Death of defamation in England and Wales?

This article was produced by Nabarro LLP, which joined CMS on 1 May 2017.

Summary and implications

Two years have now passed since the introduction of the new defamation regime in England and Wales. But, have the expected outcomes of the fundamental changes been realised?

This briefing considers the impact of the Defamation Act 2013 (the Act) and whether the aims and aspirations have been achieved to-date.

In this briefing we focus on the three main areas of the Act developed in the courts so far:

1. the requirement to demonstrate "serious harm";
2. the requirement for companies and other profit-making entities to demonstrate actual or likely "serious financial loss"; and
3. the clampdown on forum shopping.

Serious harm

In order to bring a claim for defamation, claimants must now prove, on the balance of probabilities, that they have suffered, or are likely to suffer, serious reputational harm as a result of a defamatory statement. The courts' first consideration of this new requirement set the bar high for demonstrating serious harm (click here for our briefing on the case). Over the last 18 months, judges have provided a clearer picture of the factors that should be taken into account when an assessment of serious harm is made:

• Nature of the defamatory information

Certain publications may bear a meaning that is inherently seriously harmful to a claimant's reputation. For example, publication of two entrepreneurs' names on a register of known spam offenders was found to impute seriously unlawful, deceitful conduct in the course of business (see Ames v Spamhaus) as were allegations suggesting that a businessman had been involved in tax evasion (see Ahuja v Politika). Allegations that a person had made false claims about his ex-wife in order to take advantage of the Emirati law enforcement system and obtain custody of his son have also been found to convey a "serious" defamatory meaning about a "serious" topic (see Lachaux v Independent Print and Others).

• Reliability of the source

Whilst not a determining factor on its own, the more reliable the source of a defamatory publication, the more this will assist in demonstrating that the "serious harm" requirement has been satisfied. The publisher of the register of known spam offenders mentioned above, the Spamhaus Project, was considered authoritative and reliable and therefore the allegations made were "very likely indeed to be taken as true and relied on by readers". Newspapers such as The Independent, Huffington Post and Evening Standard have also been considered reputable as has a daily Serbian newspaper "of high standing".

• Number of recipients of the defamatory information

The number of people that a potentially defamatory publication has reached will also be relevant. Large readerships, ranging from 1,955 for an online publication to 1.67 to 2.5m in relation to a printed newspaper, have been cited as principal grounds in the court's finding that a number of articles caused serious harm.

• Recipients' knowledge of the claimant

The recipient of a publication must have known, or at least have knowledge of, the claimant in order for his or her opinion of the claimant to be seriously affected. The fact that most of the recruiter recipients of a defamatory email about another recruiter were based in the same area as the defamed, was considered relevant because the risk of them coming across him was high (see Theedom v Nourish Training).

• Extent of redistribution of the original publication

Widespread re-publication of the original statement has also been considered a relevant factor, such as re-publications made on a number of apparently authoritative websites. However, there is also evidence of the courts choosing not to attribute great weight to the fact that some re-publication of a defamatory publication would have been inevitable.

• Lack of published apology

The absence of a published apology has been considered significant in a finding of serious harm.

• Online articles – length of time a publication is available and number of visitors

For online articles, both the period of time for which an article is available online and the number of visitors that have viewed defamatory information has been deemed significant. An article that remained online for a period of nine months was found to have caused serious harm. However, where there have only been limited visits to an online publication, this may diminish the level of any harm. An article which was available for 13 months was found not to cause serious harm because of a low number of visitors over the period.

Serious financial loss

The new requirement that a company bringing a claim for defamation must have suffered "serious financial loss" in order to show serious harm has now been considered in the courts (see Brett Wilson LLP v Persons unknown).

A law firm's listing on a "Solicitors from Hell" website, which appeared in the top five results of a Google search of the firm's name, led to "serious financial loss" because the firm was a small and relatively recently-established practice which attracted a considerable amount of work through the internet. Even though the claimant could only show that it had lost one instruction as a result of the listing, it was accepted that, for a small firm taking high-value instructions, this in itself could constitute tens of thousands of pounds. On top of this, there would inevitably be a high number of other potential clients who decided not to instruct the firm as a result of the listing, but would not notify the firm in any way.

Clampdown on libel tourism and forum-shopping

The introduction of a higher jurisdictional threshold, which must be crossed by a claimant seeking to bring a defamation action in England and Wales, has also now been applied in the courts.

In Ahuja, the court has confirmed that the bar has been set very high, potentially making it difficult for individuals with global reputations to vindicate their reputation through the courts, despite being resident or domiciled in England and Wales. The court has confirmed that it will only be in a position to assist where claimants provide evidence of harm to their global reputation, which satisfies the court that of all places in which the statement has been published, England and Wales is clearly the most appropriate place in which to bring an action.

In considering the question whether England and Wales is clearly the most appropriate place, the court will take into account a number of factors, including:

• the number of times the statement complained of was published in England and Wales, compared with other jurisdictions;
• the amount of damage to the claimant's reputation in England and Wales, compared to elsewhere;
• the extent to which publication was targeted at readership in England and Wales compared with elsewhere;
• whether there was reason to think that the claimant would not receive a fair hearing elsewhere; and
• the convenience of witnesses and the relative expense of suing in different jurisdictions.

In seeking to persuade the court, a claimant will need to provide evidence as to publication in all places which the words complained of have been published.

In Ahuja, the claimant (an Indian citizen and Serbian national who has been resident in England since 1995 and has indefinite leave to remain) complained of statements published in a Serbian newspaper, in hard copy and online formats. The evidence submitted demonstrated that the claimant travels globally, is rarely in one country very long, has residences in the UK and Belgrade and owns or co-owns properties in the USA, India and Austria.

The articles complained of were shown to have been accessed from 19 countries, with by far the most hits coming from Serbia. The number of hits emanating from the UK was in the region of one to two per cent of those emanating from Serbia, with a number of other countries featuring higher than the UK (including Austria, Canada, USA, Bosnia and Herzegovina, Switzerland, Australia, Germany and Italy).

In light of this, together with a failure to provide cogent evidence that there was a real risk justice would not be obtained in Serbia, the court was far from satisfied that England and Wales was clearly the most appropriate place to bring the action.

What are the implications?

It is clear that the threshold for demonstrating serious harm is set high. Statistical evidence from the Act's inaugural two years suggests that this development, coupled with a clampdown on jurisdictional forum shopping, has already led to reports of a significant decline in the number of defamation cases brought in England and Wales (see here for further information).

Whether this decline will continue at such a dramatic rate remains to be seen. To some extent, case law may be revealing a slight lowering of the initially very high bar. For example, in Lachaux a relatively infrequent visitor to the UK who was not known to a large number of people within the jurisdiction was found to have suffered serious harm. Similarly, serious harm was suffered by a recruiter who, despite being the subject of a defamatory email sent to potential employers, found similar employment within a month.

We may therefore start to see claimants attempting to test these potential chinks in the armour, in an attempt to find out whether the new law really has sounded the death knell for defamation claims in the world's former libel capital.