The new Defamation Bill, which has just begun its report stage in the House of Lords, will generally be welcomed as it holds out the promise of simpler and fairer procedures.

However, one oddity at least has escaped the draftsman.

This is the rule that the character of a statement as fact or comment must be determined only by reference to the document in which the statement appears, disregarding the context.

This rule was laid down by the remarkable House of Lords decision in Telnikoff v Matusevitch [1992] 2 AC 343, which undermines the defence of fair comment.

In the US this ruling has already been held incompatible with the first amendment to the constitution.Mr Telnikoff and Mr Matusevitch were immigrants to Britain from the Soviet Union, employed on Russian-language propaganda broadcasts.

In 1984 Mr Telnikoff published an article in the Daily Telegraph claiming that these broadcasts were an ineffective means by which to turn the Russian people against their rulers because their aims were confused.

Communism, he argued, was alien to Russian rel igious and national aspirations.

Therefore the propaganda broadcasts should attack the ideology of Communism, not the Russian people.

His article continued: 'This confusion further manifests itself in the policy of recruitment for the Russian service [of the BBC].

While other services are staffed almost exclusively from those who share the ethnic origin of the people to whom they broadcast, the Russian service is recruited almost entirely from Russian-speaking national minorities of the Soviet empire and has something like 10% of those who associate themselves ethnically, spiritually or religiously with the Russian people.' He advised the BBC to change its recruitment policies.Mr Matusevitch, a Jew, was outraged.

In the Soviet Union Jews were regarded as having a distinct nationality -- his own passport recorded his nationality as Jewish.

He read the article as an attack on the employment of many Jews in Russian-language broadcasting.

He wrote a letter in response claiming that the BBC 'employed people in accordance with common democratic procedures, interested in their professional qualifications and not in the blood of their applicants'.

He proceeded to criticise Mr Telnikoff's views in strong termsMr Telnikoff sued him for libel.

In May 1989 Mr Justice Drake dismissed the claim, ruling that any reasonable jury would be bound to uphold Mr Matusevitch's plea of fair comment on a matter of public interest.

There was no evidence of malice.

His ruling was upheld by the Court of Appeal, all three judges agreeing that the words complained of could only be comment.

However, they reached this view by looking at the Matusevitch letter in the context of the article to which it replied.

Mr Telnikoff's counsel argued that certain references were not comment but statements of fact which could not be justified as such, and that the question of fact or comment had to be answered by looking at Mr Matusevitch's letter alone, ignoring Mr Telnikoff's remarks which prompted it.There was no clear authority on this point.

In the appeal to the House of Lords four of the five Lords accepted the argument that only Mr Matusevitch's letter could be looked at, disregarding the context.

Whether the words were fact or comment should have been left to the jury, said the Lords.

A re-trial was ordered.

Lord Ackner, in a minority of one, said: '[This means] the freedom to comment on a matter of public importance becomes, from a practical point of view, illusory or non-existent.'After six judges had held it beyond argument that the words were comment, the jury in the retrial decided otherwise.

They found for the plaintiff and awarded him the grotesque sum of £240,000.

Mr Matusevitch could have challenged the verdict on appeal or by an application under art 10 of the European Human Rights Convention.

Having been posted by his employers to the USA he chose not to do so.Mr Telnikoff has pursued him there, seeking to enforce his judgment.

Mr Matusevitch now contests its enforceability under US law.

On 27 January 1995, Judge Ricardo Urbina of the US district court for the District of Columbia upheld his submission that it would be repugnant to public policy to enforce a judgment incompatible with the first amendment to the US constitution.

Several US authorities show that courts look to context in determining the character of a statement.

Judge Urbina held that: 'If the statements were read in context to the original article .

.

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a reader would reasonably be alerted to the statement's function as opinion and not as an assertion of fact.

US law would also r equire proof of malice on the part of Matusevitch.

All the English courts, including the House of Lords, held that this was absent.' Mr Telnikoff is appealing the district court's decision.

However, Mr Matusevitch is backed by an impressive array of media organisations, alert to the free speech implications noted by Lord Ackner.

These are led by the New York Times, the Washington Post and the Associated Press.Telnikoff v Matusevitch is a striking illustration of the excessive technicality and unreality into which our defamation law has been driven.

The Defamation Bill is a tentative step towards a rational and accessible means of reconciling protection of reputation with freedom of expression, as demanded by article 10 of the Human Rights Convention.

A simple amendment to the Bill on the following lines would dispose of the indefensible rule discussed in this article: 'In determining whether a statement is fact or comment, the context shall be taken into account, including where appropriate a document or documents other than that in which the statement appears.'