25/06/2013 12:45 BST | Updated 25/08/2013 06:12 BST

The New Defamation Act: Game-Changer or Red Herring?

Recently, a sensationalistic news story about a Saudi Prince threatening to sue Forbes for an allegedly defamatory article within its annual Billionaires' List got tongues wagging. It's just the sort of international tale of caricature-esque hubris that newspapers and magazines swoon over. And, from a legal standpoint, the monarch's decision to sue in the UK -- monolithically referred to as 'the libel capital of the world' -- was contentious as well, especially in light of the new Defamation Act.

Historically, the courts have awarded high damages in libel and the UK has been seen as claimant-friendly. Since the News International phone hacking scandal and concomitant Leveson report, press standards, libel and breach of privacy have been under heavy scrutiny. Consequentially, the passage of the Defamation Act 2013 on 25 April was viewed as a victory for libel reform.

The act (which goes into effect later this year) was fuelled by cries for reform of defamation defences for journalists, publishers and Internet Service Providers (ISPs) like Google and Facebook, rules regarding repetition of defamatory content through online re-publishing, and for mechanisms to prevent so-called 'libel tourism' or 'forum shopping', amongst other areas.

The Defamation Act attempts to curb the latter -- foreign nationals outside of the EU like the Saudi Prince, exporting their libel cases to the UK -- by asking the court to determine whether Britain is the most appropriate jurisdiction in which to bring the action. A Forbes representative told the press that the prince's suit was 'precisely the kind of libel tourism that the UK's recently-passed libel reform law is intended to thwart'. But, in practice, will the act really make a difference?

Ashley Hurst, partner at international law firm Olswang in London -- a rising star in the media law world -- sees the new statute's forum shopping restraints as having an impact, albeit a minor one.

"It's certainly going to be harder for foreign nationals outside of the EU to sue in the UK," he says. "But most cases of forum shopping are already stopped at an early stage anyway so this will not be a dramatic change in practice". The notion that Britain is rife with libel claims from the four corners of the earth has been a bit of a media exaggeration as Hurst and his legal world peers (like media lawyer/scribe Paul Tweed) see it.

A specialist in internet law, Hurst explains: "The internet has allowed claimants to forum shop more easily, provided there is damage in the jurisdiction that they want to sue in."

The web's ubiquity and unbridled expansion has also given rise to another salient consideration in media law: the often murky differentiation between publishers (in the traditional Guardian, Times, Forbes sense) and the multi-platform giants whose tentacles reach into the realms of social media, product sales, user generated content, search and publishing (internet intermediaries like Amazon, Google, Yahoo! and Facebook).

Yahoo! and Google aggregate news -- effectively competing with traditional newspapers -- but they're also service providers, and as such have been offered a new defence under the act (which their legacy media publisher competitors haven't been granted).

This has been touted by bloggers and the media as a 'victory for ISPs'. It gives companies like Facebook a defamation defence -- unless the offending poster cannot be identified (ergo anonymous), or if the claimant can show that the website operator was notified of a defamatory posting and failed to comply with a procedure (still being drafted by the Ministry of Justice).

Hurst sees the defence as "a big red herring" with limited use in practice, "other than in circumstances where the poster of the statement is happy to waive his anonymity and be sued" (an unlikely scenario).

The reality is, most internet companies simply don't have the time or resources to investigate the validity of each and every disputed posting so they often opt for this quick and painless solution: 'take it down'.

"On a daily basis, I would estimate that hundreds of articles and postings are being taken down from the internet on legal grounds when in reality they are probably perfectly legal," explains Hurst, adding that the practice creates "a potentially massive chilling effect on freedom of expression".

At the moment, the legal process for such new online media is oddly enough governed by an age-old hard copy bureaucratic system, so putting the new defence into action may be costly and time-consuming for those who choose to use it. Making a simple court application to contest jurisdiction or strike out a baseless claim can take "the best part of a day", and involves a detailed knowledge of court procedures and "not insignificant legal costs" .

"There needs to be some kind of electronic system to speed up this process," Hurst urges, admitting that this could open up a can of worms as to why other areas of the law shouldn't also benefit from a more streamlined electronic procedure. He adds: "There's not been enough weight and impetus behind such reforms so far and the courts' attempts to use electronic filing have failed."

Despite the fact that Google's revenue hit $50 billion last year and the brand became a verb years ago, it does seem strange that neither Leveson nor the Defamation Act 2013 have deeply scrutinised libel laws and procedures vis-a-vis ISPs. Hurst attributes it to a public awareness of only a small smattering of high-profile online defamation lawsuits like the Lord McAlpine/Sally Bercow case concerning Twitter; whereas the lion's share of cases relate to what might be deemed "trivial stuff about restaurants, hotels and small companies -- which may sound trivial in isolation but are significant en masse".

Yet, in our online-centric world, the trivial can have deep ramifications. Everything we put out there is potentially damaging -- because it is 'forever'. This harsh reality has daunted newspapers, like The Times, who have been fearful of defamation cases arising from content in their archives -- until now. The Defamation Act's 'single publication rule' limits a claimant to bringing only one action against a defendant when the defamatory statement is repeated (via for instance blogging and tweeting).

As game-changing as that might sound, in reality, this rule is unlikely to affect much: "Its main impact will be to give publishers who run archives a bit of comfort that they're not going to be sued over material from several years ago."

Hurst foresees lawyers challenging the single publication rule in instances where the content is anonymous or where greater prominence is given to material several years later. For example, a journalist seeking out very specific information might discover a dusty old low-profile posting and bring it to life via a tweet or blog posting -- causing reputation damage in the present.

In the end -- as Hurst has systematically reveals that the new Defamation Act may in fact have 'no clothes', so to speak -- one wonders what all the fuss has been about and if it will have an impact beyond the mere symbolic.

The lawyer acquiesces on one point: "The requirement for a company to show substantial financial harm [in order to bring a claim for defamation] is probably the most significant part of the Act". He predicts that "if companies try to sue for libel, defendants will probably run that defence more than they used to," which will almost certainly dissuade corporates from pursuing their claims.

This could be bad news for #26 on Forbes' Billionaires List, or should I more cautiously say the 'alleged #26'?