Libel law review over McDonald's ruling

The government is to review the libel laws after two penniless environmental campaigners who were sued by McDonald's, the global burger chain, yesterday won a ruling at the European court of human rights that their rights to a fair trial and freedom of expression were violated when they were denied legal aid.

The libel battle pitted Helen Steel, a part-time barmaid earning £65 a week, and David Morris, a single parent on income support, against an expert legal team headed by a £2,000-a-day libel QC in a 313-day trial, the longest in English legal history.

Their victory in Strasbourg, hailed by their QC, Keir Starmer, as a "turning point" in the law of libel, will force the government to take steps to redress the balance between rich and poor in defamation cases.

Mr Starmer said: "Until now, only the rich and famous have been able to defend themselves against libel writs. Now ordinary people can participate much more effectively in public debate without the fear that they will be bankrupted for doing so. This case is a milestone for free speech."

The Strasbourg court awarded damages of £13,750 to Ms Steel and £10,300 to Mr Morris.

Apart from paying the damages, the government will have to open the legal aid purse strings to impecunious defendants sued by multinational corporations or wealthy individuals in complex cases.

At present, defamation is excluded from the scope of legal aid. Funding can be granted in exceptional cases, but the conditions are so tight that only one defamation case has been funded in the five years since the law was amended.

The unanimous ruling from Strasbourg will also prompt a re-examination of the libel laws, which many believe are too technical and complex and too heavily weighted in favour of claimants.

A spokeswoman for the Department for Constitutional Affairs said the government would be looking at the libel laws generally "in the context of this judgment".

The judgment could also exert a downward pressure on libel awards, obliging judges to consider for the first time the defendant's means in fixing damages.

The world's biggest fast-food chain spent an estimated £10m on the case, which involved 28 pre-trial applications; the pair had to represent themselves with sporadic free help from friendly lawyers and £40,000 raised from supporters to help cover expenses such as transcripts and photocopying.

McDonald's sued Ms Steel and Mr Morris, both from north London, in 1990 over leaflets headed What's Wrong With McDonald's?, which they distributed outside the burger chain's restaurants

These accused the chain of exploiting children, cruelty to animals, destroying the rainforest, paying low wages and peddling unhealthy food.

The human rights court in Strasbourg ruled that the "inequality of arms" between the two meant they were denied a fair trial and there was a "chilling effect" on their freedom of expression

The size of the damages awarded against them - £60,000 by the high court, reduced to £40,000 by the court of appeal - also had a disproportionate effect on their right of free speech, the judges said.

Mr Starmer had told the Strasbourg court that "without legal assistance, the [defence] case was underprepared, unready for trial and was advanced by two inexperienced, untrained and exhausted individuals who were pushed to their physical and mental limits. In short, it was patently unfair."

Despite the obstacles, the two campaigners won a ruling from the high court that some of the claims in the leaflet were true, in what was described as "the biggest corporate PR disaster in history". Mr Justice Bell ruled that the leaflet was correct when it accused the company of paying low wages to its workers, being responsible for cruelty to some of the animals used in its food products, and exploiting children in advertising campaigns.

McDonald's said the leaflet related to practices in the 1980s and the world and the company had "moved on" since then.

Mark Stephens, the campaigners' solicitor, said: "McDonald's had virtually bottomless pockets to finance the case and Mr Morris and Ms Steel certainly did not. This was a serious unfairness which the human rights judges have now recognised."

Roger Smith, director of the law reform group Justice, said: "This is a wonderful victory for the sheer perseverance of two litigants who have just stuck to the task and insisted upon justice.

"It's also a recognition of legal aid as a basic human right which should be available in all types of cases where it is absolutely necessary."