Attorney-General Christian Porter has flagged a new "serious harm" threshold for defamation cases, forcing people who claim to have been defamed to prove serious harm - or the likelihood of it - before they can bring the case.
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The move would bring Australia, which has highly restrictive defamation regimes, into line with Britain.
"Defamation laws no longer strike the perfect balance between public interest journalism and protecting individuals from reputational harm," Mr Porter said, speaking on Wednesday at the Press Club in Canberra.
Mr Porter said he would meet with the states and territories on defamation reform next Friday, November 28, and wanted draft legislation out by the end of January.
He also wants to see online platforms held to the same standards as other publishers - in a second round of reforms.
He pointed to "the very curious decision" in the case of former Northern Territory youth detainee Dylan Voller. In June, The Sydney Morning Herald, The Australian, Sky News, the Bolt Report and the Centralian Advocate were held responsible for potentially defamatory Facebook posts about Mr Voller on their pages.
"That doesn't level the playing field. That makes the playing field more un-level. And that's clearly something that needs to be dealt with," Mr Porter said.
"Meaningful reform" must consider a serious harm threshold, he said.
It should also consider a New Zealand-style defence of responsible communication on matters of public interest, he said. The New Zealand defence is not limited to the media, but to anyone who publishes information of public interest, as long as it is done responsibly.
NSW has led consultation on changes to defamation law, releasing a discussion paper in February.
It asks whether changes should be made to the right of companies to sue. At the moment, only small firms can sue for defamation - those with 10 of fewer employees. But the discussion paper says the British regime allows companies to sue when they can prove serious financial harm, and asks whether the rules in Australia should be changed to broaden or narrow the right of corporations to sue.
It also raises the possibility of extending protection against defamation to papers published in peer-reviewed scientific journals, and to academic conferences and press conferences. Britain has made this change, partly because of concern that defamation law was being used to silence the medical and scientific community to protect products.
Another question on the table is whether websites should be required to set out the facts before publishing opinions - which is the usual requirement in the mainstream media. Comment is protected as "honest opinion" so long as the facts are set out - a defence used for publishing restaurant, art, book and other reviews, and for commenting on sports and public affairs. But the discussion paper says some submissions had pointed out that the requirement to set out facts isn't workable in the online world where people express opinions on blogs, social media sites, text messages and tweets.
The Right to Know Coalition of media companies, which includes Canberra Times publisher Australian Community Media, has pushed for reform, saying the existing defamation rules have a chilling effect on freedom of expression.
It strongly supports a "serious harm" test, saying the existing law does not deal properly with spurious claims up front, wasting money, time and resources.
The serious harm test could apply in cases including where the plaintiff has such a bad reputation it couldn't be harmed more, the plaintiff was not known in the jurisdiction of publication, the issue was "vulgar abuse, "pub talk" or a mere criticism of goods or services, and where damage was short-lived due to a quick retraction, clarification or apology, the media companies suggest.