Source: Ideas and Institutions Issue #28
Analysis
How Should We Think About Reforming Criminal Defamation?
The law on criminal defamation has been in the news recently. In addition to the suppression of political speech, criminal defamation can affect economic freedom. In India, criminal defamation has been used not only by politicians against each other and journalists but also by businesses against journalists, rivals, and media companies. The prevalence of using criminal defamation has led to calls for decriminalizing it, since one can also file civil suits for compensation and other relief from defamation. This essay examines the ideas that animate the debate on doing away with criminal defamation in the context of its widespread use in India. I provide some information about global practices in this regard and insights from the law and economics literature that examines the efficiency of defamation laws.
The question of doing away with criminal defamation is not merely about constitutionality. In any case, the Indian Supreme Court clearly held in 2016 that criminal defamation law is constitutional. The question is also about whether criminal defamation law is efficient in incentivizing free speech and deterring false speech.
The efficient functioning of the marketplaces of ideas and economic activity is premised on the notion of free flow of information. A system of laws that therefore hinders this free flow of information should make markets inefficient. From this perspective, the law on criminal defamation creates a “chilling effect” on the flow of information that market participants would require in order to make sound economic decisions.
On the other hand, individuals as well as businesses can suffer greatly from reputational harm if the right to free speech is misused to indulge in libel and slander. False speech is also anathema to the idea of free and fair deliberation in the civic and economic spheres. Defamation law in general creates guardrails for the exercise of free speech. The question for policymakers is whether criminal defamation overachieves this objective to instead deter the exercise of free speech.
The practice of using criminal defamation law
Take, for example, the U.S. research firm Hindenburg Group’s report on the Adani group of firms that led to a drastic fall in the group’s stock prices. Preparing such a report would have been far riskier for an Indian firm, given the presence of criminal defamation law in India. In the case of Indiabulls Real Estate Ltd. Vs. Veritas Investment Research (2019), a report published by analysts at Veritas led to the stock price of Indiabulls falling immediately after its publication. In this case, the Delhi High Court made observations against Indiabulls’ conduct following the report’s publication:
“While the remedies of Indiabulls against any report, which according to it may have contained incorrect or misleading facts, were always available to them, to threaten criminal action for publication of a research report was an extreme step. Defendant No.2, Mr. Nitin Mangal, a professional was forced to approach Courts repeatedly for anticipatory bail/bail in Gurgaon and Mumbai, and was also put to personal hardship. Such a reaction in the face of publications and articles written by researchers could have a “chilling effect‟ on publishing.”
In another example, the Adani group filed a criminal defamation suit in 2022 against journalist Ravi Nair for writing unfavorable articles about the group. Earlier, in 2017, a similar case was filed against journalist Paronjoy Guha Thakurta. Criminal defamation complaints have not been limited to journalists. In a 2019 judgement, the Indian Supreme Court refused to quash criminal defamation proceedings filed against Google in its capacity as an internet intermediary. The complaint was filed by Visakha Industries, an asbestos manufacturer, for Google’s refusal to take down an article posted on a Google group. In a different kind of use of the legal provision, the Shapoorji Pallonji group filed a criminal defamation complaint against R Venkataramanan, the former managing trustee of Tata Trusts. Similarly, Zee Media filed a criminal defamation case against the online news portal The Wire for causing the former serious reputational harm.
In each of these cases, the question is whether the law on criminal defamation, Sections 499 and 500 of the Indian Penal Code, are the optimal policy solutions for protecting reputational harm. This is especially so since, in addition to criminal defamation, individuals and businesses also use civil defamation law to claim damages for reputational harm. What purpose then does criminal defamation serve?
The existence of a law like criminal defamation seems anachronistic and at cross purposes with the ideal of promoting the free flow of information. Surprisingly, however, India is not an exception in this regard.
A 2017 report of the Organization for Security and Co-operation in Europe (OSCE) titled “Defamation and Insult Laws in the OSCE Region: A Comparative Study” identified forty-two of the fifty-seven OSCE countries that criminalize defamation (including Canada, Germany, Italy, and Turkey) in some form or the other. The report provides some interesting facts:
- Almost all Western European civil law countries have criminal defamation provisions.
- Nearly all countries that criminalize defamation within the OSCE provide for imprisonment as a possible punishment.
- Most of these countries provide for the possibility of imprisonment of up to two years. This is similar to Section 500 of the Indian Penal Code, 1860. Germany “punishes slander committed through the media with up to five years in prison. The Canadian Criminal Code foresees up to five years in prison for defamatory libel known to be false.”
Many members of the OSCE are economically developed, prosperous nations with well-functioning markets. It would seem that the presence and enforcement of criminal defamation law has not seriously impeded the economic and political development of these countries. Is it then true that the presence of criminal defamation has a “chilling effect” on speech so necessary for the free and fair exchange of ideas and information?
This in turn leads to two further questions. First, is the chilling effect on speech caused by criminal defamation a question of practice rather than prevalence? The OSCE report notes that the degree to which these laws are used in OSCE countries varies widely. Second, if policymakers are to think about limiting the use of criminal defamation law, what is the optimal policy design for the same?
The law and economics of defamation laws
In their paper “The Economics of Weaponized Defamation Lawsuits,” scholars David J. Acheson and A. Wohlschlegel examine the design of defamation law (civil, not criminal, defamation). They review law and economics literature on defamation law to examine whether it is economically efficient for the proposed reforms to liberalize defamation law in the United States and the UK.
Before reforms in these countries, defamation law was essentially “a strict liability tort: the defendant did not need to have acted with any degree of fault to be held liable.” The law would presume the statement’s falsity once the statement was proved to be defamatory, and its publication was presumed to be harmful to the relevant person. This changed in the United States after the case of New York Times Vs. Sullivan, which established that the defamed person had to prove that the statement was made “with knowledge that it was false or with reckless disregard of whether it was false or not.” The UK law has developed along similar lines but in a more limited way. Reforms in both countries have, however, eroded the presumption of harm and moved to a “fault” standard from a strict liability standard. India’s law on criminal defamation, to put it in context, requires an intention to harm or the knowledge that a publication will lead to reputational harm. This is a fault standard rather than a strict liability one.
The authors of the paper cite literature to show that in the general law and economics literature, a strict liability standard is considered optimal because it compels the actors to internalize the cost of publishing potentially defamatory content. Under a regime where fault needs to be proved, publishers would be protected from liability as long as they exercised the requisite level of care and diligence. This should, according to the literature, lead to over-publication of defamatory content.
However, according to the authors, two factors weigh against this analysis. First, courts do not resolve defamation disputes perfectly. The variation in outcomes creates uncertainty in the degree and extent of liability, even in a regime that follows the fault principle. Second, free speech has important positive externalities that publishers cannot capture. In a strict liability standard, they are expected to internalize the costs while being unable to internalize the benefits. This leads to over-deterrence of speech. The literature surveyed by the authors also focuses on the contrasting effects these two standards have on publishers’ incentives to verify potentially defamatory content. These incentives are, intuitively, much higher in a strict liability standard.
This leads the authors to a dilemma: “Reforms designed to ameliorate the law’s chilling effect on true speech will also decrease its deterrent effect on false speech. Conversely, reforms intended to prevent the flow of falsehoods will also prevent the publication of truths.”
In the context of criminal defamation then, there is an empirical question about trade-offs—are the benefits from liberalizing criminal defamation in India and the consequent decrease in deterrence against false speech worth the benefits of reducing the law’s chilling effect? This is both a normative as well as an economic question—normative, because this discussion relies on the presumption that the free exercise of speech is essential to Indian society, and economic, because the positive and negative externalities created by free speech are trade-offs that need to be considered for creating the optimal policy design.
This leaves us with the following questions:
- Is the threat of imprisonment for criminal defamation an over-deterrence against false speech, given that India already follows a “fault” standard rather than a strict liability standard?
- Would a criminal defamation provision without the threat of imprisonment be the most efficient deterrence against false speech? Should Section 500 of the Indian Penal Code also be included in the Jan Vishwas Bill, 2022?
- Would doing away with criminal defamation do too much for reducing deterrence for false speech?
- Is the law on civil defamation alone adequate for achieving the optimal balance between promoting speech and deterring false speech?
—By Anirudh Burman
Review
A Theory of Justice for Public Administration
The executive is by far the largest branch of the government. For most citizens, the executive branch amounts to the entire government because they interact with it much more than they do with the legislators and the judiciary. However, the attention that the executive branch has received from philosophers has not matched its salience. Since the rise of the welfare state, the space for discretionary administrative action has expanded dramatically, in ways that in many areas, reducing discretion might have negative effects on performance. While administrative law has emerged as one response to this phenomenon, it is not enough. Professional ethics probably matter more, as the culture of the civil service constrains and shapes the behavior of everyone from street-level bureaucrats to senior officials. However, since defining the public interest has traditionally been seen as the prerogative of elected officials, any discussion on ethical commitment of civil servants is faced with a challenge: how is the commitment to political neutrality of the civil servants to be reconciled with the fact that they exercise administrative discretion involving normative judgments? A recent book by Canadian philosopher Joseph Heath, The Machinery of Government: Public Administration and the Liberal State, makes an important contribution to this question.
Over the last two decades, Heath has produced several insightful works that take a “reconstructive” approach, in Jurgen Habermas’s sense of the term, to ethics—they try to understand and state the “norms and ideals that are implicit and play a structuring role in our practices” rather than offering prescriptions from outside the practices. So, in a book on business ethics, Heath linked the ethical demands that can be made from a business to the failures in the markets in which the business is operating. The book offers imperatives like—compete only on price and quality; avoid erecting entry barriers; do not seek protectionist measures; minimize negative externalities; treat price levels as exogenously determined; and so on. When compared with the more prescriptive approaches on business ethics, Heath’s approach may appear limiting, but it has the important advantage of linking ethical expectations to a proper understanding of the role of markets and how they work to enhance efficiency.
Heath brings a similar approach to this book on the administrative practices in the executive branch, starting with a careful statement of what the civil servants do in liberal democratic societies and going on to reconstructing an ethical framework from these practices.
Heath first explains the importance of professional ethics in public administration. He considers three models of accountability for the civil servants—hierarchical, popular, and vocational. In the hierarchical model, accountability “flows up the chain of command, and ultimately ends with the elected official who presides over a particular branch of government”. The popular model takes the reverse line and makes the civil service directly accountable to the public. The vocational model requires that civil servants be held accountable to an independent set of professional norms, which express, in some form, “the universal interest of the state.” Heath argues that the vocational model of public administration ethics is a response to the limitations of the other two models, which stem from the information impactedness of the civil servants’ work and the complex web of accountability relations they find themselves in, making it difficult for many of them to be supervised from above or below.
Heath argues that since civil servants anyway exercise considerable discretion, there is a need to consider if they can develop a self-standing conception of “good policy” without relying solely upon guidance from politicians. He describes the ideal arrangement as one in which “an experienced cadre of public officials, enjoying the substantial security of tenure, advances an independent conception of the public interest, but in a way that avoids taking positions on issues that are the legitimate objects of political contestation and disagreement, and is thus appropriately deferential to the will of elected officials.”
Placing the discussion in the context of legitimacy of the state, Heath presents a tripartite model of legitimacy, with each of the three branches making its own contribution to the overall legitimacy, animated by its own central principles. The legislative branch contributes democratic legitimacy with the central principle being the will of the majority. The executive branch contributes output legitimacy (i.e., effective solutions to collective action problems) with efficiency as the central principle. The judiciary contributes constitutional legitimacy with the rights of the citizen as the central principle. He writes, “Good policy emerges out of the productive tension that arises between all three branches.”
Since Heath suggests that civil servants need to have “a strong, independent conception of where their professional obligations lie,” an obvious question is: What should be decided by political contestations among parties and leaders, and what can be taken by the civil servants to underpin an independent conception of “good policy?” The key to the solution, Heath argues, lies in the principle of liberal neutrality, which generates a set of more specific normative commitments that, while not always politically neutral, have a strong claim to priority over the democratic principle.
Heath then provides a history of how liberal principles emerged, what their distinctive characteristics are, and how they evolved over time. He shows that liberalism has played a constitutive role in the emergence of the institutional arrangements that make up the state in liberal democratic societies. In these societies, liberalism is not just one political philosophy among others, as liberal principles are already embedded in the state institutions. So, civil servants being guided by liberal principles in their discretionary judgments is not likely to create problems in the way that following some other set of principles would. This analysis culminates in the characterization of modern liberalism as involving a commitment to the three basic principles of efficiency, equality, and liberty.
Building on the crucial work of John Rawls, Heath shows how modern liberalism has sought to achieve greater stability through a radical abstraction that has given us these modern liberal principles. In liberal democratic societies, they “cohere with the deep normative structure of the institutional arrangements that we by and large approve of, and usually take for granted.” So, they can serve as the normative basis for a conception of the public interest that the executive can advance without interfering with the prerogatives of the legislature. However, this liberalism construed institutionally is different from the specific conceptions of liberal justice. The latter propose specific principles or procedures for ordering or weighting these liberal principles (such as Rawls’ “difference principle”). As a result, they are in the realm of political ideology and should be clarified through the democratic process. Heath suggests that civil servants, while being committed to the basic principles, remain agnostic on the question of how they should be ordered.
Heath notes that despite disagreements over political ideology, liberal democratic societies have tended to drift toward assigning greater weight to efficiency than to liberty or equality, as seen in the development of the welfare state. He then shows how these three principles, especially the commitment to efficiency, guided the rise of the welfare state in the twentieth century. He advocates for the public economics model (welfare state arising out of the necessity to address market failures) over the egalitarian model (welfare state serving a redistributive purpose) and the communitarian model (welfare state taking provision of certain goods and services outside the realm of the markets for normative reasons). He further argues that it is primarily a focus on solving collective action problems in pursuit of Pareto efficiency that has enabled the rise of the welfare state. In offering this argument, Heath also makes important clarifications about the meaning of efficiency and how it should be seen as a moral principle, because Pareto efficiency is about choosing alternatives that make at least one person better off without making anyone worse off.
The last few chapters articulate certain normative commitments that have arisen within the executive branch in the modern welfare state. Heath discusses the administrative use of cost-benefit analysis (CBA) to show how it arises from the pursuit of efficiency, against a background commitment to equality and liberal neutrality. Heath shows that CBA arises out of a set of normative ideals that have developed endogenously within the civil service. He also argues that CBA does not reflect a commitment to full-blown utilitarianism and instead stems from far more minimal principles that transcend democratic contestation. He argues that the reason that a market-simulating procedure like CBA is an appropriate basis for decision-making is precisely because the welfare state has been trying to achieve the outcome that markets would have achieved had private contracting not been limited by various contingencies of the world.
As an interpretation of the idea of equal citizenship, Heath discusses “rule of law” values in the executive branch. He explains how equality is a far more controversial principle than efficiency because “its central role is to mediate distributive conflicts that have a win-lose structure”. So, political neutrality limits the extent to which the civil service can pursue notions of equality. But the expansion of administrative discretion has created the necessity for the civil service to develop a conception of equality to govern its relations with citizens, especially at the frontline. Heath suggests that the idea of the rule of law incorporates the most substantial notion of equality compatible with non-partisanship.
As an expression of the commitment to individual liberty, Heath discusses the anti-paternalism constraint in decision-making. He advocates for a general culture of deference to individual autonomy, but at the same time, he calls for addressing a broader dynamic within liberal societies that tends to increase the opportunities for self-destructive behavior among individuals (for example, usage of harmful drugs). Heath suggests criteria that can allow us to sort the “good” from the “bad” in these discussions.
A point of departure for Heath is that liberal democracies are not regimes of unrestricted popular sovereignty. So, the civil servants also have a duty to promote basic or minimal liberal principles. This would mean that the civil servants may sometimes serve as a counter-majoritarian check, and more often, they would work as a moderating influence on decision-making.
The depth and breadth of the treatment that Heath has given to this topic is commendable. By underlining the primacy of the efficiency principle and giving concrete examples of its applications, he makes the book directly useful for civil servants. Similarly, the discussion on the “rule of law culture” in civil service to promote a minimal version of the equality principle will also resonate. However, the discussion on liberty and paternalism is less clear and needs further work, especially in terms of providing decision criteria.
The book is meant to address questions of civil service ethics in the context of stable liberal democracies with a consensus on the basic liberal principles. In other words, this is civil service ethics for the “end of history.” The ethical challenges of civil servants in more challenging contexts such as transitional regimes, geographies where the state’s monopoly over violence has not been fully established, and states of exception, also need to be considered through the lens of professional ethics, lest all actions be explained away by stating, to paraphrase Cromwell, “Necessity knows no ethics.”
Further, while Heath mentions the necessity for political contestations to settle the specific ordering of principles, it is important to consider how civil servants should respond when a major reordering disrupts the existing order in a manner that makes it difficult to distinguish reordering the basic principles from excessively undermining some of them. In times of major political realignment, such distinctions can be very difficult to make. The book provokes many such thoughts. Heath’s contribution provides a useful framework to launch further inquiries into the ethics of civil service.
—By Suyash Rai