Sparking the claim flame

Solicitors routinely write letters on behalf of clients which make serious allegations against third parties. These allegations may be of infringement of intellectual property rights, violent behaviour in family cases or even, possibly, illegal activity. In these cases, solicitors will normally take the precaution of hiding behind the phrase 'we are instructed by our clients that'¦' before setting out a damaging allegation, which may or may not be true. If the allegation turns out to be false, does the solicitor have any defence to a defamation claim, assuming that the other necessary ingredients for a defamation claim are present? The answer is far from clear in every instance, as a recent case shows.

Defamatory claim

In the case of Creative Resins International Limited v Glasslam Europe Limited [2006] EWHC 3159 (QB), allegations were made in a letter before action, sent by solicitors for Glasslam to Creative Resins in September 2004. In that letter, it was alleged that Creative Resins had infringed Glasslam's intellectual property rights, that Glasslam (or its US parent company) had had to obtain an injunction against Creative Resins in the past in Germany, showing that Creative Resins was a habitual infringer, and that the process that Creative Resins was selling to make decorative glass products had a defect which caused the product to crack after a period of time. Creative Resins could not complain that this letter was libellous as it had only been published to them. However, a copy of the letter was sent by Glasslam's solicitors to a potential customer of Creative Resins. That customer had previously been a customer of Glasslam and Glasslam was clearly concerned that the customer would take its custom to Creative Resins.

To put this matter into context, it should be explained that Glasslam had been making similar allegations within the decorative glass industry for several years as well as making allegations that Creative Resins had infringed various of their patents. Creative Resins had previously adopted a strategy of ignoring such allegations, although solicitors had written on their behalf to Glasslam in 2003, refuting allegations of infringement of intellectual property rights and the issue of alleged proceedings against Creative Resins in Germany.

Repeating the allegations

When the allegations were repeated and enlarged on by Glasslam's solicitors in 2004, Creative Resins decided that enough was enough and that proceedings should be issued unless undertakings not to repeat the allegations were given. At this time it was also discovered that there was an article available on the web from a US trade magazine which continued to publish the original allegations about infringement and German legal proceedings. That internet publication arose from a press release put out by the owner of Glasslam, Stephen Howes, a resident of the United States. Letters before claim were sent to Glasslam, their solicitors and Howes, but no undertakings were given. Libel proceedings were therefore issued and served by Creative Resins on all three defendants.

Glasslam's solicitors, DMH, took the position that as the allegations had been made by them on the instructions of their client, they were clearly protected by qualified privilege. Reliance was placed on old law, as repeated by the Court of Appeal in Waple v Surrey CC [1998] 1 WLR 860 where it was said: 'The ordinary rule is that letters written by a solicitor in the performance of his or her duties to a client of the firm attract qualified privilege (Baker v Carrick [1894] 1QB 838) and this is a free-standing privilege of the solicitor who is not infected by the malice of the client.'

However DMH did accept that their defence of qualified privilege might be defeated by Creative Resins showing malice on behalf of DMH. What would have to be shown by Creative Resins to establish malice was that DMH had published the allegations knowing that they were false or recklessly not caring whether they were true or false.

The matter proceeded to a contested application by DMH to strike out the claim against them or for summary judgment on the basis that the claim against them could not succeed. The application was made only by DMH and not by Glasslam (who had been their client but no longer instructed DMH at the time of the application). It was said on behalf of DMH that their ability to make out a defence of qualified privilege was made more difficult by Glasslam's refusal to waive privilege in the correspondence passing between DMH and Glasslam.

The application came before Tugendhat J when Creative Resins' principal argument was that although solicitors' letters are usually protected by qualified privilege, in this case, DMH and their client had overstepped the mark by publishing seriously defamatory allegations which could not withstand the most basic probing of their truth or falsity. By failing to act as responsible solicitors in that they had published allegations without carrying out basic checks which would have revealed that the allegations were false, they had been recklessly indifferent to the truth. As well as Creative Resins' argument as to malice, it was also argued that, even if the publication had occurred on an occasion of qualified privilege, the defamatory allegation were irrelevant to the main issue addressed by the letters, namely, alleged copyright infringement. Irrelevant allegations can take the words complained of outside the protection of the privilege.

Conduit pipe metaphor

A further submission by Creative Resins was that a solicitor must not make himself 'a conduit pipe for every defamatory allegation of a chagrined or indignant client'¦ he is bound to exclude anything defamatory that is not relevant to the occasion.' The metaphor of the conduit pipe comes from an Irish decision McKeough v O'Brian Moran [1927] Ir R 348. However, a solicitor's duties to his client in carrying out his client's instructions were considered recently by the Court of Appeal in Regan v Taylor [2000] EMLR 549. In Regan, May LJ said that a modern solicitor should not be seen as a mere channel of communication. He may be called on to make communications whose content may in part be derived from his own experience, rather than from direct instructions from his client.

In his judgment, in which he refused to strike out the claim against DMH, the judge said that at that stage of the proceedings he was not in a position to form a view as to the likely findings of fact. However, if Creative Resins were to be right on the facts, then there would be questions to be asked as to how DMH came to write the letters in the form in which they were, if, as was arguably the case, DMH had what might be inadequate instructions for that purpose. The judge went on to say that it was not unrealistic to consider the possibility that Glasslam might wish to waive privilege in its correspondence with its client, which might make the resolution of the issues more or less difficult. He continued by saying 'the position of the solicitors in this case could raise questions of some difficulty as to matters both of law and fact'.

The judgment does not therefore give definitive guidance as to the possible liability of solicitors (or indeed other professional advisors), for defamatory words published by them in correspondence on their clients' behalf. However, what is fairly clear is that if solicitors rely only on their clients' instructions, where serious allegations are being made, and have made no attempts to corroborate their clients' instructions, then they stand a real risk of being joined to subsequent defamation litigation.

Case post-script

There is an interesting post-script to the case against the solicitors. The action continued to trial against Howes, the case having settled against the other defendants. Although Howes did not appear and was not represented at trial, the claimant still had to prove its case, which it duly did. In his judgment, Mr Justice Eady held that 'It is manifest that there is no truth in the allegations which have been published and persisted in for some time.' The judge went on to deal with Howes' defence of qualified privilege, saying: 'I see no basis for publication on the widespread scale which took place which could fall within any doctrine of qualified privilege. There was no duty and no legitimate interest which would justify publishing these words on that scale. In any event, the claimant has sought to meet the plea with an allegation of malice. If, contrary to my ruling. there was an occasion of qualified privilege, I have no doubt that it would be defeated by malice, because the evidence discloses quite clearly, as I have already said, that the allegations contained in the publication were totally false. It is inconceivable that [Howes] was unaware of the falsity and the publication of those words, therefore, took place cynically and dishonestly.'

Difficult position to defend

It must be pointed out that DMH never acted for Howes and that Howes' knowledge of the falsity of the publication cannot be imputed to DMH. However, had the action gone to trial against DMH and the same finding been made against Howes and Glasslam, it would undoubtedly have made the solicitors' position more difficult to defend. If a solicitor's client is held to have acted cynically and dishonestly, it will be a heavy burden for solicitors to establish that they were not themselves reckless in publishing false statements if they cannot show that they took steps to satisfy themselves that the allegations were true. In this case, one of the main allegations was that proceedings had been commenced in Germany against Creative Resins. Checking a matter of fact like this should be straightforward. Solicitors, and other professional advisers, who pass on damaging information from their clients without checking, or at least making serious attempts to verify, that information stand a real risk of being held to be reckless in so doing and may be deprived of a defence of qualified privilege in subsequent defamation proceedings.