Collins Stewart Limited & Another v The Financial Times Ltd (No 2)
Reference:  EWHC 262 (QB);  EMLR 100
Court: Queen's Bench Division
Judge: Gray J
Date of judgment: 25 Feb 2005
Summary: Defamation - libel - corporate claimant - aggravated damages - further articles repeating (in part) sting of original libel
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Desmond Browne CBE QC - Leading Counsel (Defendant)
Justin Rushbrooke QC (Claimant)
David Sherborne (Defendant)
Instructing Solicitors: Schillings for the Claimant; Farrer & Co for the Defendant
The FT published an article on 27 August 2003, entitled “Reputations on the line at Collins Stewart”, concerning High Court proceedings for wrongful dismissal brought against Collins Stewart Ltd by an ex-employee. The article reported allegations of improper and/or criminal conduct made against the company in a report which had been prepared by the ex-employee and submitted to the FSA. Collins Stewart Ltd and its parent company, Collins Stewart Tullett Plc, brought an action for libel against the FT over the original article. They also included 3 further articles, which had appeared subsequently in the newspaper and also reported the dispute between the company and its ex-employee, in their Particulars of Claim in the libel action. These follow-up articles were pleaded not as separate libels for which separate claims for damage were sought, but as increasing the damages to which the Claimants claimed to be entitled in respect of the original article.
(1) Whether the claim in relation to the follow-up articles was tantamount to a claim for ‘aggravated damages’;
(2) Whether a company is entitled to maintain a claim for aggravated damages.
(1) Despite the wording of the pleading, which used phrases such as “the negative impact” of the original article being “reinforced” by the follow-up articles and the “ongoing damage being exacerbated”, in truth the claim had the ring of a claim for aggravated damages.
(2) There were sound reasons of principle and practice why a corporate claimant should not be entitled to recover aggravated damages. The defining characteristic of an award of aggravated damages is that its function is to provide a claimant with compensation (“solatium”) for injury to his or her feelings caused by some conduct on the part of the defendant or for which the defendant is responsible. The essence of an award of aggravated damages in libel is to compensate the claimant for any extra injury to his/her feelings. Since a company has no feelings to injure and cannot suffer distress (see Lewis v Daily Telegraph  AC 234), aggravated damages are not available to a corporate claimant.
As the Court recognised, there is no authoritative statement defining or de-limiting the circumstances in which an award of aggravated damages may be recoverable. After a historical examination of the circumstances in which such awards had previously been made, the Court reached a firm conclusion in line with the generally accepted view that a corporate claimant has no feelings which can be injured and thus aggravated damages are inappropriate. The judge gave permission to appeal but no appeal was pursued.