Full case report

Cruddas v Calvert (CA)

Reference [2015] EWCA Civ 171
Court Court of Appeal (Civil Division)

Judge Jackson LJ, Ryder LJ, Clarke LJ

Date of Judgment 17 Mar 2015


Summary

Defamation – libel – justification – malicious falsehood – malice – single meaning rule – damages


Facts

The Claimant was the former Treasurer of the Conservative Party. On 15 March 2012 he had been made the subject of subterfuge and covert video recording by the First and Second Defendants (members of the Insight team of The Sunday Times) who posed as potential donors to the Conservative Party.

The Claimant sued on the articles published on 25 March 2012 by the Defendants, bringing claims for libel both and malicious falsehood. The Court ruled that the Articles meant:

(1) in return for cash donations to the Conservative Party, the Claimant corruptly offered for sale the opportunity to influence government policy and gain unfair advantage through secret meetings with the Prime Minister and other senior ministers (the “cash for access” meaning);

(2) the Claimant made the offer, even though he knew that the money offered for secret meetings was to come, in breach of the ban under UK electoral law, from Middle Eastern investors in a Liechtenstein fund; and

(3) further, in order to circumvent and thereby evade the law, the Claimant was happy that the foreign donors should use deceptive devices, such as creating an artificial UK company to donate the money or using UK employees as conduits, so that the true source of the donation would be concealed.

These meanings were (a) the single meaning of the Articles for the purposes of the claim in libel; and (b) meanings which a substantial number of reasonable readers of the Articles would have understood the words to bear for the purposes of the malicious falsehood claim. In addition, and as affirmed by the Court of Appeal, meaning 1 also had a second, graver variant for the purpose of the malicious falsehood claim (to which the single meaning rule does not apply) in which the allegation of corruption connoted criminal corruption. It was accepted that this second version of meaning 1 was untrue.

The Defendants sought to defend the libel claim with a plea of justification. In relation to the malicious falsehood claim, the Defendants denied malice, relied upon their justification defence to rebut falsity of the allegations (apart from criminal corruption) and contended that the publication was not likely to cause the Claimant pecuniary damage within s.3 Defamation Act 1952.

At trial Tugendhat J found for the Claimant on both the libel and malicious falsehood claims. All three meanings were false. The appropriate sum in libel damages was £180,000 (including £15,000 aggravated damages). Both journalists were found to be malicious on the basis that they knew that the meanings conveyed by the Articles were false and that they had a dominant intention to injury the Claimant. The Claimant met the conditions for s.3 Defamation Act 1952: As an approved person under the Financial Services legislation and regulated by the FSA, the publication of the allegations against the Claimant was likely to cause at least an investigation into the Claimant by the FSA and that the Claimant would have incurred the substantial costs of dealing with that. Given the size of the award for the libel claim, the Judge did not make a separate award for the malicious falsehood claim.

The Defendant appealed.


Issue

1) For the purposes of libel was meaning 1 true?

2) Were the Defendants liable in malicious falsehood in relation to the first meaning (in either its true or second version)? In addressing whether the journalists acted with malice: What constitutes malice when the dominant meaning is true, but an alternative “incorrect” meaning which (foreseeably) some cynical readers would understand is not true?

3) Were the Defendants liable for (a) libel and/or (b) malicious falsehood in relation to meanings 2 and 3?

4) If the Claimant succeeded on one or more of the above issues, what should the measure of damages be and should an injunction remain in place?


Held

1) The “cash for access” meaning was substantially true. The Judge had erred. On a proper analysis of the transcript and recording the Claimant was effectively saying that if the journalists donated large sums they would have the opportunity to influence Government policy, and gain unfair commercial advantage through confidential meetings with the Prime Minister and other senior ministers. This was unacceptable, inappropriate and wrong.

2) As the true meaning of meaning 1 was substantially true, the question of malice only arose in respect of version 2 of that meaning – that of criminal corruption – which some readers would interpret as the meaning of the articles. In these circumstances, where the journalists intended to convey the true meaning, their awareness (which Tugendhat J found) that some cynical readers would interpret the articles in the second, untrue, way, did not constitute malice for the purposes of malicious falsehood. Since the test for malice is subjective, knowledge of falsity must be assessed by reference to the meaning which the Defendant intends to convey. This represents the proper balance between the journalists’ rights under Article 10 ECHR and the individual’s rights under Article 8. If it were otherwise, journalists would have expressly to disavow every foreseeable interpretation of what they wrote, which would have a chilling effect on free speech. The Defendants cannot have had a dominant intention to injure the Claimant in respect of meaning 1 if they knew that the primary meaning (the single meaning for libel purposes) was true.

3) a) The Judge was correct, the Defendants failed to justify meanings 2 and 3 and were therefore liable in libel. Section 5 Defamation Act 1952 did not avail the Defendants; meanings 2 and 3, relating to the commission of a criminal offence and the use of a loophole to evade the criminal law, materially injured the Claimant’s reputation even though meaning 1 was true.

b) There was no basis for overturning the Judge’s finding that the journalists were malicious. The Third Defendant was vicariously liable for the malice of the First and Second Defendants. Therefore the Defendants were liable in malicious falsehood.

4) The proper measure of damages for the Claimant for libel in relation to meaning 1 was £50,000 (£43,000 in general damages and £7,000 in aggravated damages). In making the assessment the court considered how the damages awarded at trial should be split between meaning 1 and meanings 2 and 3, and the mitigating impact of the Defendants having justified meaning 1 (Pamplin v Express Newspapers Ltd [1988] 1 WLR 116). The injunction in relation to meaning 1 was discharged, that in relation to meanings 2 and 3 remains in place.


Comment

Of particular interest in legal terms is the approach to (and arguably limitation of) the decision in Ajinomoto Sweeteners  Europe SAS v Asda Stores Ltd [2011] QB 497. The Court seems clear that despite the fact that the single meaning rule does not apply in malicious falsehood, a defendant will only be liable if (a) the falsehood in question is one of the possible “correct” meanings of the defendant’s words and (b) the defendant intended to convey that falsehood. The Court thought it would be bizarre in the circumstances of this case if the Claimant’s libel claim in respect of the “cash for access” meaning should fail but his malicious falsehood claim should succeed. However, the possibility of divergent outcomes would appear to be the inevitable consequence of having a single meaning rule in libel but additional possible meanings in malicious falsehood. It is always likely to be more difficult to justify meanings at the graver end of the spectrum of possible meanings a reasonable reader could take from a piece.


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Instructing Solicitors

Slater and Gordon for the Claimant/Respondent, Bates Wells & Braithwaite LLP for the Defendants/Appellants