The Court of Appeal yesterday delivered judgment in the joined cases of Cairns v Modi and KC v MGN Ltd ( EWCA Civ 1382). Both appeals concerned the assessment of damages in libel actions, although the facts of the two cases were very different.
The Cairns case concerned a serious attack on the professional reputation of a world-famous cricketer, who was falsely accused of match fixing. The Claimant was awarded £90 000 in damages. The case of KC involved a newspaper falsely claiming that a man had been convicted in the 1970s of raping a 14 year-old girl. The newspaper acknowledged the error, apologized, and withdrew the allegation. Nonetheless, the Claimant was awarded £75 000 in damages. The Defendants in both cases challenged the judges’ assessment of damages. The appeal in Cairns was dismissed; the award was proportionate to the gravity of the allegations made against Mr. Cairns. In KC, however, the award of damages was reduced to £50 000 in the light of the fact that the Claimant had retained his anonymity throughout and the falsity of the allegation was recognized and publicly corrected at a very early stage.
Cairns v Modi
The Claimant, Chris Cairns, is a well-known cricketer. The Defendant, Lalit Modi was also a high profile figure in cricket world, having occupied several high profile positions in the Indian Premier League. In January 2010, he took to Twitter to accuse Mr. Cairns of match-fixing. The message was tweeted to 65 people.
This accusation was then picked up by the cricketing website Cricinfo which repeated the allegation under the headline “There is No Place in the IPL for Chris Cairns”.
Mr. Cairns sued in respect of both publications. He settled with Cricinfo, receiving £7,000 in damages and approximately £8,000 in costs. mr Modi, however, defended the action at trial, pleading justification.
Mr. Justice Bean, ( EWHC 756 )QB)) found that the allegations against Mr. Cairns had not been proven and awarded him £75, 000 in general damages and an additional £15, 000 to reflect the “sustained and aggressive assertion” of the plea of justification.
In particular, the Judge stated that he took into account:
(1) The seriousness of the allegation – as going to the core attributes of a professional cricketer – although not the most serious of allegations ’
(2) The extent of the publication – 65 publishees for the tweet and 1, 000 for the Cricinfo publication ;
(3) The settlement of the Claimant’s action against Cricinfo for £7,000 .
He further held that “vindication in the judgment” was of marginal effect .
Issues on Appeal
Mr. Modi sought permission to appeal both on liability and on the assessment of damages. His grounds of appeal were that:
(1) The Judge failed properly to take into account, as required by s. 12 of the Defamation Act 1952, the totality of the compensation obtained by the Claimant in respect of the Cricinfo publication; he ignored the positive publicity obtained by the Claimant from Cricinfo as part of his settlement;
(2) The Judge erred in law in assessing basic damages at £75, 000; the award was excessive. The Judge failed to take proper account of the very limited circulation of the Twitter publication and the extent of the vindication provided by his own reasoned judgment on the merits.
Permission was not granted for an appeal on liability and so the question of damages was the sole issue before the Court of Appeal.
The Court of Appeal (Lord Judge LCJ, Lord Neuberger MR and Mr Justice Eady) rejected Mr. Modi’s appeal, holding that the award was indeed proportionate to the seriousness of the allegation and necessary to effect appropriate vindication. 
After noting that the assessment of damages in libel actions was not “quasi-scientific” and that there is “rarely a single ‘right’ answer”, the CA considered that greater consistency and predictability in libel awards had been effected by the existence of a maximum amount for damages (currently £275,000), comparison with the scale of damages awarded in personal injury cases, as well as presenting figures from earlier libel awards to a jury. .
It was accepted that the readership of the Tweet was relatively narrow, appealing to those with a particular interest in cricket. However, the court went on to hold that there was a “percolation phenomenon” inherent in online media which meant that the true reach of the publication would be far wider than just the original publishes. This was a relevant factor which the trial judge rightly took into account when assessing damages. 
In relation to vindication, the Court rejected the argument made on behalf of Mr. Modi that as a general principle, damages should be lower following trial by judge alone – where a reasoned judgment will be given which serves as significant vindication in itself – as compared with verdicts given by a jury. The Court did not go into detail on this point than to say that, while there will be some occasions where the judgment itself is sufficient vindication, this was a fact specific question and it is more often the case that members of the public would be more interested in the “headline result” or “how much did he get?” In this regard, the global media attention which this case attracted meant that “it would be safe to assume that such a person would only be convinced by an award of some magnitude.” [30-32]
Counsel for Mr. Modi had also argued for a more reasoned, analytical approach to the assessment of damages in libel actions, more akin to that taken by the Employment Tribunal in the context of sex and race discrimination. A breakdown of damages according to bands of compensation would provide greater consistency in libel law. This argument, too, was rejected. The CA foresaw “practical difficulties” with such an approach in an area where “compensation is well established, and in any event is multi-layered, and in the overwhelming majority of cases goes well beyond the assessment of compensation for injury to feelings arising in discrimination cases.” [36-37]
Finally, the Court considered the impact of the Cricinfo settlement, which had not been expressly addressed by the trial judge. It held that this was of very limited significance, the source of the allegations being Mr. Modi himself and given that he had persisted in his claim that the allegations were true, had never given the apology which was required.
For all these reasons, the appeal was dismissed.
KC v MGN Ltd
KC is the father of the child known as “Baby P”. He was falsely accused by the People of being a convicted child-rapist. He was in fact a man of good character who had played no role in the abuse or ultimate death of his son.
The words of the article were never accessible online and KC remained anonymous. The newspaper acted quickly once the error was drawn to its attention by KC’s solicitor. An apology was printed the following month on page 2 and an offer of amends accepted the month after that. No amount of compensation could be agreed between the parties and so Mr Justice Bean was asked to make an assessment in accordance with s. 3(5) of the Defamation Act 1996.
He did so in two stages: first, fixing a starting point figure of £150, 000 and second, making an appropriate reduction (assessed at 50%) to take account of all mitigating factors, including the willingness to use the offer of amends procedure. The sum of £75,000 was awarded ( EWHC 483 (QB)).
Issues on appeal
MGN challenged the first part of the trial judge’s assessment, claiming that the starting point of £150, 000 was excessive and insufficient weight had been given to (1) the fact that KC has retained his anonymity throughout; and (2) the fact that the falsity of the allegation was recognised and publicly corrected at a very early stage.
Judgment on appeal
The Court first considered the operation of the offer of amends regime created by ss. 2-4 of the Defamation Act 1996. Although some argument had been made as to the artificiality of arriving at a notional starting point of damages as if no offer of amends had been made, there was no real doubt as to the well-established two-stage assessment process under this regime.
The primary focus of the judgment was on the relevance of KC’s anonymity and the absence of any explicit indication of how it had been taken into account by the trial judge in the context of the scale and impact of publication. 
The Court held that, while some readers of the article would have been able to identify KC as Baby P’s father, it could not be said that “a very substantial proportion of those who buy and read The People would have had the slightest idea of KC’s identity, or his link with Baby P.”  Too much weight had been placed on the newspaper’s large circulation and readership figures rather than the more limited circulation which would have impacted on KC’s reputation. This case was different from that of Mr. Modi who had been subject to a far greater degree of publicity and media attention. However, had
“the circumstances of publication and the conduct of the defendant in this case […] approximated to that of Mr Modi, with all the attendant publicity, directly and expressly repeating that KC was a sexual predator, and identifying him, or providing the means for his identification, an award of £150,000 might have been inadequate.” 
This was not the case, however, and the starting point was reduced to £100,000. The reduction percentage remained the same and KC’s damages were reduced to £50,000.
The basis on which libel damages are assessed has always been obscure. Unlike employment law or even personal injury cases, the manner in which judges assess the financial sum to compensate for a person’s damaged reputation lacks consistency and transparency. Unfortunately, the Court of Appeal’s judgment does not go very far to improve matters.
What is striking about both cases is the importance placed on the perceived publicity received by the claimants. While Mr. Cairns was subject to a serious allegation – although one admittedly far less serious than KC – the readership was very limited indeed. Nonetheless, the Court of Appeal felt able to infer from the use of online media to spread the allegation that it would be more likely to “go viral” thus attracting a far wider publication than those who actually read it. It is difficult to see how Mr. Cairns can be said to have suffered damage because online methods of communication make it easier for allegations to be repeated and republished (where there was no evidence that there had actually been wide circulation of the Twitter allegation).
By contrast, the very serious allegation about KC was published in a newspaper with an extremely wide readership. However, the fact of his anonymity meant that the number of people who would actually identify him as Baby P’s father very limited. This reasoning has obvious force: where a person is not actually identified by an article, albeit one with wide readership, this should be taken into account when assessing the actual damage his reputation has suffered. There does nonetheless seem to be some inconsistency between this approach and that taken in relation to Mr. Cairns where the actual readership was also very limited, although of course he was identified by name.
It is also of note that the Court expressly held that it was the “headline result” rather than the reasoned judgment which would normally provide vindication. Put shortly, size matters. Given the importance the Court places on damages, it is perhaps disappointing that it rejected really because of “practical difficulties” a more reasoned, transparent approach to their assessment. Admittedly, a multitude of factors are at play when compensating an individual for damage to his reputation but it is difficult to see how the same is not true in, for example, discrimination cases. These cases demonstrate that the amount of libel damages remains of central importance in the digital age – and that it remains very difficult to understand how a court is going to assess them.