The Defamation Bill is nearly law. Several key reforms needed to protect free debate are already included in the Bill, thanks to the tireless work of the Libel Reform Campaign (declaration: I have acted as an adviser to the campaign), the heroic defence of free speech by individuals in the face of financial ruin, and Parliamentarians from both Houses, with Lib Dems leading the charge.

At the very last, however, a Tory attempt to scupper one of the most important provisions that was included in the bill needs to be defeated if the ensuing Act is to achieve its aim of substantially reducing the chill of libel from our national discourse. If Liberal Democrats are to deliver their manifesto pledge on libel reform in full (see later), there remains much work to be done.

Before the last election, Labour and the Conservatives both followed the Liberal Democrats in committing to reforming the illiberal libel laws that had resulted in writers, scientists, bloggers and many others silenced by being sued (or simply threatened with being sued) for doing nothing more than speaking out and criticising another party.

The draft Defamation Bill that emerged from this cross-party consensus was far from perfect, but sterling work by Julian Huppert and others on the Joint Parliamentary Scrutiny Committee has succeeded in considerably improving the Bill as presented to the Commons on Tuesday.

Beneath the consensus, however, a rift had emerged, as Julian wrote here on LDV. The Tories resisted proposals preventing corporations from suing for libel, and sought to remove the relevant clause. The clause had been inserted as an amendment (from Labour) in the Upper House, leaving the Government with a three-way-choice: accept the Lords amendment, (by opposing Sir Edward Garnier’s motion to reject it), reject it outright by taking over the Garnier motion to disagree, or reject it as currently worded but revisit the issue in the Lords. It was the last that happened. This procedural quirk is vital in explaining how our party voted.

Many campaigners and party activists have expressed grave disappointment that Liberal Democrats voted with the Government, as whipped, in favour of the Government/Garnier motion to reject the Lords amendments on corporations and other ‘non-natural persons.’ The vote hides the fact that Liberal Democrats worked furiously behind the scenes to get the government to concede on the issue of corporations – which they did (see below), although critics such as the leading legal blogger David Allen Green, until recently a party member, still chose to see the vote as a betrayal of an explicit manifesto commitment to make it harder for companies to sue.

Let us be clear. The Liberal Democrats believe, as stated in party policy and as summarised in our 2010 election manifesto, that corporations should have to demonstrate substantial financial loss before suing for libel – reputational harm alone is not enough. Let us also not forget that Lib Dems cannot pass every law we want, being in a Coalition with a party that often and vehemently disagrees with us. We know only too well that we cannot deliver every manifesto commitment in full. This is not an excuse for our MPs to throw our hands in the air and support everything the Tories suggest – it is reality. It is equally true that because our manifesto clearly said we’d curb companies’ ability to sue for libel, and the Coalition Agreement says nothing to the contrary, many more (non-Ministerial) Lib Dem MPs could and should have joined Tim Farron, John Leech, Greg Mullholland and Adrian Sanders (with John Hemming and Julian Huppert abstaining) in “rebelling” by voting to uphold party policy. But with the payroll guaranteed, the Lords amendment would still have fallen.

So, what does the Justice Minister Helen Grant’s concession that the Lords will revisit the corporations clause actually mean? How can we secure limits to companies’ right to sue? And what implications for how Lib Dem MPs deal with equally contentious issues that are in tension with party policy such as the impending vote on the Communications Data Bill?

Briefly: the government made it clear that it rejected the statutory extension of the Derbyshire principle (which prevents public bodies from suing for libel) to all those performing public functions. They also made clear they opposed an early “permission hearing” for companies to sue. Hence Grant’s concession was to revisit only the element requiring corporations to show financial loss. So any new amendment brought before the House of Lords will only deal with this issue – disappointing.

I’ll come back to the issue of how our MPs vote on matters such as this in another post.

As for what we can do now – call, fax, email, send carrier pigeons, whatever it takes to get the message through to Liberal Democrat Peers: any Defamation Act must restrict corporations ability to sue. This means not only backing an Government amendments requiring companies to show financial loss before being able to sue, but also any cross-bench/Labour amendments such as these drafted by the Libel Reform Campaign

Arguably the biggest chill on free speech comes from companies exploiting the inequality of arms their financial muscle brings to silence any critical commentary. The whole aim of the libel reform movement was to reduce the chill – to restore confidence that we can investigate, discuss and criticise free from fear of being dragged through court. However protracted the process, however tortured Lib Dem supporters feel about votes along the way and no matter the legislative details of how it is achieved, we must see limits applied to corporations suing for libel – all the procedural ins and outs don’t matter if the Act achieves its aim, but it just won’t do if it doesn’t.

* Prateek Buch is Director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee