Supreme Court allows appeal in part in George v Cannell

The Supreme Court by a 3:2 majority has allowed the Defendants’ appeal in part from the Court of Appeal’s decision in George v Cannell on the proper interpretation of s.3 of the Defamation Act 1952

Section 3 of the 1952 Act provides as follows:

3.-(1) In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage –

(a) If the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form, or

(b) If the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.”

The Court of Appeal ([2023] QB 117) held, with Warby LJ giving the only judgment with which Underhill & Snowden LJJ agreed, that:

  • Section 3(1) embodied a forward-looking test which relieved a claimant of the need to plead or prove any actual financial loss as a matter of historical fact and that it was enough for a claimant to prove the publication by the defendant of a false and malicious statement of such a nature that, viewed objectively in context at the time of publication, financial loss was an inherently probable consequence or, putting it another way, financial loss was something that would probably follow naturally in the ordinary course of events.
  • The requirements of s.3(1) were satisfied on the facts of the case and that since the claimant had established all the other elements of malicious falsehood her cause of action was made out and judgment would be entered for her for nominal pecuniary damages (reversing Saini J’s decision to dismiss the claim and enter judgment for the Defendants).
  • Where a claimant had established a claim in malicious falsehood, whether on proof of special damage or by reason of s.3(1) of the 1952 Act, there was no reason why, in an appropriate case, he or she should not recover aggravated damages for injury to feelings, even where the words upon which the claim was founded had caused no actual pecuniary loss.
  • Since the claimant had established a prima facie case on her evidence for an award of damages to compensate her for her injured feelings, that issue would be remitted to a first instance judge for that assessment to be carried out.

The Defendants appealed to the Supreme Court and permission to appeal was granted by Lord Briggs, Lord Hamblen and Lord Leggatt.

The appeal was heard over two days in November 2023.

In a landmark judgment on the law of malicious falsehood generally, the majority of the Supreme Court – with Lord Leggatt giving a judgment with which Lord Hodge and Lord Richards agreed – concluded that:

(i) Section 3(1) created a forward-looking test (para.68).

(ii) If its requirements were satisfied, it created an irrebuttable presumption of law that the claimant had suffered some but not substantial financial loss (para.51). This would entitle a claimant who had established the relevant matters to judgment and an award of nominal pecuniary damages. On this basis, the Claimant, who had satisfied the requirements of s.3(1), was entitled to judgment and an award of £5 by way of nominal damages.

(iii) It was open to a s.3 claimant if he or she wished to seek to prove that they had suffered some substantial financial loss and recover such sums by way of an award of compensatory damages (para.108).

(iv) However, unless a malicious falsehood claimant – whether a claimant seeking to prove special damage at common law or a claimant invoking s.3(1) – was able to establish that he or she had suffered significant financial loss, they were not entitled to seek to recover from the defendant damages for injury to feelings (para.96). Furthermore, a claimant would need to prove that his or her injury to feelings had been caused by the financial loss sustained (para.104).

(v) There was nothing in the circumstances of the case which could reasonably be said to justify an award of aggravated damages (para.119).

(vi) Accordingly, where the Claimant had not established a right to either distress damages or aggravated damages, the Court of Appeal’s order would be discharged insofar as it remitted for assessment of such damages by a judge (para.120).

The minority of the Supreme Court – Lord Hamblen giving a dissenting judgment with which Lord Burrows agreed – disagreed with the majority on points (ii) and (iv)-(vi). Their view was that:

(a) If a claimant satisfied the requirements of s.3(1), pecuniary loss would be inferred or rebuttably presumed in the claimant’s favour (para.162). It was open to the defendant to rebut the presumption of pecuniary loss with evidence, but if they did so, the claimant would still be entitled to an award of nominal pecuniary damages (para.164).

(b) Mental distress damages could be awarded in malicious falsehood to a claimant relying on s.3(1) even though he or she had suffered no pecuniary loss (paras.234, 235, 237). The basic point was that in principle, if a tort had been committed, the claimant should be entitled to compensation for all pecuniary and non-pecuniary loss caused by the tort subject to normal rules restricting or denying damages such as remoteness and mitigation.

(c) Furthermore, it was not necessary to confine recovery of mental distress damages to distress that had been suffered in consequence of the sustaining of actual pecuniary loss (para.234(iv)). That was not a distinction drawn elsewhere in the law of damages.

(d) The appeal should be dismissed and the assessment of damages for mental distress remitted to a judge in accordance with the Court of Appeal’s order (paras.235, 238).

It is hard to know precisely where this leaves this law of malicious falsehood. One curiosity of the decision of the majority is, perhaps, that, if proving significant financial loss is a requisite of a claim brought under s.3(1) if the claimant wishes to recover damages for injury to feelings, it is unclear what the statutory route offers over a common law claim, and therefore whether Parliament’s statutory purpose in enacting s.3 – “to make it easier for claimants to recover damages in actions for malicious falsehood” (per Lord Leggatt for the majority at para.47) – has been fulfilled. The recovery of damages for financial loss short of technical “special damage” has been available in malicious falsehood since the Court of Appeal’s decision in Ratcliffe v Evans ([1892] 2 QB 524) in 1892.

A 5RB case report is available here. The Supreme Court’s own summary, together with the judgments of the Court themselves, may be found here.

William Bennett KC and Godwin Busuttil of 5RB acted for the Claimant and Respondent to the appeal, Ms Fiona George, instructed by Thomson Heath Jenkins & Associates.