Reynolds revived

The House of Lords' decision in Jameel v The Wall Street Journal Europe [2006] UKHL 44 demonstrates the flexibility and advantages of common law over statute in the development of our law in two specific respects. Firstly, the Lords have upheld (by a three to two majority) the rule in South Hetton Coal Co Ltd v North Eastern News Association Ltd [1894] 1 QB 133, that a trading company is able to sue for libel 'per se' and that it is unnecessary to prove special damage. Secondly, they have refreshed the rule in Reynolds v Times Newspapers Ltd [2001] 2 AC 127, the case that built on the traditional foundations of qualified privilege but developed the law by introducing a wider qualified privileged defence for the media. The euphoria it generated at the time evaporated following an increasingly narrow interpretation of the rule. In Jameel, the Lords have restated the principles, underlining the liberalisation of the duty/interest test in relation to the media.

Background

The libel action was brought by Mohammed Jameel, the general manager and president of the second claimant, Abdul Latif Jameel Company Ltd, over an article in the Wall Street Journal, published on 6 February 2002, which alleged an investigation into various bank accounts entitled 'Saudi Officials monitor certain bank accounts', with a smaller sub-heading 'Focus is on those with potential terrorist ties'. It referred to the Saudi Arabian Monetary Authority acting at the request of the US law enforcement agencies and alleged it monitored bank accounts associated with some of the country's most prominent businessmen to stop potential funding (intentional or not) of terrorist organisations. A number of companies and individuals were named and among them were the Jameel Group of Companies, who, it was said, could not be reached for comment. The article was published only five months after 9/11, at a highly sensitive time when the US authorities were particularly anxious to track down any associates of Al-Qaeda.

The action came for trial before Eady J and, following lengthy evidence, the jury found that the article was defamatory of both claimants, awarding £30,000 and £10,000 respectively. The twin defences of no damage and the Reynolds defence were rejected. The Court of Appeal upheld the awards and the paper appealed.

Damage: no change to the existing rule

Lords Bingham, Scott and Hope followed South Hetton. Lord Hoffman and Baroness Hale dissented.

Lord Bingham referred to the grounds for objecting to companies being treated in the same way as an individual, including the fact that the Faulks Committee on Defamation in its report (Cmnd 5909, March 1975) recommended that a company should have to prove actual special damage or a likelihood that damage would be caused by a libel and to comparison between the position of a local government authority with a trading corporation (a local government authority being unable to recover damages'“ see Derbyshire County Council v Times Newspapers [1993] AC 534). He rejected both arguments.

He also decided that the rule was not an unreasonable restraint on freedom of speech and therefore an infringement of Art 10. Nor was it inconsistent with it as the national authorities were free to decide, quoting Steel v Morris (2005) 41 EHRR 403. As for the argument put by the appellants that the ability to recover damages per se had a chilling effect on press freedom, this was 'exaggerated'. He observed that the tort of defamation existed to afford redress for unjustified injury to reputation. 'The good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even its own staff, make people less ready to deal with it, less willing or less proud to work for it.' Accordingly, on balance, a company should be no different from an individual, even though it had no feelings.

Lord Hope agreed, saying that a change in the law was neither necessary nor desirable and there was no good reason for trading companies to be treated differently from the rest. A libel action enabled the claimant to challenge the truth of the allegation 'to nail the lie'. A condition of proving special damage would defeat that.

Lord Scott in discussing Art 10 opined: 'The right of freedom of expression was never intended to allow defamatory statements whether of individuals or companies to be published with impunity.' He was concerned that companies having to prove damage was problematical in relation to the establishment of causation and to prove special damage the difficulties would be 'insuperable'. He was very much alive to the brand value of a company. It might not have feelings, but it certainly had assets of positive value attaching to the company from sponsorship and other activities, all of which were capable of protection.

Lord Hoffmann and Baroness Hale dissented. Lord Hoffmann said a commercial company had no soul and its reputation was no more than a commercial asset. Claims should be treated in the same way as malicious falsehood actions. Baroness Hale, with whose judgment Lord Hoffmann agreed, suggested that these days the dividing line between government and non-governmental organisations was increasingly difficult to draw: 'The freedom to criticise them may be at least as important in a democratic society as the freedom to criticise the government.'

Reynolds reborn and revived

In Reynolds, the House of Lords removed the need to insist on a reciprocity of duty and interest for a successful qualified privilege defence, extending the protection to allow neutral investigative journalism where it could be shown that there was a public interest in publication. At least that was the intention. In Jameel, the Lords were critical of the way judges had interpreted the ten factors enumerated by Lord Nicholls in Reynolds to be taken into account in deciding whether the defence was available. They unanimously found that the approach adopted by judges and, in this instance, by the Court of Appeal, was too narrow. Lord Bingham described the Court of Appeal judgment as 'subverting the liberalising intention of the Reynolds decision'. He found the article was the sort of 'neutral investigative journalism which Reynolds privilege exists to protect'.

Lord Hoffmann described the Reynolds defence as the 'Reynolds public interest defence' and applied three requirements: (i) the public interest of the material; (ii) the inclusion of the defamatory statements being necessary; and (iii) the test of responsible journalism.

He interpreted these requirements on the basis that the initial question of public interest, if answered in the affirmative, presumed the existence of a duty and interest, and it was a matter for objective determination by the judge considering the article as a whole and not isolating the defamatory statement. He emphasised the need to make an allowance for editorial judgment in including it. Responsible journalism was not subjective, nor was it vague, as suggested by Eady J. He stressed that the Nicholls tests were not tests that a publication had to pass. 'In the hands of a judge hostile to the spirit of Reynolds, they can become ten hurdles at any of which the defence may fail.'

His fellow judges agreed. Baroness Hale declared that the Reynolds defence was 'a different jurisprudential creature' from the law of privilege, although it was a natural development of that law. She found that two conditions were necessary: a real public interest in communicating/receiving the information; and responsible verification of that information. She concluded: 'We need more such serious journalism in this country and our defamation law should encourage rather than discourage it.' Lord Scott, while disagreeing that Reynolds was a different jurisprudential creature from traditional privilege, said that the expression 'responsible journalism' had been usefully coined as a succinct summary of the circumstances when such a defence could be relied upon. Lord Hope said the article as a whole, and taken overall, had 'all the hallmarks of responsible journalism'.

A more liberal interpretation

The striking importance of the decision in Jameel for the media on Reynolds cannot be overestimated. It amounts to a direction to our judges to be more liberal in their application of the Reynolds test. The Nicholls guidance was intended to be just that, not an inflexible body of rules. The Lords have given a rap on the knuckles to first instance judges and the Court of Appeal for being too strict in their application of the test.

For the media, this case amounts to déjà vu. Having celebrated Reynolds, they then found themselves questioning whether Reynolds was quite the ground-breaking decision it had been thought. But they were right all along. Reynolds is ground-breaking and Jameel has underlined that fact. Investigative journalists can celebrate again.

The sting in the tail is that the Jameel judgment means companies still remain on a par Jameel with individuals and no special damage claim will be required in libel actions.

Following the judgment of their Lordships in Jameel editors and journalists should still apply the Nicholls guidelines but in the knowledge that not all of them have to be complied with. Each article depends upon its particular merits.

In so far as there are hurdles to leap, the most important one is to establish that the article is in the public interest, in which case, following Lord Hoffmann's test, 'the duty and interest are taken to exist'. Thereafter, a decision has to be made as to whether or not any defamatory statement was in fact justifiable, as an objective test. Editorial judgment should be about the article as a whole rather than nit-picking at particular sentences or phrases. The Lords recognised the realities faced. Provided that the article is professional and responsible, as opposed to casual, cavalier or slipshod, then the defence should succeed. An inability to prove the truth of a statement will not be a bar to a successful Reynolds defence and there will always be circumstances where it may not be possible to verify everything.

On any view, the House of Lords has refreshed and revived, if not resurrected the intentions and purpose of the original Reynolds decision, in a welcome nod to the freedom of the press.

Copyright & permissions