A wide-ranging review of defamation law in the UK could bring fresh pressure in New Zealand to examine its effects on freedom of expression.

The UK review, according to an article by the Guardian’s political editor, Patrick Wintour, will look at the issue of libel tourism, and whether British courts are being exploited by non-UK celebrities and other foreign public figures.

The review will examine whether a specialist libel tribunal should be established to resolve defamation cases out of court and whether academics and scientists can defend their remarks on the basis of fair comment or in the public interest.

The wide terms of reference, set by Lord Chancellor Jack Straw, who heads the Ministry of Justice, will allow a working party academics, lawyers and newspaper editors to look into whether the burden of proof should be shifted from defendant to plaintiff, as is the case in countries such as the US.

New Zealand follows UK precedence in its defamation laws, including the assumption of guilt by the publisher or broadcaster.

Attempts to change the laws of libel in New Zealand usually fail because of opposition to change from politicians, though the Law Commission, headed by Sir Geoffrey Palmer, has urged reform.

Britain's restrictive libel laws have been exploited by plaintiffs with few real links to the UK. For example, a wealthy Saudi businessman successfully sued a US academic whose book on funding terrorism sold 23 copies in Britain over the internet. He was awarded £130,000 damages and costs by London courts, Mr Wintour reports.

In another case, a UK consultant cardiologist, Dr Peter Wilmshurst, is being sued by an American company, NMT Medical, for questioning the effectiveness of a new heart implant device.

Dr Wilmshurst had raised his criticism at an American conference and his comments were posted on a US website for three days, but he is being pursued in the high court at London because a number of cardiologists read the article in Britain.

The formal terms of reference will be to "consider whether the law of libel, including the law relating to libel tourism, in England and Wales needs reform, and if so to make recommendations as to solutions.”

The New York Times and the Washington Post have said they may be forced to stop selling copies in the UK because of the risk of being sued.

Other issues for examination include whether large and medium-sized corporations would have to prove malicious falsehood for a libel claim to succeed. It may also look at the implications of the internet for libel, Mr Wintour writes.

Despite the scale of the review, Mr Straw said he hopes the working party will report by mid-March in time for any reforms to be implemented before the general election.

The Guardian says Mr Straw is likely to set out the details of the working party formally after a report on privacy and press freedom from the House of Commons culture committee, due next month. The working party will also address issues raised in a joint report prepared in November by Index on Censorship and English PEN, a charity that supports persecuted writers.

The new panel will also look at considering the case for capping the level of damages that courts can award. The Index/PEN joint report recommended a libel damages cap of £10,000. The inquiry originally looked as if it would be confined to the important issue of libel tourism, but it seems officials believed it would not be possible to restrict the inquiry in this way, Mr Wintour says.

He adds:

It is likely to recommend that libel cases can only be brought if the overseas litigant has no close connection with England. There have been repeated claims that wealthy businessmen, medical companies and even suspected terrorists have been using the English courts to suppress stories that would have been printed in other countries.