The Defamation Bill should allow a charity to bring a defamation case, if it can prove it has suffered serious reputational damage, not just substantial financial damage, according to Baroness Young of Hornsey.

Justice minister Lord McNally announced the government’s plans to review the law on defamation to protect freedom of speech and freedom of expression last week.

The Bill contains a clause which prevents a corporate claimant bringing a defamation case unless it can prove that it has suffered, or is likely to suffer, financial loss.

However, Baroness Young said in the second reading of the draft Bill last week, that an exception should be made for the voluntary sector, for which serious damage to reputation could be considered equal to substantial financial loss.  

“It is noteworthy that, in contrast to the position in other jurisdictions, no exception is made for small corporations or non-trading corporations,” she said.

“This could have an adverse impact on arts and voluntary sector organisations, for some of which reputational damage is considered to be a substantial risk on a par with financial loss.

“It could be argued that the reputation of such bodies is being treated as nothing more than a financial matter when in fact it is a considerable part of their cultural and social capital.”

The Ministry of Justice will publish the draft Defamation Bill for consultation in the new year, with a view to introducing a Bill in the next parliamentary session.