Reference:  EWHC 931 (QB)
Court: High Court (Queen's Bench Division)
Judge: Warby J
Date of judgment: 26 Apr 2016
Summary: Libel - Trial of Preliminary Issues - Reference - Meaning - Serious Harm - Serious Financial Loss - Companies
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Appearances: Adam Wolanski KC (Defendant)
Instructing Solicitors: BLM LLP for the Defendant
The First Claimant owned a restaurant called Down to Earth which was operated by the Second Claimant company. The First Claimant was convicted in December 2013 of charges relating to the welfare of a herd of cows he owned. In January 2014 the Defendant published a news release which referred to the conviction but incorrectly stated that the First Claimant’s neglect of his herd had been found to have led to the death of cows. It also described the Claimant as cynical since he owned a restaurant which claimed to be run on ethical principles. The news release prompted widespread publicity in the national media. The Claimants sued for libel. The Defendant made an offer of amends to the First Claimant but defended the claim brought by the Second Claimant on the grounds that the news release did not refer to it and did not cause it serious harm. A trial of the preliminary issues of reference, meaning and serious harm was ordered.
- Did the news release refer to the Second Claimant?
- Did the news release bear any meaning defamatory of the Second Claimant?
- Had the publication of the words complained of caused the Second Claimant serious financial loss so as to pass the threshold set by s.1(2) of the Defamation Act 2013?
Giving judgment for the Defendant:
- The Claimant’s case on reference failed. Even those acquainted with the Second Claimant, and who knew it operated the restaurant in January 2014, would not have understood the release to be referring to the company. A reasonable reader acquainted with the Second Claimant would know that the company was not running the restaurant in January 2013 when the offences occurred. Shendish Manor Ltd v Coleman  EWCA Civ 913 considered.
- The release did not bear a meaning defamatory of the Second Claimant. The focus of the release was on the conduct of the First Claimant not the Second Claimant. Reasonable readers would not have understood the release to mean that the Second Claimant had neglected the herd.
- The Second Claimant had failed to prove that the publication complained of caused it to suffer serious financial loss. There was a fall in profitability following publication but there was insufficient evidence for a finding of serious financial loss. The Second Claimant also failed on causation. It was already a struggling business before publication. Such loss as occurred could be attributed to several different factors, including the publication of allegations in the news release of which no complaint was made.
The case demonstrates that, in the absence of convincing documentary evidence or expert evidence, it may be difficult for a company to pass the threshold set by s.1(2) of the Defamation Act 2013. Warby J observed that in future, when making orders for the trial of the preliminary issue of serious financial loss, consideration will need to be given to (a) whether the court should also at that trial determine the exact extent of that loss, so as to avoid a future trial covering the same ground; (b) costs budgeting for the preliminary trial; and (c) service of a defence case on serious financial loss.