Defamation, but not as we know it

Last week in our Many hats interview we spoke with Steve Kuncewicz,  Head of IP and Media at Bermans LLP, who gave us some insight into his daily challenges and work. This week, Steve gives his view on the how the Defamation Act 2013 is reshaping the defamation landscape.

What was the position before the Defamation Act 2013?

Libel lawyers have traditionally taken no small comfort (and secured their mortgages) from the fact that the UK was the ‘libel capital of the world’. We developed that reputation from having particularly claimant-friendly defamation laws and from our courts being willing to hear cases which saw those laws often being brought to bear by individuals based outside the UK but who claimed a reputation here which could be, and was, fiercely protected.

Something had to change, not least because of what was seen as the unfair pressure and ‘chilling effect’ upon investigative (and sometimes less worthy) journalism exerted by the deployment of conditional fee agreements (CFAs) which allowed for uplifts on costs recoverable from the losing party in the event of a claim being successful. The Jackson reforms cut a swathe through CFA arrangements, and many expected the new Defamation Act 2013 (DA 2013) to have a similar effect upon libel and slander claims in the UK when it came into force on 1 January 2014.

Is DA 2013 the end of defamation as we know it?

No.

Does it completely overhaul defamation law for the social media generation?

No. DA 2013 is effectively a ‘re-skinning’ of defamation law that for the most part leaves the nuts and bolts of defamation law unchanged, but which also contains some significant new concepts designed to protect free speech and robust opinion. Here’s a whistle-stop tour.

Serious harm
Section 1 introduces a new requirement of ‘serious harm’ in defamation claims. Now, not only does a statement have to have a negative effect upon a reputation in the minds of the average person in the street or expose the complainant to hatred or ridicule, it also has to be at least likely to cause ‘serious harm’ to that reputation. For corporate claimants which trade for profit, that harm must be at least likely to cause serious financial loss. So far so good, but as with many sections in DA 2013, this new element is in fact only a reflection of the fact that the court have increasingly (mainly as a result of the Jackson reforms but also as a result of several key cases) struck out trivial defamation claims more readily.

The real devil, of course, lies in the detail—‘serious harm’ is not defined. This won’t be much of a problem for individuals as most claimants who take defamation cases to trial would only do so over the most serious of allegations. However, it’s fair to say that the lack of clarity on what serious harm actually is will lead to satellite litigation for the foreseeable future and find many potential claimants opting to wait for some interpretative judgments before taking action to protect their reputation.

Corporate claimants
As for corporate claimants, the issue over what constitutes ‘serious financial loss’ is likely to be even more complex. Are we talking about a drop in share price, diminution of goodwill, loss of profits or loss of trade? Remember that the usual rules of causation and remoteness will continue to apply, and that being able to blame an appreciable financial downturn on one statement will be very rare. Many businesses may be forced to let a defamatory accusation go unchallenged in an attempt to be able to show serious financial damage or retain forensic accountants to make the loss out, thereby only increasing the cost of dealing with the issue. However, it will be very interesting to see if ‘financial loss’ proves means-tested, with smaller businesses finding it easier to take action over smaller amounts which to them are proportionately much more significant than to their richer counterparts.

Businesses may also (until the court makes a particularly critical judgment) be well advised where possible to launch their defamation claim in conjunction with a personal claim made by any of their executives who is clearly identified by the statement and tarred with the same imputation. In practice, it’s unlikely that the issue of ‘serious harm’ will discourage the issue of a claim. However, it will at least give corporate claimants a forced but valuable pause for thought and focus their attention upon issues around quantum which they’d probably only have to deal with after issue in any event.

Single publication
Another major change is the introduction of a ‘single publication’ rule, which finds the one-year limitation period in defamation claims running from when the statement in question is published. This is of huge significance to online publishers, who previously had to cope with a potentially perpetually-running clock that began ticking from a year after an aggrieved user clicked on a link to the post in question. However, this new rule does not apply to any ‘materially different’ publication, and the issue of whether republishing on a different social network will count, and won’t stop claimants from pursuing any other website or publication which repeats the original allegation. Archive collections may be safer, but anyone lending credibility to an allegation by repeating it won’t be.

Defences
Several defences have also been simplified, such as ‘truth’, ‘honest opinion’ and ‘public interest’, but in ways which leave much of the existing case law largely every bit as valuable as before 1 January 2014. The main concession to the online world comes from the new defence in DA 2013, s 5 which completely protects website operators provided they can show that they were not responsible for posting the allegedly defamatory statement. However, the defence can be defeated if, after giving the website notice of a potential claim, the poster cannot be identified and the site itself does not follow the procedurally-complex procedure set out in the new Defamation (Operators Of Websites) Regulations 2013, SI 2013/3028.

In reality, unless website operators are willing to stand firmer on issues around free speech and train up their staff to recognise and deal with complaints before complying with the strict timescales that the new regulations prescribe, many may feel safer in relying on stern and well-enforced terms of use along with the complete defence available under the Electronic-Commerce (EC Directive) Regulations 2002, SI 2002/2013, reg 19. This protects them from liability if, once put on notice of defamatory or otherwise unlawful content being present on their site or servers, the offending article is removed ‘expeditiously’ (ie pretty much immediately). For the time being, at least, we’ll probably continue to see a ‘take down culture’. Considering Deloitte rates reputational risk as higher up the ladder of corporate risk than ever before, many sites may remove first and question later.

Jurisdiction
The courts will now also only have jurisdiction to hear claims from claimants who do not reside within the EU or a Lugano Convention state if the UK is the ‘most appropriate forum’ for that claim. Again, this is merely a statutory re-statement of the current law rather than the breaking of any new ground. Finally, the abolition of jury trials in defamation claims will most likely only help in front-loading risk and costs by an increase in rulings on meaning in the early stages of the litigation process.

Is DA 2013 a missed opportunity?

No, and at the same time yes. Much of the existing body of defamation case law will still continue to apply—albeit claimants will have more hurdles to overcome. Free speech may be the ultimate winner, but in the short term, and until some of the clear English of DA 2013 is tested in court, it looks like lawyers will be the only true winners as we help our clients get used to the treatment of their reputation in the new (old) world.

Area of Interest