Ready, steady, sue ...

At first sight, a new fast-track judicial ruling for libel cases, with a pounds 10,000 ceiling on damages, sounds like good news all round. The defendant, usually a newspaper or a television company, knows what the worst will mean if it makes an allegation it cannot subsequently prove to a jury's satisfaction. And there would be no jury to award lottery- sized payouts on a whim or a prejudice. From the other side, too, there is equal apparent attraction. A plaintiff, if rich and famous, can win a well-publicised victory much quicker without having to be cross-examined for days. If poor, he or she is likely to be able to hang on long enough to get a result against a rich media company. Better news still, for many, would be the thought that the whole business could be sorted out without either side having to write out a huge cheque at the end for the lawyers.

These are all outcomes intended to follow the libel reform that was tacked on to the Queen's Speech almost unnoticed under "other legal business" amid the furore over the higher profile reforms proposed by the Lord Chancellor's Department (LCD) - in such cases as divorce and domestic violence and legal aid.

The Defamation Bill, assuming it finds parliamentary time this session, will follow the lines of a draft Bill put out in July for consultation, which closed last month. There have been objections, but nothing to make the LCD believe it is not pointing in the right direction.

It is intended to work like this: a High Court judge will call both sides in at a very early stage - no one is quite sure how early in terms of legal steps, but almost certainly after pleadings, and before exchange of witness statements. The judge will consider whether there is a reasonable claim for damages and, if not, will throw it out there and then. The judge will have to assess whether there is any sustainable defence, and whether the damage to reputation in the complained-of publication is less than pounds 10,000.

The judge can call for further evidence, even request witnesses for a mini-trial. If the damage is below pounds 10,000, in his view, and there is no defence, he can rule immediately on the amount of damages and the form that the apology should take.

The judge will have the power to order an apology to be published or broadcast, either as an agreed form of words, or the judge's own findings.

But what is clear is that the new process has only limited applications. The new procedure is not a fast-track trial, not a kind of small- claims court for libel. Its effect is to weed out the hopeless cases early on. But even if there is a case with no defence, but a serious damage to reputation, it will go on through the old, full system as before.

It is far from certain that summary judgment would mean less work for lawyers, even if it meant the work was slightly different - faster and earlier could mean more work.

Even in cases where the new procedure did come in, if a case went to a big preliminary hearing with few or no witnesses and with the judge reading the statements, there would be no public spectacle, but the costs would reduce by perhaps only a third. This is because although witnesses would not have to attend court, the area is one of the chief expenses in a trial. Most of the expensive work would still have to be done, and would have to be done against a deadline, which might mean added expenses - travelling to interview witnesses abroad rather than waiting for them to return to Britain. If the judge decided there was a defence, and the case had to go on up for a full hearing, those bills would be added to the normal, later, ones.

Barristers would still be needed to perform in court on such occasions, and would still be required to give expert advice on whether and how to proceed at various stages.

So while damages might be only pounds 5,000, costs could be 50 times that for a complex case. The draft Bill has not made clear where the fast track will leave payments into court, and liability for costs. The complexity of a case is often not related to its seriousness.

The introduction of a fast settlement, if it really keeps costs down, may lead to far more cases being brought, more work for lawyers. Plaintiffs may be less deterred from suing, even though they have no legal aid, if they think restitution is quick, cheap and certain. At the moment, costs mount so fast that plaintiffs dare not stop until they have won because they cannot afford to. The new early judicial hearing may stop the agony earlier, but in many cases it will not. Without certainty of a quick, cheap solution, the risk will still be too great for many libel victims.

There is concern among libel lawyers that libel does not, by its peculiar nature, lend itself to summary proceedings.

Reputation is a nebulous concept - so the reputation, as well as the damage inflicted on it, has to be correctly assessed. And the new system puts an enormous demand on the judge, who has to decide the merits of a case on a very cursory outline of the circumstances. He has to make an exact judgment on that basis about the extent of damage to a reputation, something that is notoriously hazy.

"How can any judge be expected to decide what any case is worth without hearing evidence, particularly one where the damages are intended to compensate for the harm that has been done to a reputation?" asks Sarah Webb, a partner in the London solicitors Russell Jones & Walker, which acts for plaintiffs in libel actions who are not rich - clients in the past year have included firemen, care workers, railway workers, farmers, vets and police officers. There is no legal aid for libel.

Mrs Webb fears the changes would make popular newspapers even more gung- ho about publishing unsubstantiated stories if they knew the maximum damage would be limited to pounds 10,000. She would like a higher top figure.

Uniquely among civil actions, libel damages are decided by juries if either side requests one. Susan Aslan, a partner in the London firm DJ Freeman - whose clients include Associated Newspapers, Channel 4 and Carlton Television, as well as some libel victims - says many serious libel cases are not the result of a cavalier failure to check facts. She says television companies take enormous pains with a documentary: "They would feel very aggrieved if they were not allowed to put their evidence in," she says.

There are worries that judges will not be patient enough with defendants who have not produced defence statements at an early stage. For a television documentary in which the programme-makers may have spoken on film to many witnesses, there will not be affidavits from all, so as far as the judge is concerned, the evidence is not there.

"A judge may say 'you shouldn't have broadcast if you don't have your evidence ready'. That misses the point - the film-makers are satisfied that what they are saying is true, but the onus of proof is on the defendants." Ms Aslan is working on a case in which the defence witnesses have to be interviewed again in Bangladesh. "If a judge did not give us time to get those statements, it would be intrinsically unfair."

The fast track will do nothing for areas where the libel laws are in the greatest disrepute, the huge damages claims awarded by juries - pounds 1.5m against Count Tolstoy, pounds 600,000 to Sonia Sutcliffe. The Court of Appeal has been allowed for the past five years to reduce them, and has done so - Esther Rantzen's damages against the People, for example, over allegations that she helped to cover up for a paedophile, were cut from pounds 250,000 to pounds 110,000, while Teresa Gorman's pounds 150,000 award over a fake press release portraying her as vain and deceitful was cut to pounds 50,000. In sub-pounds 10,000 cases the legal costs of an appeal would often be more than that.

If the new law does work in the public interest, it will be because it persuades more newspapers to think twice before publishing an untrue libel, then encourages them to settle more readily after a mistake, or because it discourages gold-digging plaintiffs from trying to accumulate out-of- court settlements from newspapers prepared to pay up rather than fight. But on both those possibilities, the jury is still out.