Warren v Random House Group Ltd (Nos 1-3) (CA) [2008] EWCA Civ 834; Tesco Stores Ltd v Guardian News & Media Ltd and Rusbridger [2008] EWCH (QB)

A couple of defamation cases towards the end of last year evidenced a clear willingness on the part of the courts to ensure the continued use of a procedure intended to facilitate the relatively quick and cheap settlement of libel actions.

The Offer of Amends (OOA) procedure is provided for in sections 2 to 3 of the Defamation Act 1996. A sort of ‘get out of jail free’ card, it enables a defendant who has simply made an honest mistake or is otherwise unable or unwilling to defend a libel claim to put his hands up at an early stage and to admit liability. It does not entitle him to get off scot-free, as he must agree to apologise and to pay the claimant damages and costs.

The offer can be withdrawn before it is accepted. If it is not accepted, it is a complete defence at trial unless the claimant can prove that the defendant published maliciously, in other words knowing that the allegation was false. If the offer is accepted in principle, then the precise terms of the apology and the amounts of costs and damages are negotiated. If agreement cannot be reached, the defendant may publish a unilateral apology and the court be asked to decide the financial issues.

The regime can be of benefit to both sides, enabling the defendant to avoid lengthy and costly litigation, while providing the claimant with the remedies he seeks at the earliest opportunity instead of at the end of a lengthy and potentially stressful trial.

However, the cases of Warren and Tesco threatened to throw a spanner in the otherwise conciliatory works of the regime. The former asked whether a defendant could take back his offer once it had been accepted, while the latter queried whether a claimant could park his decision on an OOA indefinitely until trial.

Justification defence Warren v Random House Group Ltd was a libel action brought by boxing promoter Frank Warren over an autobiographical book – Ricky Hatton: The Hitman, My Story – published by Random House and written by the boxer Ricky Hatton (pictured) and ghost-writer Niall Hickman; neither of the writers were joined as parties. The claimant complained about three allegations in the book, two of which the defendant sought to justify and the third in respect of which it made an OOA.

The claimant contended that the allegation complained of meant, in summary, that he had conned boxer Vince Phillips into accepting a pitiful fee for a fight against Hatton by falsely claiming that American TV was not interested in televising the fight.

An OOA was made and accepted and a statement in open court based on an agreed apology was made. Before compensation was agreed, Random House obtained evidence which it alleged was capable of proving the allegation, and accordingly sought to resile from the OOA and to substitute a justification defence.

Mr Justice Gray said it could not. He rejected the defendant’s argument that its rights to a fair trial and to freedom of expression, articles 6 and 10 of the European Convention on Human Rights respectively, had been infringed and found that, on advice, Random House had entered into a binding contract which had been partially performed. The defendant appealed.

The Court of Appeal disagreed that there was a legally binding contract: ‘We are inclined to think that it is not a contract in the sense of creating contractual rights and obligations, because it contains express provisions as to what should or should not happen next and the court retains a role,’ explained Master of the Rolls Sir Anthony Clarke.

The court preferred to liken the position to circumstances in which a party voluntarily gives an undertaking to the court on settlement of litigation and then seeks to vary it. This should only be allowed in special, or exceptional, circumstances. On the facts of the case, it was unable to find any to permit resiling from the bargain made.

As regards the defendant’s article 6 rights, ‘the offer was both informed and unequivocal and was made and accepted in accordance with sections 2 to 4 of the 1996 act. There is no relevant public interest or other principle which leads to the conclusion that the appellant has been deprived of a right to a fair trial’. And as for article 10, ‘although the defendant has to pay compensation… there is nothing to prevent him from repeating the words complained of’ (the scheme does not require or provide for any undertaking not to repeat to be given with the OOA), so its freedom of expression had not been curtailed. Accordingly, the appeal court found the OOA procedure to be entirely compatible with the Human Rights Act 1988.

‘A party does not have to publish defamatory material without checking whether or not it is true. Thereafter, he does not have to make an offer of amends. The purpose of the scheme is to engender compromise and the time when all reasonable enquiries should be made is before an offer to make amends is made,’ set out Clarke.

He referred to the ‘rare nature of the case in which it is likely to be appropriate to relieve a party of the consequences of his bargain if, as here, it was freely entered into’. He concluded: ‘Other things being equal, parties should be kept to their bargain.’

Get off the fenceThe boot was on the other foot in the case of Tesco Stores Ltd v Guardian News & Media Ltd and Rusbridger, as the claimant sought to argue that it was entitled to suspend its decision on an OOA indefinitely until trial.

In February 2008, the supermarket chain brought libel and malicious falsehood proceedings – specifically arguing that the defendants dishonestly published the allegations knowing them to be untrue – against the editor and publisher of the Guardian over articles which alleged that it had set up an offshore tax avoidance scheme to avoid £1bn in corporation tax. The defendants accepted that the allegation was wrong. As Mr Justice Eady set out in his judgment, it was the defendant’s case that ‘the avoidance by Tesco in this respect ran not to a billion pounds – or anything like it – but to tens of millions of pounds’, and that it was not in respect of corporation tax but in relation to stamp duty tax. Therefore, it published a clarificatory article to this effect at the beginning of May and made an OOA just before the defence was served on 16 May 2008.

The act does not include any time limit within which an OOA should be accepted. In this case, the claimant neither accepted nor specifically rejected the offer, despite requests from the defendants for clarification. Accordingly, in July, the matter went before Mr Justice Eady on application by the defendants, requiring the claimant, in effect, to get off the fence.

The judge explained that ‘the philosophy underlying parliament’s introduction of the offer of amends regime contained in sections 2-4 of the 1996 act was to enable the parties in defamation proceedings, or even prior to the issue of proceedings, to achieve a relatively speedy and relatively inexpensive disposal of a complaint of injury to reputation, where the defendant was prepared to acknowledge that it has published defamatory allegations which were essentially inaccurate’. It was also intended ‘to impose discipline on the parties, in the sense that the complainant would have little choice but to accept an offer of amends in order to achieve vindication, or reject it and take on the burden of proving malice’.

In this case, ‘the principal allegation… is accepted to have been false… The defendants also admit that the meanings pleaded by the claimant are defamatory. This would therefore, on its face, appear to be a classic case for an offer of amends’. However, ‘the claimant has adopted the stance that it is entitled to keep the offer of amends open as long as it wishes for acceptance or rejection’, and that it was entitled to proceed with its malicious falsehood claim, as the judge put it, ‘for no better reason than to have the court’s finding on malice’.

Mr Justice Eady did not find this acceptable. ‘It would make a nonsense of the underling policy if it were possible for a claimant to go ahead with proving malice while keeping the offer available until the conclusion of the trial. Nothing in the drafting suggests such a possibility. Moreover, as a matter of general public policy, it has long been recognised that one should not "blow hot and cold" in litigation by adopting contrary positions.’ The claimant’s reputation could be fairly vindicated through the OOA and appropriate compensation could be assessed through the OOA regime. He consequently stayed the malicious falsehood claim. The judge queried: ‘How is the court to approach the question of time limits in the absence of any statutory provision?’ Drawing an analogy with the law of contract, he considered that a decision one way or the other on an OOA should be made ‘within a reasonable period’. And that – to run out the old judicial chestnut – ‘is likely to depend on the particular circumstances of the case’. Sometimes it might require the claimant ‘to explore the exact nature of the offer and the consequences of accepting it’ but it would not be legitimate ‘to hold up the decision… to call for information or disclosure of documents, relating to the defendant’s state of knowledge or the quality of its journalism’.

There may be a rather thin line between what will be an acceptable amount of time to consider the position fully and what will be an excessive time used to try to evidence that the defendant was malicious. But the practical effect of the decision is that, to avoid the regime becoming unworkable, the claimant is not entitled to have his cake and eat it.

In Warren, the defendant had said sorry relatively early but later unsuccessfully sought to resile form the bargain it had made. In Tesco, the claimant was ordered not to dally in making up his mind whether to accept the apology offered. The two decisions clearly evidence the courts’ desire to fulfil parliament’s purpose of ensuring that this regime allows for a speedier resolution of what might otherwise be lengthy and costly defamation actions. And the courts are unlikely to apologise for that.

Amber Melville-Brown is of counsel, media and culture – litigation, at Withers in London