A group of four peers will this week make the case for an arbitration service for defamation cases.

In an amendment to the Defamation Bill to be debated tomorrow, the Lords want to follow the recommendation of the Leveson report and push forward a low-cost arbitration service.

Courts would be encouraged to take into account whether claimants or defendants have chosen to use the service when awarding costs and damages.

Even successful parties may be ordered to pay all the costs of proceedings if they have unreasonably refused to use an available recognised arbitration service.

The lord chief justice would establish a Defamation Recognition Commission to appoint an independent regulatory board to provide the service.

The motion is supported by former attorney general Lady Scotland, Labour peer Lord Puttnam, former Speaker Lady Boothroyd and former lord chancellor Lord Mackay.

Justice minister Lord McNally will be under pressure either to agree to the amendments or put forward a set of alternative proposals.

In a briefing note, Puttnam said the amendment was designed to ensure ordinary citizens are not prevented from filing defamation cases against newspapers.

There were fears expressed last year in the build-up to the Legal Aid, Sentencing and Punishment of Offenders Act that changes to the no-win, no-fee structure would lead to only wealthy claimants.

An arbitration service was one of the key recommendations of the Leveson report.