Latest 'Cash for Access' ruling - Court of Appeal clarifies test for malicious falsehood

Oliver Murphy, an associate at Reynolds Porter Chamberlain, says taking into account that the appeal in Cruddas v Calvert turned on its facts rather than any substantive legal issue, the reduction in damages was substantial and a good result for the defendants.

What is the background to this case?

This appeal results from an undercover operation during which two journalists approached the claimant (the treasurer of the Conservative Party), under the guise of international financiers who wanted to discuss the possibility of making large donations to the Conservative Party, and the possible benefits that could flow from those donations. As a result of the meeting, the two journalists wrote three articles which appeared in the Sunday Times on 25 March 2012 along with a further article not written by the journalists but commenting on the issues raised.

The claimant claimed that the articles had three meanings. Broadly the first meaning concerned ‘cash for access’ matters and the second and third meanings concerned allegations of unlawful foreign donations.

On an expedited appeal on meaning the interpretation of the first of the meanings was held to suggest the claimant’s actions were ‘inappropriate, unacceptable and wrong’ rather than being criminal. The second and third meanings were held to mean that the claimant had shown himself willing to commit a criminal offence.

On what grounds did the defendants bring an appeal?

At first instance Mr Justice Tugendhat found in favour of the claimant and awarded damages of £180,000. It was held that the defendants had failed to justify any of the three meanings. In addition, Tugendhat J found that the defendants were liable for malicious falsehood in relation to the meanings attributed to the articles. Specifically, in relation to the first ‘cash for access’ meaning, Tugendhat J found that even though the articles did not mean that the claimant engaged in criminal conduct, a cynical reader could understand the first meaning as connoting criminal conduct. In the absence of a single meaning rule in malicious falsehood claims this was enough for a finding of liability.

The defendants’ appeal was consequently based on the fact that all the meanings were true and that therefore the defendants were not liable in either libel or malicious falsehood in respect of those meanings. In relation to the ‘cash for access’ meaning the defendants contended that they could not be liable for malicious falsehood as they did not intend readers to place the alternative, imputation of criminality, interpretation on the articles.

How did the Court of Appeal deal with the defendants’ arguments concerning the various meanings of the articles published?

The Court of Appeal subsequently found that out of the three meanings, meaning one (cash for access) was substantially true. In relation to the second and third, foreign donation meanings, the Court of Appeal found that the defendants had failed by a large margin to justify those meanings.

In finding that meaning one was justified the Court of Appeal found that Mr Cruddas was effectively saying to the journalists that if they donated large sums to the Conservative Party, they would have an opportunity to influence government policy and to gain unfair commercial advantage through confidential meetings. This was clearly ‘unacceptable, inappropriate and wrong’.

Turning to the malicious falsehood claim in relation to meaning one Lord Justice Jackson, with whom the other appeal judges agreed, stated that the journalists realised that some cynical readers would understand the articles to mean that Mr Cruddas was proposing criminal bribes. This was despite the fact that the articles did not mean that and the journalists knew that the articles did not mean that. This was not enough for a finding of malicious falsehood.

In your opinion, is this ruling the best realistic outcome the defendants could have hoped for?

Given that the defendants appealed on no fewer than sixteen grounds they may have been hoping for more from the appeal. Damages were however reduced from £180,000 to £50,000. The Court of Appeal found that the general damages award at first instance should be treated as comprising £100,000 in respect of meaning one, £65,000 in respect of meanings two and three and £15,000 in aggravated damages. The awards for the second and third meaning were also reduced to reflect a finding of justification in respect of the first meaning.

Taking into account that the appeal turned on its facts rather than any substantive legal issue, the reduction in damages was substantial and a good result for the defendants.

What can lawyers take away from this ruling?

The appeal basically turned on its facts, there was heavy examination of the transcript of the undercover interview and the Conservative Party’s donations guidelines. It was on this analysis that the Court of Appeal came to a different view on the facts from the trial judge.

The Court of Appeal did however clarify the test for malicious falsehood. They found that since the test for malice is subjective, knowledge and falsity must be assessed by reference to the meaning which the defendant intends to convey. The Court of Appeal held that it was not malicious for an author to merely foresee that an article could be interpreted incorrectly when the meaning he or she intended to convey was correct.

Oliver Murphy has experience in dealing with defamation and privacy actions from a defendant perspective across a wide range of media including newspapers, online and television. He also advises publishers on challenges to court-ordered reporting restrictions.

Interviewed by Kate Beaumont.

This article is republished with kind permission of WIPIT's sister site, subscription service Lexis®PSL IP&IT.

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