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The Defamation Act 2013: what is serious harm?

02 September 2014 #Dispute Resolution #Crisis Management


The Defamation Act 2013 (the “2013 Act”) introduced a requirement that a statement must have caused (or be likely to cause) serious harm to the Claimant`s reputation for that statement to be defamatory. In order to show serious harm, a business (defined as a body that trades for profit in the 2013 Act) has to show that it had suffered, or was likely to suffer, significant financial loss as a result of the publication of the defamatory material. The relevant section of the 2013 Act came into force on 1 January 2014 and only applies to allegedly defamatory statements made since that date.

The recent case of Cooke and MGN Ltd [2014] EWHC 2831 (QB) is instructive as it is the first time that the High Court has considered the question of what constitutes “serious harm” under the 2013 Act.

The case

The Claimants were a Housing Association called Midland Heart (M) and M’s chief executive, Ms Cooke (C). M and C sued the Sunday Mirror (X) over an article X had published on 26 January 2014 about the popular Channel 4 series “Benefits Street”. The three page article was primarily about Mr Nischal who owned a number of properties in the street that was the focus of the Channel 4 programme and rented them out for considerable personal gain. The article went on to say that:

“Three more homes in the road where residents claim they have been portrayed as scroungers and lowlife by Channel 4 are owned by the Midland Heart housing association. Its chief Ruth Cooke, 45, earns £179,000 a year and lives in a large house in Stroud, Glos.”

M and C did not dispute the facts as reported in the above section but alleged that, in context, the article was defamatory. The article appeared online but, following an exchange of correspondence between the parties, it was deleted and X published an apology a week after the publication of the article.

The preliminary issues

The Court was asked to determine two preliminary issues:

  1. The defamatory meaning of the words, particularly in the context of the entire article; and
  2. Whether the article had caused “serious harm” to the reputations of C and/or M within the meaning of the 2013 Act

1. Defamatory meaning

The Judge, applying the test set out in Slim v Daily Telegraph Ltd [1968], held that the natural and ordinary meaning of the words in question was that:

  1. M, whose chief executive is C, is one of the well-off landlords of rented properties on James Turner Street who let houses to people in receipt of housing benefit at rents of up to £650 per month, thereby making money from the misery of James Turner Street residents
  2. C is personally responsible for this conduct of M, and has herself profited and become rich from it, in that she is paid £179,000 a year and lives in a large house in Gloucestershire.

2. Whether serious harm had been caused

In relation to the question of serious harm, X accepted that M was a non-profit organisation and therefore the additional requirement to show serious financial loss as a result of the publication of the article did not apply. However, the Judge did note that this could be relevant to the issue of serious harm.

It was common ground that C and M had not adduced any evidence that they had suffered serious harm to their reputations at the date of the issue of proceedings. In addition, neither C or M could adduce any evidence of financial loss specifically attributable to the article. The Court therefore focussed on the likelihood of serious harm being caused in the future. C and M claimed that the article was “bound to cause” serious harm to their reputations as a result of the “hundred of thousands of people that had read X’s article” and who would have thought less of C and M as a result. However, the Judge held that such harm could not be inferred from the meaning of the words. Harm can be inferred for certain statements, such as where an individual is wrongly accused of being a paedophile or a terrorist, but not in this case.

Furthermore, the Judge decided that the apology published seven days after the article was sufficient to eradicate or at least minimise any unfavourable impression of M or C created by the original article in the mind of the hypothetical reasonable reader who read both. That left a residual class of readers of the original article who had not read the apology. Importantly, the apology was now far more accessible on internet searches than the original article.

Conclusions

The case is a useful indicator to would-be Claimants that the bar for proving that a statement is defamatory has been set high. The purpose of the introduction of this section in the 2013 Act was to reduce the number of “trivial” claims and so this Judgment reinforces that purpose.

Defendants should also take heed of the considerable weight the Court attached to the prominent apology published shortly after as a way of mitigating the potential Claimant’s losses and thereby preventing the “serious harm” from occurring.  

Clarkslegal, specialist Dispute Resolution lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Dispute Resolution matter please contact Clarkslegal's dispute resolution team by email at disputeresolution@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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