges needed to be more "forgiving" when considering whether journalists acted responsibly.
"The media will always make mistakes. That is one of the byproducts of having a free society," he told MPs.
"Journalism - like most fields of human activity - its practitioners are imperfect and it's often not terribly easy to get information, whether it's from private or public sources.
"We've often found that when we're pursuing Reynolds defences we come across one email which suggests maybe [the reporter] shouldn't have done it that way.
"And we know that will be blown out of all proportion by the other side who will regard it as a gift to their case."
Mathieson added: "It shifts the emphasis of the case from the truth - or otherwise - of the allegations to the conduct of the journalists.
"In a sense I think claimants are quite content to allow that shift of emphasis to take place."
Marcus Partington, Trinity Mirror's legal adviser, added: "Unless you feel that you've passed through each of the tests without fear of being attacked by the other side, you're wary about using the defence."
No opportunity to respond
Mark Thomson, from law firm Carter-Ruck, said it was now rare for tabloid newspapers to contact the subject of a story before publication for fear of being hit with an injunction - making the defence of "responsible journalism" impossible.
"A lot of these claims are brought because press standards in my view have dropped in the last 15 years," he told MPs.
He later added: "As a policy they don't notify. Victims - whether it's a celebrities or anyone else, they aren't told in advance. The damage is done, sometimes permanently.
"It's a real issue. Whether parliament should intervene or whether the regulators should put it in their code, something should happen. Lives are being affected by this."
The Commons media select committee is carrying out a wide-ranging investigation into press standards – including the effectiveness of self-regulation and the state of libel laws in England and Wales.
Earlier today, the Ministry of Justice published a consultation paper on curbing libel costs – which have escalated in recent years under no win, no fee rules which allow claimant lawyers to double the fees charged to publishers if they win.
Partington told MPs that there needed to be a "complete change of approach" to the way in which costs are agreed.
"Even arguing about the costs, you're potentially spending £1,000 an hour," he told the committee.
"The cost judges are on record saying to the Ministry of Justice that their job is not to control costs.
"There needs to be a greater control by the court system of the charges that solicitors incur and therefore seek recovery of. Lawyers will try and get away with what they can get away with."
He added: "It seems completely wrong that a system should be exploited by rich people and their lawyers."
Tony Jaffa, a partner at Foot Anstey solicitors, described the fees charged by claimant libel firms working on a CFAs as "phenomenal".
"We are in a particularly weak position," Jaffa said.
'Crippling the regional press'
"The high hourly rates - for someone who's based out of London, I can only dream of those riches. We can make an honest living by charging the rates that we charge.
"The claimants' lawyers in my eyes are earning a phenomenal amount of money and that is a structural problem."
He added: "Our job has turned from advising our clients on matters of law to advising them on money. We spend collectively more time than ever before just telling them what the financial implications are.
"Every regional newspaper is solely concerned with the finances - never mind the merits. That's the harsh reality of it. The success fee element of a CFA is crippling the regional press."
Mathieson from Reynolds Porter Chamberlain added: "The client in a CFA has no interest in controlling the amount that his solicitor is charging.
"We see these cases in which solicitors are charging £550 an hour because the client is never going to have to pay that.
"If you were to say to a client, I charge £650 an hour, the client is going to say I'm sorry that's far too expensive. On A CFA they're not going to say that."
Philip Davies, the Conservative MP for Shipley, described the fees charged by lawyers under a CFA as "exorbitant", "extortionate" and "a tremendous racket"".
He asked Thomson from Carter-Ruck whether lawyers deliberately prolonged proceedings to make more money.
"Most cases settle very quickly," Thomson replied. "We're all frankly too busy to drag on a case. It's not worth it."