Defamation - Case Law

Defamation — Parties — Corporation — Newspaper article alleging monitoring by Saudi Arabia of bank accounts of prominent businessmen to prevent transfer of funds to terrorist organisations — Businessman and his trading company named — Whether proof of special damage an essential element in libel — Human Rights Act 1998, Sch 1, Pt 1, art 10

The Wall Street Journal lost their appeal in what will be seen by the media as a setback for Reynolds privilege: many media defendants had hoped that the Court of Appeal would relax the test for Reynolds privilege which Eady J had formulated as being: “whether the media had an obligation to publish and whether the public had a need to have the information contained within it in the sense that it would be wrong to deprive the public of it”. The Court of Appeal declined to interfere with this test holding that “on the facts of this case it does not seem to us that the precise definition of Reynolds privilege was material”.

The Court of Appeal also refused the WSJE’s appeals to the effect that (i) there should be no presumption of damage in the case of overseas trading corporations that do not trade in this jurisdiction; (ii) that the common law presumption of falsity infringes Article 6 and Article 10; and (iii) that the jury should have been required to deliver a verdict recording its decision as to the actual meaning of the article complained of.

The common law rule by which special damage was not required to be proved in order to establish a cause of action in libel, damage being presumed once the libel was proved, was unaffected by art10 of the Human Rights Convention in respect of a corporation. The same rule applied to a foreign corporation with a trading reputation within the jurisdiction.

The Court of Appeal so held, dismissing the appeal of the defendant, the Wall Street Journal Europe Sprl against, inter alia, the ruling of Eady J on 5 December 2003 on the claim brought by Mohammed Abdul Latif Jameel and Abdul Latif Jameel Co Ltd, rejecting the defendant's challenge on art 10 grounds to the presumption of damage once a libel was proved.

LORD PHILLIPS OF WORTH MATRAVERS MR, giving the judgment of the court, said that the jury concluded that the claimant company, a substantial Saudi Arabian trading company of which the first claimant was the general manager and president, had been defamed by the article published by the defendants and that the appropriate award of damages was £10,000.Those findings were made after directions on English law by the judge that they should award appropriate damages if they found that the claimant company had a trading reputation in England and that the article bore a defamatory meaning that was apt to damage that trading reputation. The company had not attempted to prove that the article had caused it any specific financial loss by way of special damages. In interlocutory proceedings before the trial Mr Robertson contended that the Human Rights Act 1998 required the court to redefine the English law of libel as it related to corporations or foreign corporations. If English law was to be compatible with art 10 of the Human Rights Convention it had to require proof of special damage as an essential element in the cause of action in libel. The judge rejected that submission. There was no dispute as to the relevant principles of English law prior to the coming into force of the 1998 Act. Mr Robertson submitted that it was not necessary in order to protect the reputation of others to allow a corporation to recover damages for libel when it had not demonstrated that the libel had caused it pecuniary damage; the effect on freedom of the press afforded by English law before the 1998 Act was disproportionate to the object that it was intended to achieve. Their Lordships said that the difficulty that a trading corporation would often have in proving that a defamation calculated to cause damage to its trading reputation had resulted in specific financial loss was obvious. The judge pointed out that an important object of the law of defamation was to provide a means for those defamed to achieve vindication. A requirement to prove special damage would leave many an injured corporation without remedy. Their Lordships agreed. Such a requirement would not go far enough to provide necessary protection for the reputation of corporations that were at risk of being damaged by inaccurate press reports. S and M v United Kingdom (1993) 18 EHRRCD 172 suggested that the Commission saw no objection in principle to a foreign corporation receiving the same protection for its reputation within the British jurisdiction as a British corporation. Their Lordships saw every reason why they should receive the same treatment. Differential treatment would be likely to constitute discrimination in the accordance of art 6 rights, contrary to the prohibition imposed by art 14. It was likely in practice that a foreign corporation which traded outside this jurisdiction but not within it would have greater difficulty in establishing that it had a trading reputation within this jurisdiction. If it succeeded however, the interests of justice required that the same principles of law should apply to its claim for defamation.

Appearances: Geoffrey Robertson QC and Rupert Elliott (Finers Stephens Innocent) for the defendant. James Price QC and Justin Rushbrooke (Peter Carter-Ruck & Partners) for the claimants.

This is only the fourth consideration by the Court of Appeal of Reynolds privilege (GKR Karate, Grobbelaar, Al-Fagih and Loutchansky) since Lord Nicholls, in introducing his ten non-exhaustive factors in 1999, anticipated that “over time, a valuable corpus of case law will be built up” and the first since the Privy Council’s judgment in Bonnick v Morris. In this judgment the Court of Appeal reviews the test for Reynolds privilege and discusses what role meaning and the subjective belief of the Defendant have to the availability of the Reynolds defence. It also introduces new pleading obligations for both parties.

The Wall Street Journal published an article in February 2002 that identified Mr Jameel´s group of companies as being among those whose bank accounts were being monitored by Saudi authorities, at the US government´s request, in connection with the actual or potential funding of terrorism. In an action brought by the main company in the Group and by Mr Jameel, the Defendant contended that the publication was protected by Reynolds privilege and disputed the Claimants´ ´reasonable grounds to suspect´ meaning, contending it was not defamatory or at worst bore the lowest tier of gravity meaning ‘grounds to investigate’.

The action was tried before a jury in December 2003. In answer to a shopping list of questions put to the jury, the jury accepted that the words bore a defamatory meaning of the Claimants but rejected the journalist’s case as to his contact with 4 out of 5 of his anonymous sources in Saudi Arabia (none of whom were called). The jury also did not accept his account of his attempts to verify the story and contact the Claimants in advance of publication. Subject to the defence of qualified privilege, the jury awarded damages of £30,000 to Mr Jameel and £10,000 to the company. On the basis of the jury´s findings of fact, Eady J rejected the defence of qualified privilege. The Defendant’s appealed on qualified privilege, presumption of falsity and presumption of damage.

(i) The Test: The Court of Appeal upheld Eady J’s identification of the primary question as being “whether the peculiar circumstances gave rise to a duty to publish. The question of whether there had been responsible journalism or the exercise of due professional skill and care were matters to be addressed when answering that primary question. ..The duty in question was a social or moral duty and that the obverse of this test was whether it was in the public interest at the time for the words to be published”.

“Responsible journalism is insufficiently precise to constitute the sole test for Reynolds privilege. … The requirements of responsible journalism will vary according to the particular circumstances and, in particular, the gravity of the defamation. Responsible journalism must be demonstrated before Reynolds privilege can be established. But there is a further element that must be demonstrated. The subject matter of the publication must be of such a nature that it is in the public interest that it should be published. This is a more stringent test that that the public should be interested in receiving the information.” (paragraph 87)

However, the court declined on the facts to wrestle with the Defendant’s submission that Eady J’s refinement of the test (“whether the media had an obligation to publish and whether the public had a need to have the information contained within it in the sense that it would be wrong to deprive the public of it”) was too stringent a test. Or, that if gravity is particularly relevant, why the jury should not have been asked for their decision as to the meaning of the article.

(ii)Jury finding on meaning: The difference between ´reasonable grounds to suspect´ and ‘grounds to investigate’ meanings can be a narrow one, the court held. “Had the issue of Reynolds privilege been likely to turn on whether the words bore the more or the less serious meaning, it might have been necessary to invite the jury to choose between the two. But the judge plainly did not consider that the precise nature of the defamatory sting was capable of affecting the outcome. We share that view.” (paragraph 84)

(iii) Defendant’s subjective belief: In a novel direction, the Court of Appeal held that responsible journalism requires a belief in the truth of the article’s [obvious] defamatory implications: “It is clear that he [the judge] did not consider that the article was one which it was in the public interest to publish without adequate attempts at verification and without belief in the truth of its defamatory implications. We are of the same mind”. (paragraph 89)

(iv) Bonnick v Morris: The Court of Appeal ruled that Bonnick has no application where the article is obviously capable of bearing a defamatory meaning and therefore questions as to whether Bonnick represents the law in this jurisdiction and, if it does, how it applies remain unanswered.

“In Bonnick it seems that the Defendant gave evidence that she did not appreciate that her article had a defamatory meaning. The Judicial Committee of the Privy Council considered that she could be forgiven for this and therefore had not acted irresponsibly in publishing the article. … We consider that the judge was justified in holding that no responsible journalist could have ignored the fact that the article was capable of a defamatory meaning. .. For these reasons we have concluded that the judge was correct to rule that Bonnick v Morris had no application to the facts of this case.” (paragraphs 90-97)

“It seems to us that, in seeking to demonstrate that a publication accords with the requirements of responsible journalism, a publisher will almost certainly wish to adduce evidence of the subjective belief of those responsible for the publication…to demonstrate that it was reasonable to believe that a defamatory article was true…or that a third party was conducting an investigation…[or] to demonstrate that it was reasonable not to appreciate that an article bore a defamatory meaning.” (paragraph 27)

“It is important that the pleadings should make clear where a defendant is relying on reasonable belief in the truth of matters published, or their implications, and where he is not. It is also important that the claimant should make clear whether or not he denies that the belief was held, or whether he merely contends that the belief was not reasonable.” (paragraph 31)

Judge or jury: “The division between the role of the judge and that of the jury when Reynolds privilege is in issue is not an easy one; indeed it is open to question whether jury trial is desirable at all in such a case.” (paragraph 70)

Presumption of falsity: Where the jury are asked to make findings of fact relevant to Reynolds privilege “it does not seem right to us that the jury should apply a presumption that the article was false”. (paragraph 61).

The Defendants submitted that Article 10 required a redefinition of English libel law to require corporations or, alternatively, foreign corporations which do not trade here, to prove special damage as a prerequisite for a cause of action in libel. The Court of Appeal rejected this argument on the grounds that a requirement to prove special damage would leave an injured corporation without a means to achieve vindication; and, in respect of foreign corporations, agreed with the European Commission of Human Rights that there is no objection in principle to a foreign corporation receiving the same protection for its reputation within this jurisdiction as a British corporation, and differential treatment would be likely to constitute discrimination in the accordance of Article 6 rights, which is prohibited by Article 14.