Peers voted last night in favour of an amendment to the Defamation Bill to introduce a low-cost arbitration service to help ordinary citizens who feel they have been wronged by the press. The House of Lords voted in favour of the change, a key recommendation of Lord Leveson’s report, by 272 to 141 – the second biggest defeat for the government since 2010. Conservative rebels included former lord chancellor Lord Mackay, party donor Lord Ashcroft and former foreign secretary Lord Hurd. Under the amendment, newspapers would not be obliged to join the service, but failure to do so could be taken into account by courts when awarding costs and damages, including exemplary damages. The measure would require the lord chief justice to set up a Defamation Recognition Commission to appoint an independent regulatory board to provide the service. Introducing the amendment, film producer and Labour peer Lord Puttnam (pictured) said: ‘The bill before us contains a fatal flaw: it does not deal with the manner in which ordinary citizens will be able to utilise the protection that it offers. ‘The bill has been drawn up with the help of newspapers, which understandably see the world through their own looking glass. ’Anyone who reads the bill as it stands will not find so much as a hint of the fact that we live in a country that has spent much of the past two years debating the fall-out directly attributable to the unaccountable power of newspapers over our public life and over the lives of ordinary citizens. It is almost as if Leveson never happened.’ He said: ‘The amendments offer us the opportunity to break the logjam that would appear to have afflicted both the talks between the newspapers and the government and the talks between the three main political parties themselves. ‘At the very minimum, we would have the opportunity to make justice in disputes with newspapers quick and affordable,’ he said. Speaking against the amendment, Liberal Democrat Lord Lester said: ‘The scheme envisaged by these amendments is inquisitorial and not adversarial. It is not a voluntary scheme because of the threat of exemplary damages for failure to use a recognised arbitration service. ‘The arbitrator does not satisfy the requirements of judicial process by an independent court or tribunal established by law. The arbitrator can dispense with hearings in his or her discretion. There is no right of appeal to an independent court or tribunal and the process is free for complainants but to be paid for by the press,’ he said. Lester added: ‘In my view, such a scheme would be incompatible with Articles 6 and 10 of the [European convention on human rights]. It would result in complex legal disputes.’ Labour peer former and Lady Boothroyd added her voice in favour of the amendments. She said: ‘We need a system that allows the citizen to raise their complaint in a low-cost and non-adversarial way. Newspapers must be required to meet and hear those with appropriate complaints against them. ‘A robust arbitration service will, I am sure, help to change the culture of newspaper reporting and improve on the current mentality that everything and everyone is fair game for them,’ she said. For the government, Liberal Democrat Lord McNally told peers that cross-party talks on the implementation of the Leveson report have been taking place over a number of weeks, although he admitted that there had been a ‘lack of momentum’ in recent days. He indicated that a draft royal charter to oversee press regulation would be published next week. Following the vote, the amendment could become law when the Defamation Bill receives royal assent, unless it is overturned by the Commons.