Full case report

Brett Wilson LLP v Persons Unknown

Reference [2015] EWHC 2628 (QB)
Court High Court (Queen's Bench Division)

Judge Warby J

Date of Judgment 16 Sep 2015


Summary

Libel – s. 1(2) Defamation Act 2013 – serious financial loss – damages – injunction – summary disposal


Facts

C was a solicitors firm which had acted for the claimants in litigation against Rick Kordowski relating to the website which he set up at www.solicitorsfromhell.co.uk. The firm itself had been targeted by a variant of the original website, SFHUK.com, operated by D.

The claim was for damages in libel and an injunction, firstly in respect of the listing of C as one of the “Solicitors from hell”. Second, it was in respect of words specifically referring to the firm in a letter of complaint which accused the firm of seeking to charge three times the quoted fee for a letter and, when the client refused to pay, unjustifiably threatening legal action and engaging in a campaign of harassment.

D had been duly served by the alternative method of emailing the documents in the proceedings to addresses connected to SFHUK.com. D did not apply to set aside the order giving permission and did not acknowledge service.

C then issued an application seeking default judgment pursuant to CPR 12.3(1) and 12.4(2), and summary disposal of the case pursuant to s. 8 of the Defamation Act 1996 (“the 1996 Act”) with damages, an injunction and costs.


Issue

(1) Was it right to hear and dispose of C’s application in the absence of D?

(2) Were the conditions for obtaining judgment in default of acknowledgement of service met, and was C entitled to judgment on its statement of case?

(3) Did the court have jurisdiction under s. 10 of the Defamation Act 2013 (“the 2013 Act”)?

(4) Were the words complained of defamatory of C within the meaning of s. 1 of the 2013 Act?

(5) Should prohibitory and mandatory injunctions against the Ds be granted?

(6) Was C entitled to damages under the summary disposal procedure pursuant to ss. 8 and 9 of the 1996 Act?


Held

(1) J accepted C’s submission that he should follow the approach identified in Sloutsker v Romanova [2015] EWHC 545 (QB), and that he should have regard to s. 12(2) of the HRA 1998. He was satisfied that C had taken all reasonable steps to notify D and that D had in fact had notice and an adequate time to respond. He drew the inference that D was hiding to avoid engaging with the court process.

(2) The conditions for obtaining judgment in default of acknowledgement of service prescribed by CPR 12.3(1) were met and the court was able to proceed on the basis of C’s unchallenged Particulars of Claim. There was no feature of the case that required the court to consider evidence and it could proceed on the basis of the pleaded case.

(3) D was described in the title to the action as persons “responsible for the operation and publication of” SFUK.com and in similar terms in the Particulars of Claim. S. 10 of the 2013 Act provides that the terms “author”, “editor” and “publisher” have the same meaning as in s. 1 of the Defamation Act 1996. It was likely that D would fall outside of the scope of the term “publisher” as defined by s. 1 of the 1996 Act. C had not alleged that D was an author of the words complained of, but J was satisfied that D was within the definition of “editor” in the 1996 Act and that the court had jurisdiction.

(4) J noted that the statutory term under s. 1(2) of the 2013 Act is “financial loss” not “financial harm”. In the event enough was alleged in the Particulars of Claim as a whole to satisfy the court that the requirement was met. C relied in its Particulars on: its status as a boutique firm which attracted considerable work from the internet; the appearance of an entry on SFUK.com in the top five search results in Google over six months; the inevitability of a loss of work from prospective clients; a litigation opponent having raised the publication in correspondence; the withdrawal of a prospective client as a result of the publication; the inference that there will have been instances where an individual had read the publication and not notified C; and C’s belief that there had been a noticeable drop in the conversion of enquiries to instructions.

J noted C’s reliance in two instances on statements of belief rather than fact, but the pleaded allegations were enough overall to make out a case of serious financial loss. Serious is an ordinary English word, and whether loss is serious must depend on the context. This was enough to justify judgment for damages to be assessed. It was not necessary for that purpose to allege falsity, although the Particulars did so.

(5) The pleaded allegations made out a case for the grant of both prohibitory and mandatory injunctions against the Ds. It was alleged that D had published false allegations of a highly defamatory nature, which had caused serious financial loss and that they were continuing to do so. This was not contested by D. J was satisfied that the relief represented a necessary and proportionate interference with freedom of expression.

(6) The little used procedure for summary relief, for which damages are capped at £10,000, was invoked in order to bring a swift end to the matter and avoid assessment proceedings. C was entitled to an award of the maximum sum available by way of damages under the procedure. C relied on evidence from a digital marketing company about the number of individuals who had searched for it during the period of publication of the words complained of.

The words had a clear tendency to put people off dealing with C, and that was their purpose. The allegations were serious and would be likely to deter anyone unfamiliar with the firm from engaging it. There was evidence that one client probably was deterred with probably financial loss. The grapevine effect of online publication meant that the defamatory messages were likely to have been conveyed to substantially larger numbers. There had been a financially damaging impact on a serious scale and the award needed to serve the purpose of vindication. £10,000 was amply merited on the facts of the case.


Comment

S. 1 of the 2013 Act is the most significant and perhaps least straightforward reform introduced by the legislation. This is the first decision to consider s. 1(2), and what is necessary to satisfy the requirement that it contains for a corporate claimant to show serious harm which has caused or is likely to cause serious financial loss. The judgment indicates that this hurdle is not as challenging as it seems. The court took a holistic approach to the allegations of damage pleaded by C, holding that, while a mere belief that financial loss had been caused may be insufficient to grant judgment, the other features of the pleaded case were collectively enough to meet the requirement.

While C here may have been unusual in having evidence of a particular prospective client who withdrew an instruction with reference to the allegations, the other features relied on were essentially no more than consequences that many in C’s position will be in a position to point to where defamatory publications about a company persist on the internet. Once the requirement to show serious financial loss was met, damages were then at large, as is conventional in defamation.

Other aspects of the judgment, relating to the court’s jurisdiction and to injunctions, may be relevant more generally to claimants facing the increasingly common situation of an anonymous online campaign of vilification.


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