July 27
The claimant had worked for the defendants as a recruitment consultant before leaving to join a City-based recruitment consultancy. The defendants made written and oral statements, including to the claimant’s new employer and a client of her former employer, suggesting that the claimant was approaching the former employer’s clients to solicit business from them, as well as contacting its job applicants, in breach of a post-employment non-solicitation contractual obligation and express assurances which the claimant had given. The claimant brought a claim against the defendants for libel, slander and malicious falsehood. In relation to the claim for malicious falsehood, the issue arose whether the claimant could establish a cause of action without having to prove special damage, pursuant to section 3(1) of the Defamation Act 1952, on the basis that the words upon which the action was founded were “calculated to cause pecuniary damage”. The claimant alleged that the publications were calculated to cause such damage to her both by preventing her from obtaining business, and thereby preventing her from earning a commission, and also in respect of the business/employment carried on by her at the time of publication, such damage being more likely than not to occur because the publishees would not want to assist or be party to a breach of contract. The question of law arose whether, as the claimant submitted, the court was confined to considering the likelihood of pecuniary damage via a particular mechanism arising because of the words themselves or whether, as the defendant contended, the claimant was required prove a mechanism of loss and causation of some form of pecuniary damage on the facts and not just by reference to the words used. At trial the claimant established that the words were published, that they were defamatory of her, that the allegation that she had acted in breach of contract was false, and that the defendants had published that allegation maliciously. But the judge dismissed all the claims for want of proof of harm. He held that the defamation claims failed because the claimant had not established that either publication caused serious harm to her reputation as required by section 1(1) of the Defamation Act 2013. The judge, having initially decided that the claimant was entitled to general damages, including an injury to feelings award to be assessed, following further submissions by the defendants, dismissed the malicious falsehood claims on the grounds that the claimant had not proved special damage as required by the common law, nor had she shown that her case fell within the exception to that requirement contained in section 3(1) of the Defamation Act 1952. The claimant appealed solely against the dismissal of the malicious falsehood claims.
On the appeal—
Held, appeal allowed. Giving the statutory language its natural meaning, the aim, purpose, and effect of the words in section 3(1) “calculated to cause pecuniary damage to the plaintiff” was to relieve a claimant of the need to plead or prove any actual loss on the balance of probabilities as a matter of historical fact. The statutory test was forward-looking. 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. That interpretation of section 3(1) respected the intention of Parliament, was consistent with authority, and Convention-compliant. In the present case the publication of the words complained of satisfied the requirements of the section. The defendants alleged to the claimant’s new employer and one of her customers that she had broken her contractual commitments to the defendants. Such an allegation had a natural tendency to cause financial loss to someone whose income was commission-based. The mechanisms of probable loss were adequately pleaded and, having regard to the relevant context, the necessary harmful tendency was established. As to whether the case was worth more than nominal damages, damages in the present context could only be compensatory. The claimant had to identify some recognised type of injury. The claimant pleaded that she had suffered non-pecuniary damage in the form of “huge emotional distress” as a result of the publications “exacerbated and/or aggravated by the fact that the defendants acted maliciously”. As a matter of law, an award in a case where the publication caused no actual pecuniary loss in the event could not be ruled out. It would be wrong to do so when the tort was complete on proof of a publication that had a natural tendency to cause financial loss and that was false and malicious. It could not be said that such publications were inherently incapable of causing distress. In principle, such an award might be made. The question of whether any and if so it should be made should be left to trial judges to decide, in the light of the infinitely variable factual circumstances of the cases that come before them. Accordingly, the court would allow the appeal and restore the judge’s initial decision to enter judgment for the claimant for damages, including compensation for injured feelings, to be assessed, and remit the case for that assessment to be carried out (paras 27, 65, 73–74, 76, 78, 80, 81, 82).
William Bennett QC and Godwin Busuttil (instructed by Thomson Heath & Associates Ltd) for the claimant.
David Price QC (instructed by Brabners LLP, Liverpool) for the defendants.