Deflating defamation damages - judge nails offer of amends procedure

Jimmy Nail v (1) Geraint Jones (2) Harper Collins Publications Ltd

The Offer Of Amends procedure (OOA) under section 2 of the 1996 Defamation Act, was recommended by the Neill Committee in 1991 to provide defendants with an early exit route from libel litigation.

While its use got off to a fairly slow start, this judgment of the experienced, specialist libel judge, Mr Justice Eady, may make it a much more attractive prospect for defendants.

He indicated that defendants should be financially rewarded for using the procedure, with a significant reduction - in this case 50% - of the damages that they would otherwise have to pay.

Jimmy Nail is a film and television actor.

He is probably best known for his role as Oz, an unemployed, Tyneside bricklayer and a loud-mouthed yob, in 'Auf Wiedersehen Pet'.

He sued over allegations that he progressed, in his counsel's summary, from 'a dog-meat eating yob, who engaged in grubby obscene sexual behaviour...

to heartless prima donna'.

No doubt Mr Nail sued to show that his on camera characters were far removed from the real man.

The allegations had been made in a biography, published by Harper Collins in 1998, and later in the News of the World in 2002.

The allegations were various in nature and degree of damaging impact, but they were false and distressing for Mr Nail to read and explain to his partner and young sons.

He had not originally sued over the book - or over other articles published in four separate newspapers at the time, which had not been drawn to his attention - hoping that it would all simply die a death.

He also wanted to be able to stagger his financial commitments to his solicitors - he was at the time also pursuing remedies against the Daily Mirror for another publication by it and in respect of material broadcast on a radio programme derived from the Mirror story, and articles in the Newcastle Sunday Sun and the Daily Mail.

As we know, libel litigation can be expensive.

But when the News Of the World article coincided with the first of a new series of Auf Wiedersehen Pet, Mr Nail took action.

The defendants all made unqualified offers to settle the claims under the OOA procedure, but the terms of the settlement offers could not be agreed on.

An OOA needs simply to comprise the bare bones of the offer, to provide and apology and/or correction, a sum of damages and costs.

Given the uncertainly as to the exact terms, lengthy haggling can sometimes ensue, over the terminology, size and location of the apology, the quantity of damages and the level of costs.

While it could be this uncertainly that has deterred defendants from making offers, it is less likely to deter claimants from accepting them, as an unaccepted OOA is a complete defence to a libel action.

Where the terms cannot be agreed on, it falls to the court to assess the level of damages to be awarded.

This is only the second such case to be decided before a judge, the previous being Cleese v Clark [2004] EMLR 37, also heard by Mr Justice Eady, with the claimant also represented by Mr Nail's law firm, London-based Schillings.

Mr Nail, while accepting the OOA, had declined to accept an offer of 37,500, holding out for considerably more.

But at the hearing, deflating the award that he would otherwise have given by 50%, the judge awarded only 29,000 - although he still considered this sum to be 'substantial' - to reward the defendants for their conciliatory approach in using the procedure.

This was in order to reward the defendants for their conciliatory approach in using the procedure in the first place.

It has left Mr Nail with a potentially large bill of costs to pick up for having failed to beat the offer made.

Mr Justice Eady's judgment is a clear and helpful analysis on how he considers parties should deal with the OOA procedure.

No doubt practitioners will quote from this extensively in due course.

It covers several main areas.

Discounted damages.

If defendants 'are not to be given due credit, in financial terms, for using the system and placing themselves in the hands of the court', then Mr Justice Eady recognised that there was little point in their using the procedure at all.

He recommended that they be rewarded with 'a healthy discount' for making the OOA, given the procedure reduced the damage done to the claimant and accordingly the damages to be paid.

Assessing damages.

Mr Justice Eady set out how he intended to approach the award of damages:

l He would not get too hung up on personal injury awards;

l He would consider what a judge might award in the case in question, where there were no great aggravating or mitigating factors;

l He would assess this starting point against the current conventional overall ceiling for damages of 200,000;

l He would aim to make a significant reduction to take account of any apology and 'the very willingness of the defendant to use the offer of amends route'.

Conciliation.

Acceptance of an OOA means that the claimant has won.

This meant that a conciliatory approach should be adopted, so that the claimant should know that 'there is unlikely to be any attack upon his character' in any subsequent hearing.

Material to 'justify by the back door' the allegations made should not be allowed.

Meaning.

While the allegations on which Mr Nail sued ranged from the laughable to the lewd, there was some debate between the parties as to what they actually meant.

Mr Justice Eady clarified that where an unqualified OOA has been made 'the parties, the advocates and the court generally need to work on the basis that the words complained of [bear] the pleaded meaning', that is, the meaning attributed to the article by the claimants.

It would not be open to the defendant to offer settlement, and then to argue on meaning to reduce the damages.

Fifty percent is a hefty reduction and a large slice to come off any damages award.

Too large, according to Mr Nail's solicitors.

They are appealing and argue that there is no basis for applying a heavy discount to media defendants as a reward for using the procedure.

If the decision stands, it could prove to be a significant incentive for defendants to use the OOA procedure, which in turn could be beneficial for claimants, resulting in more claims being settled at an early stage.

The downside for claimants, of course, is that any damages awarded under this procedure would be discounted.

Mr Nail has vindicated his reputation.

Whether it will prove a costly win in the long term for him in terms of costs, and for claimants in terms of damages, remains to be seen.

By Amber Melville-Brown, David Price Solicitors & Advocates, London