Money, money, money - how the Courts calculate libel damages, and why it’s important
No-one involved in the news publishing industry needs to be reminded that libel litigation is expensive, whether you win, lose, or settle.
The parties in libel claims usually concentrate on the costs of the litigation, partly because of the general rule that the losing party will be responsible for paying the winner’s legal fees (as well as its own), and partly because the costs usually far exceed the damages.
However, it would be a mistake to ignore the damages that a successful Claimant might be awarded. After all, having a good idea of that potential financial exposure from the outset of a complaint helps to inform the publisher how to respond to it.
Which is why a recent decision by Mrs. Justice Collins Rice, in which she reminded us of the principles and factors used to calculate libel damages, is helpful.
The case in question is Mirza v Farooqui & Al Nisr Publishing LLC. The Claimant was Mr Mirza, who is a UK based digital entrepreneur who invests in online ventures. The First Defendant wrote the article complained of, and the Second Defendant is the publisher of the Gulf News website, which is a UAE based publication with a global audience, and has reportedly nearly half a million readers in the UK.
The article alleged that Mr Mirza was being investigated as fraudulent by HMRC in the UK, as well as being reported to police for wrongdoing in the UK, Dubai, and Canada, and that he was dishonest. Mr Mirza asserted that all of these allegations were false and had been published maliciously to harm him.
The Defendants did not engage with the court process, presumably because of the publisher’s belief that they “do not fall under the purview of English laws”. In its only communication in response to Mr Mirza’s letter of claim, the publisher vehemently denied any wrongdoing.
Default judgment was duly entered in the Claimant’s favour, because the Defendants were true to their word and did not participate in the litigation. The court was then asked by the Claimant to assess the level of damages to be awarded to him.
Mr Mirza was awarded damages of £75,000, and whilst the circumstances of the case are fairly unique, the general principles outlined in the judgment are useful.
Mrs Justice Collins Rice reminded us that the purpose of the award of damages is to compensate the claimant for injury to his reputation and his feelings “so far as money is able to do that”.
Accordingly, the court took into account:
- the gravity of the defamation;
- the extent of the publication (including deliberate or predictable republication); and,
- evidence of the harm it has done (“including what the claimant knows or feels other people around him are thinking of him”).
Mrs Justice Collins Rice made it clear that the sum to be awarded should only reflect the harm caused to the Claimant’s reputation by publication in the UK, and that the only harm which was relevant was that which was caused as a result of the article itself.
In summarising the seriousness of the allegations, the judge said the article alleged criminal conduct of a “dishonest, deceptive and predatory nature” as well as alleging that this has deservedly attracted the attention of international law enforcement. The judgment stated that these allegations impugn the claimant’s “honesty and integrity in a way which goes to the fundamentals of his standing as a businessman, an entrepreneur and a citizen”, and touch closely on his “personal integrity and professional reputation”.
When it came to considering the extent of the publication, the court looked at the UK circulation of the Gulf News website, as well as the fact that the “first defendant actively encouraged further dissemination of the article to media outlets and influencers particularly likely to attract the attention of the Muslim community in the UK”.
Further, the judge said this:
“I have also taken into account evidence that the article does appear to have been circulated widely on social media and in Mr Mirza's local press, to an audience among or material to the Muslim business community, and in a manner which was either positively intended by the defendants or entirely foreseeable by them as a 'percolation effect'. This adds up to extensive publication in the UK, with particular emphasis on the Muslim community.”
Among the other factors which were considered were:
- the fact that the Gulf News is likely to be considered as a credible source of information and as authoritative by its readership;
- the claimant’s distinctive name; and
- evidence provided by the claimant showing the damage which had been caused to his businesses and the loss of confidence in him within the UK Muslim business community.
The lack of apology or retraction from the defendants was also considered, as well as the defendants’ lack of cooperation with Mr Mirza’s complaint, and failure “to acknowledge or respect the proceedings” in the court.
These facts are pretty unique, and it’s unlikely that UK journalists or publishers would emulate the way the Defendants dealt with the complaint.
So, is this decision important to UK publishers? The answer, I think, is yes, for three reasons.
Firstly, understanding the process of calculating libel damages is important for publishers when risk assessing the stories they are about to publish.
Secondly, it is useful to be reminded that in the right circumstances, you can try to minimise financial exposure through the use of an apology or a right of reply.
Thirdly, it is certainly worth bearing in mind that when determining damages, the court will look at the extent of the publication within the UK and “deliberate or predictable” republication which resulted from the article - so social media circulation will be definitely be a factor.
And finally - as someone with a less than common surname, I could not help but notice Her Ladyship’s point that a distinctive name is a relevant factor in this process!