In her discussion of the recent decision in Metropolitan Schools v Designtechnica ([2010] EWHC 2411 (QB)) – posted by us on 30 October – Siobhain Butterworth draws attention to the oddity of the case.  The claimant has been awarded £50,000 in libel damages which it is unlikely to ever recover. This is because the defendant is a US corporation protected against English libel awards by the SPEECH Act. 

Siobhain Butterworth points out that the claimant had not relied on the presumptions of falsity and damage but instead demonstrated to the court that the allegations made were untrue and it provided evidence about the damage suffered to its trading reputation.  She goes on to suggest that even under the proposal in Lord Lester’s defamation bill – that companies should be required to show that defamatory allegations caused, or are likely to cause, substantial financial loss to them – the claimant would probably have succeeded.

However, she goes on to say that

“under such a provision, but it seems unlikely that the result would have been the same because the compensation would not reflect the need to clear the company’s name – the main reason for the high award here”.

We are not sure that this last point is correct.  Lord Lester’s Bill does not seek to alter the nature of the libel damages which aim not only to compensate claimants for financial (and non-financial loss) but also to provide vindication.  Nevertheless, this case does illustrate an important gap in the present English law of libel.  The reason why Metropolitan Schools required such a large award of what seem essentially symbolic damages is to demonstrate to the world that the allegations which were made against it were false.   The question arises why an award of damages is needed at all.

In many European countries the primary remedy is an order for the publication of corrections or apology – often in the form of the publication of a summary of the Court’s judgment.   This would provide vindication without the need for substantial damages.   Another possible remedy is a “declaration of falsity”.   The Court could make a public declaration that the defamatory allegation was false.

At present this remedy is only available under section 9 of the Defamation Act 1996 – on the summary disposal of a claim under section 8.  In Loutchansky v Times Newspapers (No.6) ([2002] E.M.L.R. 44) it was held that a declaration of falsity was not available at common law.  This decision has been criticised by Jonathan Coad in a piece entitled “The price of truth found to be too high in the new law of libel” but it was not appealed and remains the law.

A declaration of falsity was made in the case of Salman Rushdie v Evans and others in 2008.  There is a news report of the case in the Press Gazette. It is not clear whether this was made by agreement or under the summary disposal procedure.  Nevertheless, there is considerable substance in the subsequent comment of Mr Rushdie’s counsel, Geoffrey Robertson QC when he said that his client had

“pioneered a new way of reconciling the right to freedom of speech with the right to reputation – you nail the lie for all time with a court ordered declaration of falsity and you receive your legal costs, but you decline to chill free speech by putting authors and publishers to an expensive trial and making them pay heavy damages”.

The introduction of the “declaration of falsity” remedy in a new Libel Reform Act would address the apparent anomaly of cases such as Metropolitan Schools.  It would provide a way of vindicating claimants without awarding damages.  A court determination of the falsity of a defamatory allegation would be placed on the record and could be relied on by the claimant to vindicate reputation.

This is often the only thing that a claimant wants – for it to be publicly declared that he or she did not engage in the conduct alleged.  If the remedy of a declaration of falsity were to be made available, the claimant could be required to prove the falsity of the allegations.  The fact that there is a “privilege” or “responsible journalism” defence in such a case should be relevant only to costs.  The question as to whether there is such a defence is irrelevant to the truth or falsity of the underlying allegation (and to the public utility of that falsity being established).

We hope that reform of the remedies available in libel actions – so that claimants can obtain declarations of falsity and orders for corrections and apology – will be on the agenda when the Ministry of Justice considers libel reform.