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Trial of serious harm by preliminary issue not appropriate in all cases

Theedom v CSP Recruitment & Colin Sewell [2015] EWHC 3769 (QB) The requirement under section 1 of the Defamation Act 2013 that a

Theedom v CSP Recruitment & Colin Sewell [2015] EWHC 3769 (QB)

The requirement under section 1 of the Defamation Act 2013 that a claimant must establish 'serious harm' to reputation has been determined by preliminary issue (this being the third time section 1 has been dealt with by way of preliminary issue since the Defamation Act came into force). Following the ruling in Lachaux, serious harm in this instance was proven by inference.

Of particular interest in this case was HHJ Moloney QC's statements that dealing with serious harm by way of preliminary issue was not suitable in all cases owing to the potential for evidence duplication between the preliminary issue trial and final trial.

Background

The Claimant ("Mr Theedom") was employed by the First Defendant ("CSP") as a trainee recruitment consultant. In June 2014 he was accused of leaking confidential information to two former employees of CSP, who now worked at a different recruitment firm. Mr Theedom's employment with CSP was terminated shortly thereafter.

On 29th to 30th June 2014, the Second Defendant, Mr Colin Sewell, sent emails to a total of 124 different email addresses who were customers of CSP or companies with which CSP had previously been in touch (that is, 124 emails to different people working for 102 different companies).

The title of the email was headed "Dismissed for gross misconduct" and stated that Mr Theedom had been dismissed from CSP for regularly passing confidential information to two employees of a different recruitment firm. The email concluded that CSP was now considering whether to take criminal action against the Mr Theedom (the final nine emails sent out did not contain this last statement).

Mr Theedom brought a claim for defamation. In this preliminary hearing, the Judge was required to determine the defamatory meaning of the emails (the interpretation of which was disputed by the Claimant and Defendants) and whether the emails had caused, or were likely to cause, serious harm to Mr Theedom's reputation 

Judgment

(i) Defamatory meaning

The parties were agreed that the emails were defamatory of Mr Theedom, but disagreed as to the pleaded meaning, in particular the Defendants did not believe that the meaning connoted that Mr Theedom had likely committed a criminal offence.

HHJ Moloney QC accepted Mr Theedom's pleaded meaning by reference to Jeynes v News Magazines Ltd [2008] EWCA Civ 130 which held that when determining the natural and ordinary meaning of the words, the hypothetical reader is taken to be representative of those who would read the publication in question. In these circumstances, the Judge held that the readers were business people and also employers. Having those characteristics, the hypothetical reader of the emails would be likely to read with some care and give some weight to the details, including the allegation that the misconduct was not isolated but regular and that criminal action was being considered.

The meaning of the words was therefore:

a)     “(While employed by the defendant, CSP, the claimant has regularly supplied commercially important, confidential information about CSP’s business and its customers’ businesses to CSP’s commercial rivals in breach of his contractual obligations to his employer.

b)     As a result, CSP has rightly dismissed him for gross misconduct.

c)     His misconduct has been so serious that there are reasonable grounds to suspect that it also amounts to a criminal offence [this final meaning did not apply to the nine emails which did not contain the criminality reference].”

(ii) Serious harm

Section 1 requires the claimant to prove as fact, on the balance of probabilities, that the statement complained of has caused, or will probably cause serious harm to his reputation. The claimant may be able to satisfy s.1 without calling any evidence, but by relying on the inferences of serious harm to be drawn from the level of the defamatory meaning of the words and the nature and extent of their publication. The defendant may call evidence in rebuttal, or demonstrate positively that no serious harm has occurred or is likely to do so.

In support of his argument that the defamatory statement reached the s.1 threshold, Mr Theedom relied on the inference of serious harm drawn from the statement as well as evidence of specific instances which purportedly demonstrated that serious harm had in fact occurred. The Defendants challenged those inferences and evidence as well as putting forward a positive case that Mr Theedom's subsequent successful employment with another recruitment agency in the same geographic area was evidence that he had not suffered serious harm to his reputation.

HHJ Moloney QC held that the circumstances raised an inferential case for serious harm to reputation, specifically:

  • the defamatory words were of a fairly high degree of gravity;
  • publication had been made to a substantial audience in terms of both number and importance to Mr Theedom's career;
  • Mr Theedom was a vulnerable claimant in the form of a young man starting out in a competitive business; and
  • the author of the words was influential and prima facie reliable.

The rebuttal evidence put forward by the Defendants established that Mr Theedom had suffered no demonstrable financial loss and that relatively few recipients of the email were known to have taken adverse action against him as a result. However, the Judge observed that pecuniary loss is not a requirement for a human claimant under the Defamation Act. Further, the fact that few recipients had evidentially reacted adversely to Mr Theedom was not a reliable guide to his standing in the eyes of those who had remained silent. Finally, the Judge noted that the Defendant had not withdrawn or corrected the email or apologised for it.

Accordingly, HHJ Moloney QC held that on the balance of probabilities publication of the email had caused serious harm to Mr Theedom's reputation so as to pass the threshold test under section 1 of the Defamation Act.

Comment

This case follows Mr Justice Warby's decision in Lachauxthat serious harm can be proved by inference. In that case, Warby J appeared to set the bar relatively high, citing the example of a well-known public figure who was the subject of the publication in the national media of an allegation of conspiracy to murder or a serious sexual crime. In such circumstances, serious harm would be capable of being satisfied inferentially. By contrast, in this case, inference was readily drawn from the defamatory statement being "fairly serious" and being published to a "fairly substantial audience" (just over 100 people).

Of perhaps greater interest was HHJ Moloney QC's's obiter discussion of the appropriateness of deciding the existence of serious harm by way of preliminary issue. The trial involved cross-examination of both the Claimant and Second Defendant and assuming that the action will now go to final trial, the Judge believed that there is likelihood that there will be a wasteful duplication of evidence and cross-examination already carried out.

This is the third preliminary issue trial on serious harm since the Defamation Act was introduced (following the cases of Cooke and Lachaux) and on each occasion the evidence submitted has been more substantial. HHJ Moloney QC observed in this case that the parties' combined costs in respect of the preliminary issue trial alone were £170,000.

Judge Moloney suggested that preliminary issue trials on serious harm should be avoided if the exercise is likely to involve a lengthy evidential dispute or overlap with other factual issues arising later in the case. Alternatively, a judge could simply rule on whether the case is capable of passing the section 1 test or whether the defendant has any real prospect of establishing that it does not.

Whilst the purpose of introducing the serious harm test was to 'weed out' undeserving claims, undoubtedly if every claim is subject to a trial of preliminary issue then there will be a converse effect of increasing overall cost and delay of libel cases. The development of the law relating to serious harm is still in its infancy, but in the future it is likely that the court will gradually take a more circumspect approach to its trial as a preliminary issue.

 

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