Observer and Guardian v UK

B e f o r e :

LORD JUSTICE SIMON BROWN LORD JUSTICE WALLER and LORD JUSTICE SEDLEY ____________________

Victor Kermit Kiam II Respondent - and - MGN Ltd Appellant ____________________

(Transcript of the Handed Down Judgment of Smith Bernal Reporting Limited, 190 Fleet Street London EC4A 2AG Tel No: 020 7421 4040, Fax No: 020 7831 8838 Official Shorthand Writers to the Court)

Miss Victoria Sharp QC (instructed by Messrs Olswang for the Appellant) Desmond Browne Esq, QC & Miss Lucy Moorman (instructed by Messrs Peter Carter-Ruck & Partners for the Respondent) ____________________

HTML VERSION OF JUDGMENT AS APPROVED BY THE COURT ____________________

Crown Copyright ©

Lord Justice Simon Brown

Introduction

On 10 March 2000, at the end of a five day libel trial before Moore-Bick J and a jury, judgment was entered for the claimant, Mr Victor Kiam II, for £105,000 damages. Although Mr Kiam died on 27 May 2001 it is not suggested that his death affects the outcome of this appeal and I shall call him simply the respondent. The jury made plain that their award was for aggravated compensatory damages. MGN Ltd (the appellants), the publishers of the libel, now appeal against the quantum of the award by leave of this court granted on 11 October 2000. Although other grounds were earlier canvassed, the sole question remaining for decision is whether the award of £105,000 was excessive and, if so, what is the proper sum to substitute for it.

The libel

The libel sued upon was the lead article published prominently in colour in the “City Slickers” column of the Mirror on 6 January 1999. The author was Mr Hipwell. Under the banner headline “MY COMPANY HAS BOUGHT IT” and alongside a large photograph of the respondent, the text read:

A further caption next to the photograph read:

The defamatory meanings

The respondent relied on both the natural and ordinary meaning of the words and also an innuendo. The article suggested, he contended, first, that his entrepreneurial ability, on which he had based his business success and reputation in the past, had wholly deserted him so that he was now fit only for retirement; secondly, that he was prepared to give up on Ronson and close it down with obviously devastating consequences for staff who would lose their jobs, shareholders their money and customers their contracts; and thirdly, that Ronson’s imminent financial collapse was attributable to his own professional failures, first in having put together a refinancing programme so flawed that it caused Ronson’s finance director (Mr Todd) to resign, and secondly in failing to exploit the value of the Ronson brand name, the so-called “whiff of James Bond”, thereby indicating that he had lost his marketing and entrepreneurial ability.

As to the innuendo, a number of those reading the article would have read too the respondent’s interview in the July/August 1998 edition of “Brands”, a magazine for retailers, expressing his confidence in Ronson’s survival and making a 5 year commitment to the company, and/or his circular letter dated 18 September 1998 to Ronson’s customers reassuring them about the company’s financial stability and future. The article would have suggested by way of innuendo that the respondent had lied or misled the public about his commitment to Ronson and the company’s financial viability.

Given the narrow basis of this appeal, the jury must be assumed to have accepted the respondent’s contention that the article bore all those meanings. Similarly they must be assumed to have accepted the respondent’s case on all the many aggravating features of the case upon which the respondent relied and which the judge left for their consideration. These I must now summarise.

The aggravating facts

The article was untrue in every material respect and had been published maliciously. The respondent had become Executive Chairman and Chief Marketing Officer of Ronson in July 1998, a month after the London Stock Exchange suspended its share listing. He had invested not £10 million but £1 million. He was intent on saving the company and had committed himself wholeheartedly to doing so, remaining in England and away from his family for the purpose. There was no question of him having “had enough” and “thinking of closing it down”. The refinancing programme had been a complete success and, when the article was published, the company’s losses were no longer “escalating” but rather were diminishing. Mr Todd left Ronson solely because he had been head hunted by a bigger company. The story could easily have been checked with Ronson, Mr Todd, or the respondent himself. None of them, however, had been contacted. Although, moreover, the reader was led to believe that the story was based on numerous sources, disclosure of Mr Hipwell’s notebook indicated a single unidentified source who in any event had suggested that Mr Hipwell speak to Mr Todd (which, of course, he did not do). Discovery further revealed that Mr Hipwell had made use of a Sunday Telegraph article of 1 March 1998 (before the respondent joined Ronson) which itself had referred to “bad debt provisions, escalating losses, a share price that has fallen off a cliff over the last two years”. Mr Hipwell could therefore be seen to have applied to Ronson’s position in January 1999 the Sunday Telegraph description of its position some ten months earlier before the refinancing of the company under Mr Kiam’s leadership. Other earlier statements had been similarly distorted. In short, Mr. Hipwell’s complete indifference to the truth was amply demonstrated. By the time of trial he had been dismissed for (unrelated) gross misconduct. He was not in those circumstances called as a witness to explain his conduct. Neither did Mr Piers Morgan, the editor, give evidence.

When invited by the respondents’ solicitors on 8 January 1999 to publish an article correcting the errors and apologising to Mr Kiam, the editor denied that the article was materially inaccurate save only as to the extent of the respondent’s investment in the company. That alone he offered to correct and he refused to apologise. Even after June 1999 when the appellants served their defence pleading neither justification nor fair comment, no apology was made. The absence of apology was the more serious since the respondent had told his acquaintances that he would shortly be getting one. He had, indeed, attached his solicitor’s letter of 8 January to a circular letter sent on 12 January 1999 to his many friends and customers with a view to reassuring them as to the true position.

Shortly before trial the appellants published in the City Slickers column three further short articles about the respondent and Ronson respectively on 7 December 1999, 13 January 2000, and 14 January 2000. Put briefly, these suggested that the respondent was deceiving the stock market by concealing plans to merge Ronson with an Internet company; they said that Ronson’s shares were “ready to roll big time”. The respondent was naturally concerned, fearing that readers would be drawn into a false market in the shares and then blame him for their predicament. Again, no one checked the truth of those articles with the respondent or anyone else at Ronson and again they were accepted at trial to be factually incorrect.

Another major aggravating feature of the case was the appellants’ conduct at trial and not least suggestions made in counsel’s closing speech to the jury that “Mr Kiam is simply impossible to satisfy”, that “no amount of money will satisfy Mr Kiam”, and that in both this case and an earlier case against the Sunday Times in 1994( Kiam v Neil (No. 2) to which I shall return) the respondent had wanted “his day in court” and nothing the appellants did could have prevented it. None of these allegations had been put to the respondent in cross-examination; rather his evidence that he was not a quitter had been turned against him and used as a stick for criticism. Furthermore, although the appellants’ only witness, their Legal Manager, had accepted in cross-examination that the article was obviously damaging to the respondent, counsel continued to submit to the jury that it was not defamatory at all, thereby adding to the imputation that the respondent had acted wholly unreasonably in ever bringing the claim.

The article had been published to some 6.37 million readers. No apology for it had ever been given. True, by open letter dated 1 March 1999 (five days before the trial began) the appellants had offered £50,000, costs and an apology. That, however, was regarded by the respondent as too little, too late, and in the event no apology was published. The appellants’ case to the end was that no damages should be payable since the article, though untrue, was simply not defamatory. The respondent gave evidence of distress, upset, annoyance and frustration. All this was undisputed; so too was strong supporting evidence from his wife, his son, and fellow Ronson directors.

All these matters notwithstanding, it is the appellants’ case that £105,000 was quite simply excessive so that this court should intervene and substitute for it some lesser award. Before, however, turning to consider the court’s powers and the authorities governing the proper approach to its exercise, there are other important features of this case to which I must refer.

Other features of the case

First is this. The respondent had claimed not only aggravated damages but also exemplary damages. A ruling as to that was not made until the final morning of the trial, just before counsel’s speeches. The judge ruled that whilst there was evidence which enabled the jury to find malice, there was insufficient evidence from which to infer that the appellants had “carried out a calculation” that publication of this article “would give it a commercial advantage which would outweigh any liability it might incur to Mr Kiam”. The exemplary damages claim was accordingly withdrawn. The issue of malice nevertheless remained before the jury for two reasons: first because in any event it went to the question of aggravated damages; secondly because, lest the jury were to accept the appellants’ case that the article was simply not defamatory of the respondent, there remained an alternative claim for damages for malicious falsehood. In the event, having found for the respondent on his claim for libel, no verdict was called for regarding malicious falsehood.

The next point to note is the care with which the judge warned the jury about matters which might wrongly have inflated their award. Having given his ruling on exemplary damages, he instructed the jury (before counsel’s speeches) to put that aspect of the case completely out of their minds and said there would be “no question of awarding exemplary or punitive damages”. Twice in his summing up he reminded the jury of this direction: first, when explaining why they might award aggravated damages: “not, I emphasise, to punish the defendants, but in order to award him fair and reasonable compensation for the injury which he has received, aggravated by the defendants’ conduct”; secondly, just before the jury retired, when he expressly reiterated that they must put exemplary damages “entirely out of your mind”.

Similarly he warned the jury to ignore completely the effect of the articles on Ronson itself and to bear in mind that the three later articles went only to aggravation; the respondent was not claiming further damage to his reputation arising from them.

The final matter of importance to mention is the guidance given by the judge as to the appropriate level of damages in the case. Having pointed out that no personal injury claim was likely to attract a general damage award of more than £150,000, and having instanced awards of some £100,000 for the loss of both arms and some £45,000 for the loss of a hand, the judge referred briefly to the Elton John case (John v MGN [1997] QB 586 ) and to the respondent’s earlier action (Kiam v Neil (No. 2) [1996] EMLR 493) and continued:

The court’s powers

Section 8 of the Courts and Legal Services Act 1990 provides:

The first relevant rule of court was Order 59 rule 11(4) which applied to appeals set down after 31 January 1991 and provided:

The rule presently in force is CPR 52.10(3):

The authorities

The early authorities, in particular Sutcliffe v Pressdram Limited [1991] 1 QB 153, Rantzen v Mirror Group Newspapers Limited [1994] QB 671 and John v MGN Limited [1997] QB 586 , have been rehearsed many times in subsequent decisions and I shall content myself, therefore, with a relatively brief summary of their effect.

In Sutcliffe a £600,000 compensatory award was set aside by the Court of Appeal on the grounds that it must have been made on the wrong basis, almost certainly so as to punish Private Eye. It was the Court’s inability to reassess the damages itself that led to the enactment of section 8 of the 1990 Act.

Shortly after Sutcliffe the barrier against intervention was lowered. This was not, however, the consequence of section 8 - how could it be?: the power to reassess only arises where the Court of Appeal already ‘has power to order a new trial’. Rather it was the effect of Article 10 of ECHR and Lord Goff’s speech in Attorney-General v Guardian Newspapers Limited (2) [1990] AC 109 , 283-284, which together caused Neill LJ, giving the judgment of the court in Rantzen, to say at p.692g:

At the same time as the Court of Appeal was lowering the threshold of intervention it was also considering how best to assist the jury in its task of assessing damages. Lord Donaldson MR in Sutcliffe suggested at p.179b-c, that a jury could be guided:

This was carried further in Rantzen when the court suggested at p.694b-c:

The court, however, continued to rule out any reference to awards in personal injury cases and concluded [at p.695h-696b]:

The matter of guidance was taken still further in John . Sir Thomas Bingham MR, giving the judgment of the court (consisting also of Neill and Hirst LJJ), said at p.612c-d:

Additionally, and importantly, the court in John also concluded that the time had come when judges and counsel should be free to draw the jury’s attention to the conventional compensatory scales of award in personal injury cases, the ceiling for such awards being at that date some £125,000. At p.614f-g, the court said that: “Juries may properly be asked to consider whether the injury to his reputation of which the plaintiff complains could fairly justify any greater compensation”, and expressed the view that it is “offensive to public opinion, and rightly so, that a defamation plaintiff should recover damages for injury to reputation greater, perhaps by a significant factor, than if that same plaintiff had been rendered a helpless cripple or an insensate vegetable.”

As to ‘the process of mentioning figures’, the Court said at p.615h-616d:

The final authority requiring detailed consideration is Kiam v Neil (No.2) [1996] EMLR 493, important both for its general statements on the correct approach to quantum appeals in libel cases and also as an obviously relevant comparable for the purposes of the present case. At this stage, however, I am concerned only with the general approach.

Having quoted the court’s judgment in John (part of the passage set out in paragraph 27 above), Beldam L.J. at pp 507-508 said this:

Evans L.J., in a passage much relied upon by Mr Browne QC for the respondent, said at p.513:

Pill L.J. at p.516-517 said this:

There is, to my mind, a certain tension apparent within these various citations. On the one hand the court manifests its concern that libel damages are unhealthily high: “A road to untaxed riches …[ the ] legal process fail[ing] to command the respect of lawyer and layman alike”, as the Master of the Rolls put it in John at p 611, and in particular disproportionately high in comparison to personal injury awards. This, of course, was why John introduced the right to refer to personal injury damages and suggested that juries be guided by reference to brackets, the proposed ceiling for any libel award being the maximum recoverable for the gravest personal injuries. On the other hand the court continues to place emphasis on the importance of the jury’s role in assessing damages.

The statement in John at p 616c that “ historically, the significance of the libel jury has lain not in their role of assessing damages but in their role in deciding whether the publication complained of is a libel or no” is, perhaps, difficult to reconcile with the judgments in Kiam v Neil ; and still more so with Nourse LJ’s judgment in Sutcliffe at p 182:

True it is that in John the court suggested that the changes they were introducing would “buttress the constitutional role of the libel jury by rendering their proceedings more rational and so more acceptable to public opinion”. But this, of course, will be so only if the jury substantially accepts the bracket which the judge suggests to them and does not take too literally the comment (as here) that “the decision is yours and yours alone” – in line with the court’s judgment in John (see paragraph 27 above) that juries must be directed “to make up their own mind” as to the appropriate award.

Comparables

It is time now to summarise those few defamation cases in which the Court of Appeal has itself had to consider juries’ awards of damages in the exercise of its section 8 power. There are six in all. In five the damages were reassessed. In the sixth, Kiam v Neil, the court refused to interfere with the award. I shall mention a seventh case also, one of malicious falsehood. Chronologically they are as follows.

The plaintiff, the Conservative MP for Billericay, complained of a “mock press release” written and circulated by the defendant, Mudd, a prominent member of the local community and chairman of the Billericay Conservative Businessman’s Association, to ninety-one people most of whom knew something of the underlying quarrel between the parties. The publication suggested that the plaintiff had sought to destroy the Assocation and to humiliate the defendant out of personal spite. The tone of the release was unpleasant ( suggesting for example, that the plaintiff’s female charms were inadequate despite a hormone implant). Although a plea of qualified privilege was upheld, the jury found express malice. There was no apology. Rather Mrs Gorman had been subjected to unpleasant cross-examination which had increased her sense of humiliation. The Court of Appeal reduced the jury’s award of £150,000 to £50,000 (worth £63,000 in January 2001).

The action concerned four articles in the same issue of The People including one on the front page and a leading article, all covering the same story about Esther Rantzen’s organisation, Childline. The articles suggested that the plaintiff had protected a teacher who had revealed to Childline abuses of children occurring at a school where he taught, by keeping secret that he himself was a pervert, unfit to have any child in his care. The suggestion was that Miss Rantzen had protected the teacher as a reward for his help. In so doing she had abandoned her own moral standards; her public statements of concern for abused children were insincere and hypocritical. Finally it was suggested that she had lied when informing the newspaper that publication of the story would hamper the police investigation when the truth was that she wished to avoid exposure of her own misconduct and omissions. The defendant pleaded justification and lost. The allegations were very grave, going to the heart of the core attributes of Miss Rantzen’s character. The Court of Appeal reduced the jury’s award of £250,000 to £110,000 (£133,000 today).

The parties were doctors (respectively male and female), operating separate practices within the same building. The defendant falsely accused the plaintiff of harassing her and her staff, groping them and fondling them sexually. The allegation was made in the hearing of several of the plaintiff’s patients in the doctors’ joint waiting room. The defendant denied having suggested impropriety with her staff but sought to justify her allegation of personal harassment, alleging that the plaintiff had brushed up against her deliberately. The allegation of sexual harassment was plainly a matter of the utmost gravity for a general practitioner. There were furthermore a number of aggravating features of the case and there had been no apology. The publication, however, had been only to a very small number of people. The Court of Appeal reduced the jury’s award of £150,000 to £50,000 (£62,000 today).

The action concerned an article in the Sunday Mirror which covered two inside pages and was introduced on the front page by a headline “Elton’s diet of death” and a photograph of the plaintiff, stating that he had suffered from bulimia and was now hooked on a bizarre new diet that could kill him. It described his behaviour at a party in California where he was seen to put food in his mouth, chew it and then spit it out. The plaintiff had never been at the party and was “incensed” by the article because he had had eating and drug and alcohol addiction problems but had cured himself, publicising the facts on television. The newspaper had offered an apology but, its terms not being agreed, none was published. The claim was defended on the grounds that the words were not defamatory. The Master of the Rolls observed that “though the article was false, offensive and distressing, it did not attack [the plaintiff’s] personal integrity or damage his reputation as an artist”.

The Court of Appeal reduced the jury’s award of compensatory damages from £75,000 to £25,000 (£28,000 today) and the award of exemplary damages from £275,000 to £50,000.

The libel was published in the Sunday Times business section to a readership of some 3 million. It consists of the following short paragraph in a long article criticising the National Westminster Bank:

The article also carried the innuendo to members of the public who had bought Remington shavers relying on a money refund promise if they were not satisfied, that Mr Kiam had induced them to buy when he was in no position to fulfil the promise.

Mr Kiam was horrified to read the article. He protested vigorously and demanded an apology. Three weeks later the newspaper admitted that the report was untrue and published an apology in agreed terms. The jury awarded £45,000 compensatory damages (£51,000 today). In dismissing the defendant’s appeal the court characterised the libel as follows:

The plaintiff complained of two articles in consecutive issues of The Sunday Mirror which accused him of pimping for the KGB by organising sex with Russian prostitutes for British businessmen visiting Russia who could then be blackmailed. The defendants pleaded justification. The plaintiff conceded in evidence that he was a persistent womaniser, but denied procuring prostitutes, though a tape of a conversation with a journalist in which the plaintiff was apparently arranging an assignment between the journalist and a prostitute was introduced in evidence (the plaintiff’s explanation being that he was either drunk or fantasising). The defendants called no evidence and the judge withdrew from the jury such parts of the plea of justification as suggested contact with the KGB. The Court of Appeal reduced the jury’s award of £100,000 to £40,000 (£44,000 today). In doing so they held that the jury must have concluded that the charge of procuring prostitutes was made out in part and that there were other matters which went to reduce the damages. Hirst LJ, giving the only reasoned judgment, said at p 259:

The claimant in this malicious falsehood case was an Iranian woman who worked as a teacher at an Iranian religious school in London. The defendant was her former lover. He created a set of mock-up documents using photographs of the claimant superimposed on pornographic pictures from a magazine and inserting words which suggested that the claimant was advertising sexual services. These were sent to the daughter of a newspaper editor. The newspaper did not publish but the documents were circulated widely in the Iranian community in London. The judge awarded £20,000 as general damages for malicious falsehood but said that, had the claim been brought in defamation, he would have awarded £50,000. The Court of Appeal described this as an “eminently reasonable” figure.

Increase in Personal Injury Damages

The one other important consideration to be noted before finally coming to the central question raised by this appeal is that in 2000, by the Court of Appeal’s decision in Heil v Rankin [2000] 2WLR 1173 , the maximum general damage award available in personal injury cases has been increased from £150,000 to £200,000 – see the JSB Guidelines, 5 th Edition.

The rival arguments

Miss Victoria Sharp QC (junior counsel rather than leading counsel instructed below) submits that the award here was plainly excessive, some 30% higher than the upper limit of the judge’s bracket which itself she contends was too high and the whole of which in any event postulated the jury finding “the more serious defamatory meanings…suggested by Mr Kiam”. Miss Sharp furthermore suggests that this libel could not possibly be regarded as worth double the award approved in Mr Kiam’s first case, Kiam v Neil . That, she submits, was an unusually close comparable; both The Sunday Times’ defamation and its apology were included in the jury’s bundle in the present case. This award, she argues, is also clearly too high in comparison both with the much graver libel in Rantzen and with general damage awards in personal injury cases, the ceiling for which was only £150,000 at the time of this award and is even now only £200,000. Justification, Miss Sharp points out, was never pleaded; rather the only defence was that the article was not libellous, so that there was less than the usual need for vindication. Furthermore, although late in the day, there was both the offer of an apology and a substantial offer of damages (£50,000). Finally, the most serious of the pleaded meanings, the innuendo, would have been understood only by a small proportion of the overall readership.

Mr Browne QC submits that particular respect must be paid to a jury’s verdict where, as here, the issues have been presented to it accurately and dispassionately in an unimpeachable summing up. He reminds us of the Master of the Rolls’ dictum in J ohn at p607 that:

and submits that this libel by its natural and ordinary meanings

damaged the respondent’s professional reputation, and by innuendo attacked his personal integrity (not least, for example, in the eyes of the 1500 staff at Ronson whose jobs were at stake). He argues that this was a graver libel than in Kiam v Neil and that it was attended by altogether more serious aggravating features, not least the appellants’ refusal until the very eve of trial to offer any form of apology, their publication of further untruthful articles and finally their counsel’s inflammatory closing speech. Above all, Mr Browne reminds us that the jury (and, indeed, the judge who decided what bracket to suggest to the jury) were present throughout this five day hearing, listening to all the witnesses and speeches and observing their effect on the respondent, whereas we, of course, were not. The judge himself, moreover, refused permission to appeal, observing that “this was an award by the jury which, although higher than I suggested would be appropriate, was not clearly extravagant”.

The correct approach

This court can only interfere with a jury’s award if it is “excessive”. (We are not here concerned with the other limb of the power, to vary an “inadequate” award). The question for the court is whether a reasonable jury could have thought the award necessary to compensate the claimant and to re-establish his reputation. If the answer is “no”, the award is to be regarded as excessive and the court will substitute for it a “proper” award. But what is a “proper” award? Is it whatever sum the court thinks appropriate, wholly uninfluenced by the jury’s view? Or is it rather the highest award which the jury could reasonably have thought necessary? I take it to be the latter. In Gorman, for example, where the court substituted an award of £50,000 for the jury’s award of £150,000, Neill LJ concluded that “on no possible view could the award of damages exceed £50,000”, Rose LJ agreeing “that a proper award cannot exceed £50,000”. The Court of Appeal should surely take as much account as it properly can of the jury’s attitude to the case and only on this approach would it be doing so.

To my mind, therefore, this court should not interfere with the jury’s award unless it regards it as substantially exceeding the most that any jury could reasonably have thought appropriate.

When one comes to consider the seven “comparables” summarised above and stands back from their detailed facts, the following points stand out. Only four of the seven cases concerned national newspapers: Rantzen , John, Kiam v Neil and Jones v Pollard. Of those four libels, that in John did not go to the “core attributes” of the claimant’s personality and that in Jones was to a substantial extent justified. The substituted award in Rantzen (updated to today's value) exceeded the award in the present case by £28,000. The award in Kiam v Neil was approved but so too might have been a larger award and in any event the aggravating features in the present case were substantially more serious. Yet more striking is this: in three of the five cases in which this court interfered, – Gorman, Houston and John – the sums substituted were only one third of those awarded by the jury. In the other two cases the jury’s awards were reduced by more than half – in Rantzen from £250,000 to £110,000, in Jones from £100,000 to £40,000.

In the present case Miss Sharp submits that the most that any reasonable jury could have awarded would have been £50,000. If that was so, of course, then here too the damages would be reduced by more than half. But that would mean that the jury had been seriously misled by the judge’s suggested bracket and that he is open to criticism no less than they are.

This, so far as counsel’s experience goes, is the first section 8 case to be considered by this court in which the judge has suggested to the jury a bracket for damages. Plainly the bracket itself is not sacrosanct. But it can hardly be thought irrelevant. For one thing it must inevitably have influenced the jury. For another, it reflects the judge’s own view of the gravity of the libel - and he like the jury was present at the trial.

With these thoughts in mind let me finally state my own conclusions on the appeal. I can now do so comparatively briefly:

i) The judge’s bracket seems to me entirely reasonable. Certainly, having regard to his advantages over us, I am not prepared to fault it.

ii) Given that the premise of this bracket was the jury’s acceptance of the more serious suggested defamatory meanings, I take the judge’s own view to be that an appropriate award here would have been some £60,000 (the middle of his bracket).

iii) That, however, is not to say that £60,000 is the correct (or “proper”) award here. Rather, as already stated, the proper sum is for this purpose the most that any reasonable jury could have awarded. If, as I would hold, the bracket of £40,000-£80,000 was reasonable, so too on any view would have been an award of £80,000. One must then bear in mind “the possibility that [the jury’s] judgment is to be preferred to that of the judge” (see the passage cited in John paragraph 27 above), a very real possibility given this court’s emphasis in Kiam v Neil upon the continuing pre-eminence of the jury’s role in assessing libel damages. In short the jury’s award should not be condemned as “unreasonable” unless it is out of all proportion to what could sensibly have been thought appropriate.

iv) Although I have not found this an easy case and confess to having initially thought the award “excessive”, I have finally reached the opposite conclusion. I am influenced most particularly by three considerations. First, the practice of showing deference to damages awards even when made by judges and even when assessed in the more standardised field of personal injuries – see for example Pickett –v- British Rail Engineering [1980] AC 136 , 151 and 172; manifestly a far greater deference must be shown to jury awards in defamation cases. Secondly, I am struck by the large percentage differences between the juries’ awards and those substituted for them in the few section 8 cases in which this Court has been prepared to intervene. Thirdly, and, as I recognise, to a degree fortuitously, the effect of Heil v Rankin has been to raise the ceiling for juries’ libel awards to almost twice that now under appeal in this case; leaving therefore a very substantial margin to accommodate the yet graver libels which have to be slotted into the overall bracket.

v) None of this is to say that the present award should itself henceforth be regarded as a true comparable; only that it is not so far removed from my own (or evidently, the trial judge’s) view of the true value of the claim as to justify the exercise of the section 8 power.

Postscript

Given that this is the first bracket to have been considered by the Court of Appeal I would venture these further reflections on the use of brackets and, indeed, the use of comparables generally.

Although the court in John (in the passage cited at paragraph 27 above) saw no reason why counsel should not indicate to the jury the level of award they respectively contended to be appropriate, Pill LJ in Kiam v Neil (in the passage cited in paragraph 31 above) foresaw “… the danger in inviting juries to make comparisons with other cases, comparisons which would inevitably become elaborate as each party emphasises particular but different features of those other cases” so that “a battle of comparables in front of a jury may produce its own injustice as well as being time consuming and costly.” In practice, we are told, counsel in libel cases do not ordinarily address the jury on libel comparables or, indeed, mention figures at all save that counsel for the defendant for obvious reasons sometimes refers to personal injury awards. This seems to me entirely sensible and, indeed, commendable and for my part I think that generally speaking the only detailed guidance on figures should come from the judge.

In the present case, it appears, the judge indicated to counsel before their closing speeches his own proposed bracket without at that stage having invited or received any assistance on the matter. His initial bracket was £45,000- £80,000 (marginally higher, therefore, than the final bracket suggested to the jury). Counsel then reacted, counsel for the defendants with “extreme alarm” to the figure of £45,000 as the bottom of the bracket; Mr Browne for the claimant by indicating that he intended to suggest to the jury that the claim was worth at least double the £45,000 award made in Kiam v Neil. It would seem to me preferable for the bracket to have been more formally discussed before it was fixed, with each side being given a proper opportunity to argue the matter after having exchanged authorities and brief skeleton submissions indicating how they proposed to argue the matter. If, as in the present case, either side suggests that there is a close comparable in point, consideration should be given to handing to the jury an agreed note identifying the particular points which each side wishes to emphasise. Otherwise, counsel should not generally refer to comparables and, if they do, the judge should be alert to explain to the jury how these are being properly taken into account in his own bracket.

Result

I would dismiss this appeal.

Lord Justice Waller :

I agree that for the reasons given by Simon Brown LJ that this appeal should be dismissed.

Naturally a comparison between the general damages awarded for serious personal injuries with those awarded in libel actions gives cause for anxiety. Furthermore at first sight the award seems a very high one. But what weighs with me on the critical question whether this court should interfere are the following factors:-

i) the jury in this case were made aware (as is now the practice) of the sort of damages that would be awarded in personal injury cases;

ii) in an impeccable summing up they were given a bracket of £40,000 to £75,000-£80,000, but told “I have to stress that the decision is yours and yours alone”

iii) “If the jury make an award outside any bracket indicated real weight must be given to the possibility that their judgment is to be preferred to that of the judge.” (see the passage quoted from the judgment of Sir Thomas Bingham M.R. in John quoted at paragraph 27 of Simon Brown LJ’s judgment);

iv) for the Court of Appeal to interfere, the award must be one which no jury properly directed could have arrived at or as the notes in the former Annual Practice continued and without citing the authorities there referred to:

v) the judge who had provided the bracket and presided over the five-day trial with the opportunity of getting a full “feel” of the case which this court is simply not in a position to do, in refusing permission to appeal said: “… this was an award by the jury which, although higher than I suggested would be appropriate, was not clearly extravagant”.

I have read the draft judgment of Sedley LJ and although I understand the strength of his views, it seems to me that whilst it remains the tradition for damages in defamation to be assessed by the jury, one must be careful in assuming that there should be the close analogy with personal injury awards which he assumes. We simply do not know precisely what views juries hold on such things. The verdict of a jury properly directed should not lightly be overturned in the court of appeal. For reasons which I do not understand to differ from Simon Brown LJ in my view this court should not interfere with the jury’s award in this case.

Lord Justice Sedley :

The law governing general damages depends upon the fiction that suffering can be translated into money. Because it is a fiction, damages as a whole are arbitrary. But as between damages for one kind of injury and another, both legal certainty and elementary justice require careful regard to be had to relativities.

It was because of the vagaries of jury verdicts and awards in personal injury cases that the courts were given power, initially in 1854 (see Ford v. Blurton (1922) 38 TLR 801, CA); then by section 6 of the Administration of Justice (Miscellaneous Provisions) Act 1933, and presently by section 69(3) of the Supreme Court Act 1981, to grant or refuse jury trial in such actions. In the exercise of this power the courts have since the decision of this court in Ward v. James [1966] 1 QB 273 adopted a uniform policy of having both liability and quantum tried by judge alone.

One intended consequence of this development has been a reasonably coherent tariff of awards for personal injuries, which since 1992 has enabled the Judicial Studies Board to publish a booklet, Guidelines for the Assessment of General Damages in Personal Injury cases , now in its fifth edition. A second consequence has been that the traditional inhibition on the citation of comparables to trial courts has gone.

It was the repeated contrast between the elevated sums awarded by juries in libel actions and the modest sums awarded by judges for personal injuries which led first to adverse public comment (though its main source, the media, could not be said to have been disinterested) and then to judicial intervention. The critical decision was John v. MGN Ltd. [1997] QB 586 . There a jury had awarded a popular singer-songwriter £75,000 compensatory damages and £275,000 exemplary damages for a newspaper story which untruthfully asserted that he was following a bizarre and probably harmful diet. In 1993, when the jury made this award, a claimant reduced by brain injury to a vegetative state might at highest have recovered general damages of £125,000; for a spinal injury causing permanent spastic quadriparesis or unremitting headaches, at most £50,000; for the loss of both arms or both legs, £100,000.

It was plain that the law was coming into disrepute and that something needed to be done. No doubt a freeing-up of damages awards generally was one possibility; but the policy adopted by this court to the same end in John was to level libel awards towards comparability with personal injury awards. These, while open to criticism for being ungenerous, are intended to be sensitive to inflation: see Heil v. Rankin [2000] 2 WLR 1173 . The wide latitude given to juries before John v. MGN was decided in December 1995 was held by the European Court of Human Rights in Tolstoy Miloslavsky v. UK (1995) 20 EHRR 442 not to offend against the requirement of Article 10 of the Convention that any restraint on free expression must be prescribed by law. The methodology of damages introduced by John v. MGN is therefore certainly Convention-compliant.

But it is apparent that the decision in John v. MGN has not succeeded in its avowed purpose. Counsel have helpfully prepared for us a table of recent indications given by trial judges to juries of suggested upper limits to any awards they make for defamation. In three recent high-profile cases the figure has been £150,000. For a disabled claimant that is a sum which represents both grave trauma and lifelong suffering. In others, indicating an upper end of £50,000 or £75,000, judges have told libel juries that in personal injury terms this represents the loss of a limb or paraplegia. Generally, though not always, jury awards have stayed within the figures suggested by the judge. But looking at these figures, it seems to me that the train has left the station again and is now accelerating.

It may be that the re-escalation of libel damages is due in part to the fact that it began from a high base. This court replaced the enormous award in John v. MGN Ltd. with a sum of £25,000 general damages and £50,000 exemplary damages. Since I am dissenting, it will not be disruptive of precedent if I respectfully remark that in 1993, £25,000 was more than a claimant would get for the loss of sight in one eye, or for any but the gravest facial scarring. It was the sort of sum awarded to a person so psychiatrically traumatised as to face many years, possibly a lifetime, of inability to cope with relationships and of vulnerability to further trauma. In a case in which, as the court pointed out, the libel had neither attacked the plaintiff’s personal integrity nor damaged his artistic reputation, how a figure of £25,000 articulated with the personal injury tariff is not immediately apparent and is not explained in the judgment of the court.

Restarting from this already generous base, there has been a perceptible process of what Americans might call compensation creep, pushing up not only the brackets given by judges to juries but the base from which this court is now invited to start its reconsideration of arguably excessive awards.

Even in this inflationary situation I do not consider that the award of £105,000 to Mr. Kiam can be regarded as anything but excessive. It is some 30% above the top of the bracket proposed by the judge, a bracket which in itself –for the reasons I have been considering – is unrealistically high, and no less so for being commensurate with other recent judicial directions. Even if one takes the jury award of £45,000 upheld by this court in Kiam v. Neil (No. 2) [1996] EMLR 493 as a starting point, I do not consider that any award of general damages exceeding £60,000 can be sustained in the present case.

To be sure, this was a spiteful, insolent and damaging story, based on slapdash research, published without any justification and without even asking the claimant about it. It was repeated more than once and was defended in one way or another until the end of the trial. All of this I accept and so, clearly, did the jury. It was their verdict in his favour which vindicated Mr. Kiam’s good name. There was no ongoing damage that anybody could point to, except no doubt that some of the mud would have stuck in some people’s minds. But substantially it was all over within 14 months of the original publication. To put this, by an award of £105,000, on a compensatory par with the wreckage of a human life by brain damage or the loss of both legs below the knee is, in my opinion, indecent. Even a sum of £60,000 represents considerably more than, for example, a young woman would get for severely disfiguring facial scarring.

In this situation, it is relevant to ask what has gone so fundamentally wrong. The answer is not very far to seek. A fair analogy with personal injury damages would require judges to point out to juries that the compensation for the sometimes unspeakable grief of a bereavement is set at present by law at £7,500 (Fatal Accidents Act 1976, s.1A(3)(5)), and that the humiliation and wretchedness of being traduced in public with no chance to reply, bad as that is, is unlikely to be worse than this. The judge might then turn to the judgment of Hirst LJ. in Jones v. Pollard [1997] EMLR 233, 243, where a checklist of compensable factors advanced by Mr. Andrew Caldecott QC and accepted by counsel both in that case and in this is cited with approval:

This list, it should be remembered, is not a cash register on which a series of sums of money accumulates. Most of what it contains is subsumed in the hurt for which the basic award compensates. Special damage is separately quantifiable, so that a person who has, for example, lost his job as a result of a lie published about him is entitled to full but separate compensation for this. Mr. Kiam suffered no such loss.. The vindication of the claimant’s reputation is the principal function of the verdict itself: it will be double-counting if any but a modest element of the general damages goes to this.

Perhaps most important is the question of wilful or reckless behaviour on the defendant’s part in publishing the libel. As Mr. Caldecott’s list makes clear, this feeds into general compensatory damages only to the extent that it has made the wound to the claimant worse. It is, of course, humiliating to be lied about in the press without even having been asked about the truth of the story; but at least on one view it is more, not less, humiliating to be lied about after having told the authors of the libel that it is completely untrue. Where the deliberate or reckless publication of untruths properly counts in libel is in opening the door to an award of exemplary damages. But in the present case, and without cross-appeal, exemplary damages were withdrawn by the judge from the jury.

What I strongly suspect has happened in this case is understandable, but it is also appealable. Mr. Browne legitimately opened his pleaded case for exemplary damages in full to the jury. Significant passages of his speech denounce the newspaper’s cavalier conduct in powerful and resonant terms. What is more, even when at the end of the trial the judge withdrew the issue of exemplary damages, there remained for the jury the charge of malicious falsehood as an alternative to libel. In order to deal with this the judge had to explain to the jury the ingredients of malice – publishing a false statement without knowing or caring whether it is true or false or, worse, knowing it to be untrue – and the description may well have rung fresh bells with the jury, supported as it was by Mr. Browne’s closing submissions. That is probably one reason for the high award. Secondly, juries in these cases probably consider that they are dealing with wealthy media organisations for whom a four- or five-figure sum is little more than petty cash. They ask themselves, and judges and lawyers too ask themselves, what is the use of setting damages at a level which makes libel cheap at the price.

The law’s answer, which has its own anomalies, is that in a case where the evidence reaches a sufficiently cogent level to attract an award of exemplary damages such a defendant can be taught that libel does not pay. The principal anomaly is that the penalty goes in to the claimant’s pocket as a pure windfall. But in a great many cases proof of a cold-blooded cost-benefit calculation that it was worth publishing a known libel is not there, and the ineffectiveness of a moderate award in deterring future libels is painfully apparent. It is this, I believe, that is leading both judges and juries once more to lift the level of general damages for libel into a different league from personal injury damages, at least in cases like the present where the newspaper has not simply got its facts wrong but has behaved outrageously from start to finish. Although this was a predictable by-product of any serious restriction of compensatory damages for libel, it is strangely enough a factor which, so far as counsel have been able to show us, is not addressed in any of the appellate decisions on the limitation of libel damages. Judges, juries and the public face the conundrum that compensation proportioned to personal injury damages is insufficient to deter, and that deterrent awards make a mockery of the principle of compensation.

I do not, even so, believe that there is any necessary incompatibility between the moderation of compensatory awards for libel and the punitive and deterrent purposes which exemplary damages serve. Punishment in a modern society is not the business of private individuals: it is a matter for the state. If a motorist drives recklessly he will have to compensate any victim for the injury he inflicts, but it is to the state that he answers by way of punishment for his abuse of the right to drive a vehicle. Where it is appropriate that the victim should be fully compensated for his injury and loss, it is inappropriate that he should pocket the proceeds of punishment. If, comparably, the enormous power of the news media to misinform and to injure is to be matched with legal responsibility going beyond simple compensation and involving punitive measures, it is likewise to the state that the media ought to answer. A defendant who so conducts himself as to deserve punishment by law can and should be tried with the full safeguards of due process and proof beyond reasonable doubt. He should also be prepared to face the consequences of being convicted.

It is Parliament who alone can decide whether this should happen. What needs unravelling is the single proceeding in which compensation and punishment have for centuries have been rolled together, and which is not appropriately adapted, either in its process or in its outcome, to the increasingly fundamental distinctions between the two. No doubt, as Lord Denning MR said in Ward v. James , jury trial has no equal when honour or integrity are at stake. But when it comes to damages, the three virtues which he went on to enumerate – assessability, uniformity and predictability – also matter a great deal. Something needs to be done about the conflict between the need for fair but balanced compensation for victims of libel and the equal and opposite need to prevent libel from paying. It is possible within the present law for damages to be assessed by judges; but the underlying tension between compensation and deterrence is something, as it seems to me, that Parliament alone can resolve. . So far as the courts are concerned it is now apparent that attempting to reduce the bracket produces an understandable but impermissible reaction against the effects of making libel cheap to commit.

For my part, therefore, I would allow this appeal on the narrow ground that even by comparison with other libel awards, but especially by comparison with personal injury awards, the figure awarded by the jury as compensatory damages is wholly excessive. Although I have given £60,000 as the highest figure which I believe to be defensible in the present state of law and practice, the general level of compensatory libel damages which it represents is also in my view indefensible.