Media law

America or Australia? that is the question

Joseph Gutnick v Dow Jones & Company (2002) December

This case, heard before Australia's highest court, regarding an Australian claimant and a US publisher, is of greater interest to libel lawyers in the UK than one might imagine, given that it relates to that insidious, omnipresent phenomenon, the Internet.

Whether or not this decision is a disaster for publishers, as some commentators have said, it is an important case in that it restates the general principles of publication and confirms they apply to the Internet as to any other form of communication of a defamatory statement.

This long-standing principle provides that publication takes place not where the libel is created, but where it is read.

An easy-to-grasp example is of a defamatory letter.

This does no harm when penned and popped into the post, but the poison begins its damage when the letter is opened and read by a third party.

In this case, Dow Jones sought to argue that the normal principles were not appropriate to the Internet, that publication should take place where the article first became available and that this rule should be applied globally.

The case arose out of the publication in Barron's Online - an edition of the US magazine, published on Dow Jones' subscription Internet news site, www.WSJ.com - of an article which Joseph Gutnick complained was defamatory of him.

Mr Gutnick lives in the Australian state of Victoria, and while conducting business outside the country, including in the US, he had his headquarters in Victoria and conducted much of his social life there.

He agreed to limit his damages to those flowing from the publications in Australia alone.

The principal issue of where the material of complaint was published, would affect which laws were to be applied and the jurisdiction in which the proceedings should be brought.

Given the differences in the laws of defamation around the world, including between the US and Australia, this was likely to have had a significant impact on the standards applied, the defences run and on the eventual outcome of the case.

While the claimant argued that publication took place in Australia, where the information was downloaded from the Internet, the defendant argued that publication occurred at the Internet servers maintained by it, in the US state of New Jersey.

It is not hard to understand the vehemence of Dow Jones' argument that publication took place in the US.

There, freedom of speech carries much weight.

Publishers have in their armoury the public figure defence, the actual malice standard, the single publication rule and a reverse burden of proof.

Dow Jones argued that practical considerations meant that the claimant's proposition that Internet publication takes place where the libels are downloaded, put publishers in an almost impossible position.

They would have to be aware of the libel laws of any country in the world from which an article could be downloaded; there are 'no boundaries which a publisher could effectively draw to prevent anyone, anywhere, downloading the information it put on its Web server'.

However, despite the defendant's protestations, Chief Justice Gleeson, and Justices McHugh, Gummow and Hayne saw little difference here than at the advent of other methods of mass communication.

In a joint judgment, they ruled that 'the problem of widely disseminated communications is much older than the Internet and the world-wide Web.

The law has had to grapple with such cases ever since newspapers and magazines came to be distributed to large numbers of people over wide geographic areas.'

In his judgment, Mr Justice Callinan also said the defendant's proposed approach was open perhaps not to abuse, but to unwelcome practices at the expense of claimants: 'Publishers would be free to manipulate the uploading and location of data so as to insulate themselves from liability in Australia or elsewhere; for example, by using a Web server in "defamation free jurisdictions" or, one in which the defamation laws are tilted decidedly towards defendants.

Why would publishers, owing duties to their shareholders to maximise profits, do otherwise?'

Despite various practical concerns raised by Dow Jones, including uncertainty for the publishers and a potential multiplicity of claims, the High Court judges, variously, disposed of them.

A claim for substantial damages would only be made if the claimant has a reputation in the place where the publication is made; claimants are unlikely to sue in a jurisdiction in which they will be unable to enforce the judgment against the assets of the defendant; the suggestion that a publisher would have to consider the laws of every country 'from Afghanistan to Zimbabwe' was unreal; 'in all except the most unusual of cases, identifying the person about whom the material is to be published will readily identify the defamation law to which that person may resort.'

In considering the fundamental principle 'whether the development of the Internet calls for a radical shift in the law of defamation', Mr Justice Callinan held that arguments about the ubiquity of the Internet seemed to include, on the defendant's part, 'more than a suggestion that any attempt to control, regulate, or even inhibit its operation, no matter the irresponsibility or malevolence of a user, would be futile, and that no jurisdiction should trouble to do so'.

This argument found little favour with him.

Neither did the submission that by having the matter dealt with under the laws of Australia rather than those of the US - which 'leans heavily, some might say far too heavily, in favour of defendants' - the defendant would be deprived of the Constitutional protection available in the US.

He restated the principals of Australian law which, rightly in his opinion, place 'real value on reputation and views with scepticism claims that it unduly inhibits freedom of discourse'.

Damage occurs 'at the place (or the places) where the defamation is comprehended'.

The court was not to be shaken from that view or from the view, acknowledged by the defendant, that to succeed it had to show that these long established principles of publication should be departed from for the Internet.

In the court's view, the defendant had not done so and the appeal was dismissed.

When the Internet first thrust its way into society, it was feared and misunderstood, on the one hand, and seen as a modern Messiah by others.

In his judgment, Mr Justice Kirby quoted from our own Lord Bingham of Cornhill (writing in Collins's The Law of Defamation and the Internet) saying the Internet will require 'almost every concept and rule in the field...

to be reconsidered in the light of this unique medium of instant worldwide communication'.

While acknowledging that the appeal in Gutnick 'enlivens such a reconsideration', and that this fundamental role of publication had been reconsidered, Mr Justice Kirby nevertheless agreed with his fellow judges that following the logical conclusion of the existing law, the appeal failed, although that did 'not represent a wholly satisfactory outcome', and that 'intuition suggests that the remarkable features of the Internet - make it more than simply another medium of human communication'.

Concluding his judgment, Mr Justice Kirby appeared to suggest that consideration of the various issues, technological, legal and practical that this matter raises might be more appropriate for national legislative attention and international discussion, suggesting a glimmer of hope for those championing the cause, that perhaps the fight to change the law in this regard is not over yet.

Mr Justice Kirby said: 'Where large changes to settled law are involved, in an area as sensitive as the law of defamation, it should cause no surprise when the courts decline the invitation to solve problems that others, in a much better position to devise solutions, have neglected to repair.'

By Amber Melville-Brown, Schillings, London