The first problem — a technical one, admittedly — concerns jurisdiction regarding foreign claimants (what we would call "plaintiffs") and publishers (remembering that in defamation law, the "publisher" is the person or entity who makes the allegedly defamatory statement... and yes, that is indeed where we get the term "publisher" as in "published my book"). Clause 7(2) of the draft bill limits the jurisdiction of UK courts to instances in which the court "is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement." Although this is a tremendous improvement over the current doctrine that has led to the UK being the forum of choice for English-language critical (but not necessarily truly defamatory!) statements, it does not go nearly far enough in one critical respect. By focusing solely upon "where" the statement was made (without, by the way, any consideration to how it was made — such as by importation of a foreign-published work by a UK-based retailer), it does not give adequate consideration to where the evidence that might otherwise support the statement is. Consider, for example, the underlying facts in Ehrenfeld v. Mahfouz, which concerned allegations of funding of terrorist and pro-terrorist activities. The evidence relied upon by Ehrenfeld was scattered across the globe, but appears to have been concentrated in Luxembourg, Switzerland, and Italy (or, at least, more concentrated there than anywhere other than the Arab world).
This leads, rather inexorably, to the principle problem with the bill — an unstated assumption. Clauses 2 through 4 largely replace the Minoan labyrinth of common-law "truth" defenses with a broader, more comprehensive combination of "fair comment and opinion, or it was in any event true" defenses. This does not go nearly far enough. In the remainder of tort law in the UK — and in defamation law in the US — the claimant (plaintiff) is responsible for proving that the alleged act was indeed committed with the requisite intent, usually negligence. Clause 3, however, leaves unaltered the main problem with the UK's libel law: At the moment that the claimant (plaintiff) identifies an allegedly defamatory statement in court, the court treats that statement as if it is false (and therefore wrongful) unless the defendant can actually prove it true (Clause 3(1)). The US practice is vastly superior: The identified statement is presumed true unless the plaintiff (claimant) proves it false. In layman's terms, this is the equivalent of "the tie goes to the runner (speaker)" in US practice being interpreted as "if it's a close play, the runner is out."
Finally, a word on some bad logic embedded in the executive summary. Paragraph 80 of the government's presentation is worth quoting at length (page 33):
In our discussions with interested parties, there were mixed views as to how far libel tourism is a real problem. Research which was conducted in the context of the consideration of this issue by the Ministry of Justice’s Libel Working Group did not show any significant number of actual cases involving foreign litigants in the High Court in 2009, and did not find any evidence of the type of libel tourism cases that are of most concern (those where both the claimant and defendant come from outside the EU). However, NGOs have indicated that a major problem arises from the threat of libel proceedings by wealthy foreigners and public figures which is used to stifle investigative journalism, regardless of whether actual cases are ultimately brought, and hence that the number of cases alone may not accurately reflect the extent of the problem. Certain of the other provisions which have been included in the draft Bill or on which we are consulting should assist in making this jurisidiction less attractive to defamation litigants (eg the substantial harm test). However, on balance we believe that there is also a need to take focused and proportionate action specifically to address this issue.
The obvious logic problem here is that defamation law acts more by chilling speech than by litigating over it... and not just as to NGOs (nongovernmental organizations, such as Amnesty International), but as to individual authors and even scientists and social scientists. I am personally aware of a double handful of books and academic research pieces that were not published at all this century — even in the US — because a legal review, signed by US-based counsel, convinced the publisher that statements made in those works would be protected/protectable under US defamation law and the First Amendment, but could result in protracted litigation under UK defamation law. That is, the actual incidence of cases in the High Court in the UK is certainly one factor in considering the importance of the libel tourism problem... but, contrary to the impression of paragraph 80 (which is not softened elsewhere), certainly does not indicate the upper limits of the problem (and certainly not when confined to a single-year snapshot that missed Mahfouz v. Ehrenfeld!) — only the lower bounds.
Overall, this is a decent start, but it requires some fundamental rethinking, too. If enacted as it stands, it would be better than nothing... but it still would not prevent the chilling effect from spilling over the Pond.