George v Cannell (CA)

The claimant worked as a recruitment consultant for an agency owned and operated by the defendants. After the claimant left and took a new job with another agency, the first defendant spoke to one of the claimant’s clients and sent an email to her new employer alleging that the claimant had been acting in breach of restrictive covenants in her contract with the second defendant by approaching its clients and soliciting business from them. The claimant sued the defendants for libel, slander and malicious falsehood.

The claims were tried by Saini J: [2021] EWHC 2988 (QB); [2021] 4 WLR 145. Saini J dismissed all the claims for want of proof of harm. He held that the defamation claims failed because the claimant had not proved that either publication caused serious harm to her reputation as required by s.1(1) of the Defamation Act 2013. In respect of malicious falsehood, while the claimant had established that the statements complained of were false and had been published maliciously, he also dismissed those claims because the claimant had not proved special damage as required by common law nor shown that her case fell within the exception to that requirement in s.3(1) of the Defamation Act 1952. In reaching the conclusion that he did on s.3, Saini J decided that the provision was to be construed as providing for a historic, backward-looking test whereby a claimant in order to succeed was required to prove that they had probably been caused some actual pecuniary (financial) loss by the publications complained of. He also found that unless a claimant proved that they had sustained some actual financial loss, they could not recover damages for injury to feelings.

The claimant appealed from the decision dismissing her s.3 malicious falsehood claim with the permission of the Judge. The central issue on appeal was the correct interpretation of s.3 and whether it provided for a historic test as the Judge had applied or a forward-looking test, as the claimant contended, which required a claimant to prove that the publications complained of were likely (judged at the time of publication) to cause them pecuniary damage.

1. The correct construction of s.3(1) of the Defamation Act 1952. Whether the words “calculated to cause pecuniary damage to the plaintiff” provide for a historic, backward-looking test requiring a claimant to prove actual financial loss, or a forward-looking test requiring a claimant to prove the probability of pecuniary (financial) loss judged at the time of publication.
2. If the latter, had the claimant satisfied that test?
3. If so, was the claimant entitled to an award of general damages to compensate her for injury to feelings and/or more widely (i.e., to compensate her for having been made the subject of false statement published maliciously whose publication was likely to cause her pecuniary damage)?

1. The forward-looking test was the correct interpretation. This is what Parliament had intended. The Porter Committee Report which preceded and informed the 1952 Act clearly supported that view of the law. Earlier authority did not decide otherwise. Section 3 of the HRA 1998 did not compel a different construction.
2. The claimant had satisfied that test on the facts.
3. Saini J had stated that if he had found that the claimant satisfied the requirements of s.3 he would only have awarded her nominal damages in respect of her claim for general damages other than for injury to feelings. There was no reason to disturb that decision. Even if the claimant could only recover nominal damages in respect of general damages other than injury to feelings, that did not preclude a claim for distress or hurt feelings. On the facts, that award was liable to be modest but not necessarily trivial.
4. Judgment would be entered for the claimant on her malicious falsehood claims and the assessment of damages remitted to the High Court for determination.

The proper interpretation of s.3 of the Defamation Act 1952 was a matter which, until this case, had somehow eluded the Court of Appeal for 70 years; “At this level”, Warby LJ says at para [28] in his judgment, “it is a new point”.

Certainty of construction has therefore been brought to bear.

It has also been clarified that a s.3 claimant will be entitled to recover compensation for injury to feelings even if they are unable to establish any actual financial loss beyond the nominal or any other form of general damages (e.g., damages evidence by a general falling off in business).

The unanswered question is whether a s.3 claimant should be entitled to be compensated by an award of general damages for being exposed to false statements, maliciously published, whose publication was likely to cause them pecuniary damage but, as a matter of evidence, did not in fact do so.

Warby LJ at [73] was sceptical: “Damages in this context can only be compensatory. The claimant must identify some recognised type of injury. As the argument proceeded the nature of the injury for which compensation was being sought remained elusive, unless it was reputational harm, which everyone agrees is outside the scope of this tort”. But strictly speaking the point did not arise for determination.