Collins Stewart Ltd & Another v The Financial Times Ltd

Reference: [2004] EWHC 2337 (QB); [2005] EMLR 64

Court: Queen's Bench Division

Judge: Tugendhat J

Date of judgment: 20 Oct 2004

Summary: Libel - Damages - Special damages - Strike out - Company - Measure of damages by reference to share price - Mode of trial - General damages

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Appearances: Desmond Browne CBE KC - Leading Counsel (Defendant)  Justin Rushbrooke KC (Claimant)  David Sherborne (Defendant) 

Instructing Solicitors: Schillings for the Claimants; Farrer & Co for the Defendant


The FT published an article 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 the Particulars of Claim (annexed to the Claim Form) in the dismissal case. Collins Stewart Ltd and its parent company, Collins Stewart Tullett Plc, brought an action for libel against the FT, which included a special damages claim quantified by reference to the fall in the Plc’s share price since the article’s publication. The Claimants contended that the fall in market capitalisation of £230m was the best available reflection of the loss of future revenues. Eady J had ruled that there should be a split trial, with liability and general damages tried by judge and jury and special damages by judge alone.


(1) Whether the part of the special damages claim related to the fall in the Plc’s share price since publication should be struck out; (2) Whether general damages as well as special damages should be tried by judge alone.


(1) The special damages claim based on the fall in the Plc’s share price was struck out. Share price was not a suitable guide to the company’s loss: “the reasons why a share is traded at a particular price … are unknown, or, at best, matters of conjecture.” Further, the argument that such a value was a suitable measure of loss was circular. Were the market rational enough to provide a sound measure, it would take into account the prospects of recovery in the libel action, such that damages measured by a fall in market price would be nil. (2) The issue of damages would be tried by judge alone. If a jury were to decide that question there would be a real danger of double or under-compensation and of a verdict inconsistent with that on special damages.


The novel aspect of the special damages claim related to the fall in market capitalisation of £230.5m – the largest special damages claim ever brought in a defamation action. The judge regarded this claim as misconceived and untriable. The FT may have won an important battle but the war is by no means over – a substantial claim for specific lost business remains. The judge did not give permission to appeal.