The ‘serious financial loss’ provision in s 1(2) ‘links explicitly to the serious harm test’ in s 1(1);7 and a ‘body that trades for profit’8 will need to satisfy both the
‘serious harm’ test and the ‘serious financial loss’ test to successfully sue.9 The
courts’ interpretation of s 1(1) has twice shifted significantly in the six years since the 2013 Act came into force on 1st January 2014,10 which means that the corporate
defamation cases in which s 1(2) has been applied to date have been decided against the backdrop of this changing approach to s 1 overall.11 It is likely that the similar
language used in sub-ss (1) and (2) will be given similar interpretation in the courts,12 and so the application of the s 1(2) test has been shaped, to some extent at
least, by the leading interpretation of s 1(1) at the time each case was decided.13 As
such, the impact of s 1(2) on corporate claimants cannot be understood without also considering the s 1(1) test that must be satisfied by all claimants. Part A explains the effect of s 1(1) on English defamation law, and how the courts’ interpretation of the serious harm test has developed since it came into force.
7 HL Deb 23 April 2013, vol 744, col 1366 (Lord McNally)
8 Parliament’s decision to limit the scope of the s 1(2) test’s applicability to claims brought by
‘bod[ies] that trade for profit’ will be discussed in Ch5.C.iii., at text to notes 254-308.
9 Business Energy Solutions Ltd v Scrivener [2015] EWHC 2948 (QB) [12]-[13].
10 Defamation Act 2013 (Commencement) (England and Wales) Order 2013, SI 2013/3027, art 2. 11 See further text to notes 79-99.
12 Lachaux v Independent Print Ltd [2019] UKSC 27, [15]; Pirtek (UK) Ltd v Jackson [2017] EWHC
2834 (QB) [50]. When interpreting legislation, in general ‘it is a sound rule of construction to give the same meaning to the same words occurring in different parts of an Act of Parliament’: Courtauld
v Legh (1869) LR 4 Exch 126, 130 (Cleasby B); R v Kansal (no 2) [2001] UKHL 62, [102].
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i.
Preceding case law
To understand the effect of s 1, it is necessary to briefly explain some features of the law as it existed prior to the commencement of the 2013 Act, and in particular the common law ‘presumption of harm’,14 which applied in cases involving
corporate, as well as individual, claimants.15 The presumption of harm meant that a
defamation claimant did not need to prove that the statement complained of had caused actual harm to her reputation. Instead, it was sufficient to show that the statement complained of had a tendency to harm the claimant’s reputation.16 That
was determined based on the intrinsic quality of the statement itself, by reference to one of a number of tests of ‘defamatory’ meaning.17 This meant that the cause of
action in defamation was complete at the point that the statement was published, and was not reliant on actual harm accruing as a consequence of its publication.18
The common law position was criticized for allowing claimants to establish prima facie liability, and in doing so to put the burden on defendants to avoid liability, even when their claims were brought in respect of relatively trivial (but still technically defamatory) statements, or when publication was minimal or unlikely to actually harm the claimant’s reputation for some other reason.19 As noted above,
the ‘serious harm’ test in s 1 of the 2013 Act was intended to reduce claimants’ ability to pursue these more trivial claims, in light of their effect on freedom of expression.20 The section was based on steps that the courts had already taken to
14 The terms ‘presumption of harm’, ‘presumption of loss’, and ‘presumption of damage’ are used
interchangeably in the discussion below.
15 Jameel v Wall Street Journal Europe SPRL [2006] UKHL 44 (‘Jameel v WSJ’).
16 The categories of ‘defamatory’ statement were broadly intended to identify statements that were
inherently likely to cause harm: David A Anderson, ‘Reputation, Compensation, and Proof’ (1984) 25(5) William & Mary Law Review 747, 751. The view that the categories of statement considered ‘defamatory’ are those with an inherent tendency to harm the claimant’s reputation is a reasonable approximation, but it fails to explain some of the common law tests, particularly the ‘ridicule’ and ‘shun or avoid’ tests: Lawrence McNamara, Reputation and Defamation (OUP 2007) chs 6-7.
17 The main tests include whether the statement complained of tends to: ‘lower [the claimant] in the
estimation of right-thinking members of society generally’ (Sim v Stretch [1936] 2 All ER 1237, 1240); ‘expose the [claimant] to hatred, ridicule, or contempt’ (Parmiter v Coupland (1840) 6 M & W 104, 109); cause the claimant to be ‘shunned or avoided’ (Youssoupoff v Metro-Goldwyn-Mayer
Pictures Ltd (1934) 50 TLR 581); or ‘affect in an adverse manner the attitude of other people towards
the claimant’ (Thornton v Telegraph Media Group [2010] EWHC 1414 (QB) [96]).
18 Shevill v Presse Alliance SA [1996] AC 959 (HL) 983.
19 eg Douglas W Vick and Linda Macpherson, ‘An Opportunity Lost: The United Kingdom’s Failed
Reform of Defamation Law’ (1997) 49(3) Federal Communications Law Journal 621, 624-28.
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address this problem in two cases decided in the preceding decade: Thornton v Telegraph Media Group Ltd (‘Thornton’),21 and Jameel v Dow Jones & Co Inc
(‘Jameel’).22 Although Jameel was decided five years before Thornton, the cases
are discussed in reverse chronological order below for reasons of clarity.
The issue in Thornton was whether the statement complained of was capable of bearing a defamatory meaning.23 Tugendhat J held that, whichever definition of
‘defamatory’ was applied to that question, it ‘must include a … threshold of seriousness, so as to exclude trivial claims.’24 The effect of that threshold is that a
statement will only be defamatory if it has a tendency to ‘substantially’ harm the claimant.25 However, Tugendhat J made clear that ‘the claimant does not have to
prove that there has in fact been an affect upon him.’26 The decision in Thornton
therefore retained the common law principle that harm would be presumed based on the inherently harmful nature of the statement complained of, but ‘sought to confine the application of that principle to cases which reached an appropriate level of gravity.’27
In Jameel, the Court of Appeal also declined to abolish the presumption of damage.28 But Lord Phillips MR ruled that a defamation claim could be struck out
as an abuse of process, even though the statement complained of was presumed to have harmed the claimant’s reputation by virtue of its defamatory meaning, if the claimant’s reputation had in fact ‘suffered no or minimal actual damage’ as a result of its publication.29 Where, as in Jameel, the statements complained of had been
published to very few people and there was no other evidence that the claimant had been harmed, any actual damage to the claimant’s reputation would be so minimal that ‘the game [would] not [be] worth the candle’.30 The cost of the litigation for
the parties and for the court would be disproportionate to the vindication that the
21 Thornton v Telegraph Media Group Ltd [2010] EWHC 1414 (QB). 22 Jameel v Dow Jones & Co Inc [2005] EWCA Civ 75.
23 Thornton (n 21) [15]. 24 Ibid, [90].
25 Ibid, [96] (emphasis in original). 26 Ibid, [93] (emphasis added).
27 Sir Brian Neill and others, Duncan and Neill on Defamation (4th edn, LexisNexis UK 2015) para
4.04.
28 Jameel (n 22) [41]. 29 Ibid, [55].
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claimant could realistically hope to achieve if successful. If the litigation was not a necessary and proportionate means of protecting the claimant’s reputation, it would be a violation of the defendant’s Art 10 right to freedom of expression to allow it to continue.
As Mathilde Groppo explains, these cases provided the courts with ‘two independent mechanisms to eliminate trivial claims.’31 Put simply, the distinction
between them is that the Thornton test is relevant to whether the statement complained of is ‘defamatory’, determined at the point of publication by reference to the inherent tendency of the statement to cause harm; the Jameel test is relevant to whether the statement is actionable in a procedural sense, determined at the point the issue is tried by reference to extrinsic facts about the actual impact of the statement.
The Explanatory Notes to the 2013 Act state that the ‘serious harm’ test in s 1 ‘raises the bar for bringing a claim’ compared to the thresholds established in Thornton and Jameel.32 But, while they acknowledge the distinction between the two tests to
some extent,33 they do not differentiate between the effect that s 1 was intended to
have on each. Nor do they explain precisely how, or to what extent, the threshold for succeeding with a defamation claim is raised by s 1. Those questions were left to the courts to answer.
ii.
Ambiguity in the statutory language of s 1
One of the most significant problems with s 1 of the 2013 Act is the lack of clarity in its language.34 Parliament did not intend the serious harm test to be used as a
definition of ‘defamatory’, either to supplement or to replace the established common law tests.35 So, to preserve the requirement for the claimant to show that
a statement is defamatory at common law, but add on top of that a requirement to
31 Mathilde Groppo, ‘Serious Harm: A Case Law Retrospective and Early Assessment’ (2016) 8(1)
Journal of Media Law 1, 3.
32 Explanatory Notes to the Defamation Act 2013, para 11.
33 Lachaux v Independent Print Ltd [2015] EWHC 2242 (QB) [50].
34 Lachaux v Independent Print Ltd [2017] EWCA Civ 1334, [62]: Davis LJ describing the
‘conceptual impenetrability of s.1(1) as drafted.’
35 See Richard Parkes and others, Gatley on Libel and Slander (12th edn, 2nd supp, Sweet & Maxwell
2017) para 2.1 (‘Gatley’): ‘The language adopted in the provision – that a publication “is not defamatory unless” – is simply not apt to create a new definition’.
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show serious harm to reputation, the section uses the phrase ‘A statement is not defamatory unless…’. This has the unnecessarily confusing consequence that a defamation claimant must now show that the statement complained of is ‘defamatory’ at common law; and then that the statement is not ‘not defamatory’ under s 1.
The ambiguity of s 1 is more than a matter of clumsy language: the decision to make the serious harm requirement relevant to whether a statement is defamatory, rather than whether it is actionable, introduces conceptual confusion into the test.36 As
explained above, at common law (including under the Thornton threshold) whether a statement is ‘defamatory’ is determined by reference to the nature of the statement itself, and can therefore be judged at the point of publication.37 But the language
used in s 1, which requires that the publication of the statement complained of ‘has caused or is likely to cause serious harm to the reputation of the claimant’, seems to suggest ‘that serious harm must be empirically demonstrated’ by reference to evidence extrinsic to the statement itself.38 If the intention of s 1 is that claimants
will need to provide evidence of actual harm to reputation, then the test appears to modify the determination of defamatory meaning by reference to events that happen after the point of publication. As a result, s 1(1) would have the effect of ‘abrogat[ing], by necessary implication, the presumption of damage’ that arises as a result of a statement’s inherently harmful nature.39 But this ‘long-standing feature
of the common law’ is not explicitly referred to in the Act, and no clear indication is given that Parliament intended to make ‘a profound change to defamation law’ by abolishing it.40
36 HC Deb 12 September 2012, vol 550, col 373 (Sir Edward Garnier MP); Descheemaeker, ‘Three
Errors’ (n 1) 26-27.
37 Text to notes 23-27.
38 Northern Ireland Law Commission, Consultation Paper: Defamation Law in Northern Ireland
(NILC 19, 2014) para 4.19.
39 David Rolph, ‘A Critique of the Defamation Act 2013: Lessons For and From Australian
Defamation Law Reform’ (2016) 21(4) Communications Law 116, 117.
40 Ibid. Contrast, for example, the explicit abolition of common law defences in Defamation Act
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iii.
Shifting interpretation of s 1: the Lachaux case
These ambiguities were central to the most important case on s 1 to date, Lachaux v Independent Print Ltd (‘Lachaux’), which involved a preliminary dispute as to whether the claimant had satisfied the serious harm threshold. The High Court ruled on the issue in July 2015,41 followed by the Court of Appeal in September 2017,42
and finally the Supreme Court in June 2019.43 Although all three courts ruled in
favour of the claimant on the facts of the case, at each level of appeal the legal analysis shifted significantly. The Court of Appeal and Supreme Court judgments marked the first time each of those courts had considered s 1; and the High Court judgment was also effectively the leading authority on s 1 until it was superseded by the Court of Appeal’s analysis of the test.44
The different analyses of s 1 at each stage of appeal turned mainly on the phrase ‘has caused or is likely to cause’. Soon after the 2013 Act was passed, James Price and Felicity McMahon noted that this phrase was ‘potentially ambiguous: it may refer to the possibility of some future event occurring, or it may be used to describe the situation where the statement itself is of the nature that it is likely to cause serious harm.’45 In the High Court, Warby J opted for the first of these
interpretations. His analysis of the effect of s 1 was as follows:
‘… in enacting s 1(1) Parliament intended to do more than just raise the threshold for defamation from a tendency to cause “substantial” to “serious” reputational harm. The intention was that claimants should have to go beyond showing a tendency to harm reputation. It is now necessary to prove as a fact on the balance of probabilities that serious reputational harm has been caused by, or is likely to result in future from, the publication complained of.’46
However, in the Court of Appeal, Davis LJ took a different view. He rejected the logical implication of Warby J’s analysis that Parliament had abolished the common
41 [2015] EWHC 2242 (QB) (‘Lachaux (QB)’). 42 [2017] EWCA Civ 1334 (‘Lachaux (CA)’). 43 [2019] UKSC 27 (‘Lachaux (SC)’). 44 Groppo (n 31) 5.
45 James Price and Felicity McMahon, Blackstone’s Guide to the Defamation Act 2013 (OUP 2013)
para 2.34. See also para 2.52.
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law presumption of harm without explicitly acknowledging that it was doing so.47
Warby J’s interpretation of s 1 would also mean that Parliament had ‘swept away [the] well-established common law principle … that in defamation the cause of action is complete when the defamatory statement is published’.48 Requiring
extrinsic evidence of harm to the claimant’s reputation would mean that the cause of action in respect of a defamatory statement would be inchoate at the point of publication,49 and the claim may ‘drift in and out’ of actionability as the
circumstances of the case change.50 This in turn would make it difficult to determine
the point from which the one-year limitation period for bringing a claim would run.51
According to Davis LJ’s interpretation, whether a claimant had satisfied the s 1(1) test could be assessed by reference only to the inherent tendency of the statement to cause ‘serious harm’ to the claimant’s reputation:
‘Section 1(1) of the 2013 Act has the effect of giving statutory status to Thornton, albeit also raising the threshold from one of substantiality to one of seriousness: no less, no more but equally no more, no less. Thornton has thus itself been superseded by statute.’52
The Court of Appeal judgment made the ‘serious harm’ test in s 1(1) substantially less demanding for claimants to satisfy than Parliament seems to have intended, and therefore weakened the protection that s 1 offered for freedom of speech.53
Although Davis LJ asserted that on his interpretation the s 1 test had ‘superseded’ Thornton,54 the effect of his judgment was to read s 1 as doing little more than
codifying the Thornton test.55 Similarly, if the test in s 1(2) could be satisfied by
showing that the statement complained of had a tendency to cause serious financial 47 Lachaux (CA) [57]-[58]. 48 Ibid, [63]. 49 Lachaux (QB) [45]. 50 Lachaux (CA) [60]. 51 Ibid, [61]. 52 Ibid, [82].
53 Mathilde Groppo, ‘Case Law: Lachaux v Independent Print, Supreme Court Abolished Common
Law Presumption of Damage in Libel Cases’ (Inforrm, 13 June 2019) <https://inforrm.org/2019/06/13/case-law-lachaux-v-independent-print-supreme-court-abolished- common-law-presumption-of-damage-in-libel-cases-mathilde-groppo/>.
54 Lachaux (CA) [82].
55 Nicola Cain, ‘Seriously Limiting Serious Harm’ (12 September 2017)
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loss,56 it would add little to the existing principle that a company can only sue in
respect of statements that have ‘a tendency to damage it in the way of its business,’57
subject to a threshold of seriousness,58 so that ‘adverse consequences for the
claimant must be likely.’59
iv.
The Supreme Court’s Lachaux judgment
The Court of Appeal’s analysis, according to which the common law presumption of damage was left ‘unaffected’ by s 1,60 was reversed on appeal to the Supreme
Court. Delivering the Court’s unanimous verdict, Lord Sumption agreed with Warby J’s conclusion in the High Court61 that ‘the defamatory character of [a]
statement no longer depends only on the meaning of the words and their inherent tendency to damage the claimant’s reputation.’62 Instead, s 1 introduced ‘a new
threshold of serious harm which did not previously exist’:63
‘… a statement which would previously have been regarded as defamatory, because of its inherent tendency to cause some harm to reputation, is not to be so regarded unless it “has caused or is likely to cause” harm which is “serious”.’64
The serious harm threshold must be applied ‘by reference to the actual facts about [the statement’s] impact and not just to the meaning of the words.’65 That is not to
say that the inherent tendency of a statement to harm the claimant’s reputation is irrelevant to the s 1 test; rather, that it cannot on its own be determinative of whether the serious harm threshold has been met. Whether a statement ‘has caused’ serious harm for the purpose of s 1:
‘… is a proposition of fact which can be established only by reference to the impact which the statement is shown actually to have had. It depends on a
56 Although Davis LJ stated (at [82]) that the test in s 1(2) may ‘operate in a way rather different
from s 1(1)’, that did not prevent the High Court from applying his analysis of s 1(1) directly to the s 1(2) test in cases involving corporate claimants: Seventy Thirty Ltd v Burki [2018] EWHC 2151 (QB) [204]-[205]; Pirtek (UK) Ltd v Jackson [2017] EWHC 2834 (QB) [50].
57 Derbyshire County Council v Times Newspapers Ltd [1993] AC 534 (HL) 547. 58 Thornton (n 21) [91]. 59 Ibid, [56]. 60 Lachaux (CA) [82]. 61 Lachaux (QB) [60]. 62 Lachaux (SC) [17]. 63 Ibid, [13]. 64 Ibid. 65 Ibid, [12].
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combination of the inherent tendency of the words and their actual impact on those to whom they were communicated.’66
Lord Sumption explained that ‘the same must be true’ of the likelihood limb of the s 1 test, since ‘both past and future harm are being treated on the same footing, as functional equivalents. If past harm may be established as a fact, the legislator must have assumed that “likely” harm could be also.’67 But Lord Sumption also avoided
the conflict between s 1 and the principle that the cause of action in defamation accrues at the point of publication, which had troubled Davis LJ in the Court of Appeal, by arguing that:
‘The impact of the publication on the claimant’s reputation will in practice occur at [the] moment [of publication] in almost all cases, and the cause of action is then complete. If for some reason it does not occur at that moment, the subsequent events will be evidence of the likelihood of its occurring. In either case, subsequent events may serve to demonstrate the seriousness of the statement’s impact including, in the case of a body trading for profit, its financial implications. It does not follow that those events must have occurred before the claimant’s cause of action can be said to have accrued. Their relevance is purely evidential.’68
Claimants will therefore need to refer to some facts extrinsic to the statement itself to show the ‘actual’ harm to reputation, or the likelihood of actual harm, necessary to surmount the threshold in s 1(1). However, the extrinsic evidence necessary to satisfy the serious harm test does not necessarily need to be direct evidence of harm to reputation. Lord Sumption allowed for the possibility that a claimant could demonstrate as a matter of fact that the statement complained of had caused or was likely to cause serious harm to her reputation by inviting the court to draw that