A recent decision of the High Court in England has seen the debate around whether public or governmental bodies can sue for defamation (or libel in English law) take a further step forward. The case concerned Salford University, which raised defamation proceedings against a former lecturer who was dismissed in 2009 for bringing the university into disrepute. The case came before the High Court on appeal from Manchester District Registry after it rejected an application by the defendant to have the claim struck out on the basis that there was no reasonable prospect of success and/or that the claim was an abuse of process. One of the key arguments before the court was whether the University could sue for defamation.

It was argued that the University could not sue for defamation because of the House of Lords' decision in Derbyshire County Council v Times Newspapers [1993] AC 534 in which it was held that a local authority had no right at common law to sue for libel to protect its governing or administrative reputation, because allowing it such a right would stifle pubic opinion and be contrary to the public interest. Salford's former lecturer argued that the Derbyshire decision applied to the University in that it was a public or governmental body providing higher education on behalf of central government.

The High Court distinguished universities from public and other governmental bodies: the fact that universities are in receipt of large sums of public money and are in many respects regulated by statute were not factors which of themselves led to universities being equated with central or local government for the purposes of the law of defamation. This ruling will be of interest to institutions of a similar nature to universities as it suggests that the restriction on bringing defamation claims only applies to central and local government.

The claim was ultimately struck out, however, on the basis that it was an abuse of process. The key question before the Court in that respect was whether the words complained of were actually directed at the University itself. Mr Justice Eady noted that: "From time to time, it has been emphasised how important it is for the court to be wary, in cases where a corporate entity is suing for libel, to ensure that it is not being 'put up' or used as a protective shield when the real gravamen of the defamatory words is to reflect upon the reputation of an individual or individuals."

The Court found that any adverse comments made about the University itself were incidental to the alleged defamatory statements which were primarily about two individuals: the Vice-Chancellor and Deputy Vice-Chancellor of Salford University. The appeal was therefore allowed on the basis that any claim for defamation should have been brought by the individuals allegedly libelled rather than the University.

While the University was unsuccessful, the decision does support the view that universities may bring actions for defamation as long as it is the university itself which has been defamed and not only individual employees of the university.

Notwithstanding the Salford decision, the position for local authorities at common law remains governed by the Derbyshire decision. Whether that common law position - that local authorities may not sue for defamation - has changed in England has been the focus of recent discussion around the Localism Act 2011 ("the 2011 Act"). The 2011 Act gives local authorities "...power to do anything that individuals generally may do". The question of whether this allows scope for overturning the Derbyshire decision was raised following a report that Rutland Council intended to raise defamation claims against three of its own councillors using powers under section 1 of the 2011 Act.

The issue was addressed during a debate on the Defamation Bill currently going through Westminster in which Lord McNally attempted to reassure Parliament that the courts would uphold the Derbyshire principle. He affirmed that it would be "contrary to the public interest for organs of government to be able to sue in defamation, and that it would be an undesirable fetter on freedom of speech". This is, perhaps, not altogether unsurprising, as the general power that is referred to above is intended to enable local authorities to better discharge their functions in compliance with the statutory duty of best value. It was not intended as a means of holding local authorities free from criticism, justified or otherwise.

There does still appear to be a general consensus that the restriction on local authorities pursuing actions for defamation should remain, presumably because local authorities should be seen to be open to criticism and accountable for their actions.