HOUSE OF LORDS OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Jameel and others (Respondents) v. Wall Street Journal Europe Sprl (Appellant

large circulation in the United States.
3. The respondents, claimants in the proceedings, are Saudi Arabian. The first respondent is a prominent businessman and president of the Abdul Latif Jameel Group, an international trading conglomerate based in the Kingdom of Saudi Arabia comprising numerous companies and with interests in cars, shipping, property and distribution of electronic goods. The second respondent is a company incorporated in Saudi Arabia and is part of the Group. The first respondent is the general manager and president of the company, which does not itself own property or conduct any trade or business here, but which has a commercial reputation in England and Wales.
4. On 6 February 2002 the newspaper published the article which gave rise to these proceedings. It was headed "Saudi Officials Monitor Certain Bank Accounts" with a smaller sub-heading "Focus Is on Those With Potential Terrorist Ties". It bore the by-line of James M Dorsey, an Arabic-speaking reporter with specialist knowledge of Saudi Arabia, and acknowledged the contribution of Glenn Simpson, a staff writer in Washington. The gist of the article, succinctly stated in the first paragraph, was that the Saudi Arabian Monetary Authority, the Kingdom's central bank, was, at the request of US law enforcement agencies, monitoring bank accounts associated with some of the country's most prominent businessmen in a bid to prevent them from being used, wittingly or unwittingly, for the funnelling of funds to terrorist organisations. This information was attributed to "U.S. officials and Saudis familiar with the issue". In the second paragraph a number of companies and individuals were
named, among them "the Abdullatif Jamil Group of companies" who, it was stated later in the article, "couldn't be reached for comment".
5. The jury in due course found that the article referred to was defamatory of both respondents. They may have understood the article to mean that there were reasonable grounds to suspect the involvement of the respondents, or alternatively that there were reasonable grounds to investigate the involvement of the respondents, in the witting or unwitting funnelling of funds to terrorist organisations. For present purposes it is immaterial which defamatory meaning the jury gave the passage complained of, neither of which the newspaper sought to justify.
6. The article was published some five months after the catastrophic events which took place in New York and Washington on 11 September 2001. During the intervening months the US authorities had taken determined steps, with strong international support, to cut off the flow of funds to terrorist organisations, including Al-Qaida. These steps were of particular importance in relation to Saudi Arabia, since a large majority of the suspected hijackers were of Saudi origin, and it was believed that much of their financial support came from Saudi sources. Yet the position of the Saudi authorities was one of some sensitivity. The Kingdom was an ally of the United States and condemned terrorism. But among its devoutly Muslim population there were those who resented the Kingdom's association with the United States and espoused the cause of Islamic jihad. Thus there were questions about whether, and to what extent, the Kingdom was co-operating with the US authorities in cutting off funds to terrorist organisations. This was, without doubt, a matter of high international importance, a very appropriate matter for report by a serious newspaper. But it was a difficult matter to investigate and report since information was not freely available in the Kingdom and the Saudi authorities, even if co-operating closely with those of the United States, might be embarrassed if that fact were to become generally known.
7. The trial of the action before Eady J and a jury lasted some three working weeks and culminated in verdicts for the respondents and awards of £30,000 and £10,000 respectively. Much evidence was called on both sides, of which the House has been referred to short excerpts only. The judge rejected the newspaper's argument on the damage issue ([2003] EWHC 2945 (QB), [2004] 2 All ER 92) and the Court of Appeal agreed with him ([2005] EWCA Civ 74, [2005] QB 904). The judge also rejected the newspaper's claim to Reynolds privilege ([2004] EWHC 37 (QB)). On this question also the Court of Appeal upheld his decision, but on a more limited ground. This calls for more detailed consideration.
8. The judge put a series of questions to the jury which, so far as relevant to Reynolds privilege, were directed to two matters: the sources on which Mr Dorsey, as reporter, relied; and his attempt to obtain the respondents' response to his inclusion of their names in his proposed article. Mr Dorsey testified that he had relied on information given by a prominent Saudi businessman (source A), confirmed by a banker (source B), a US diplomat (source C), a US embassy official (source D) and a senior Saudi official (source E). In answer to the judge's questions the jury found that the newspaper had proved that Mr Dorsey had received the information he claimed to have received from source A, but had not proved that Mr Dorsey had received the confirmation he claimed from sources B-E inclusive. The judge attached significance to these negative findings, since Mr Dorsey said in evidence that he would not have
written the article in reliance on source A alone. In the Court of Appeal, the judge's reliance on these negative findings was criticised by the newspaper. At the outset of his direction to the jury the judge had pointed out that there was no plea of justification and that therefore, if the jury found the article defamatory of the respondents, they should assume it to be untrue. This direction, it was said, may well have infected the jury's approach to the questions concerning sources B-E. The Court of Appeal refused the newspaper leave to raise a new ground of misdirection, and thought (para 66) that the jury had "almost certainly" based their answers on the impression made by witnesses in court. But the Court of Appeal preferred to base its decision on the other ground relied on by the judge to deny privilege.
9. Mr Dorsey described attempts to obtain a response from the Group about his proposed article. He said he had telephoned the Group office at about 9.0 a.m. and left a recorded message. The jury found that the newspaper had not proved on the balance of probabilities that that was so. There was, it was agreed, a telephone conversation between Mr Dorsey and Mr Munajjed, an employee of the Group, on the evening of 5 February, the day before publication. During that conversation, according to Mr Munajjed, he had asked Mr Dorsey to wait until the following day for a comment by the Group. He had, he said, no authority to make a statement and the first respondent was in Japan, where the time was 3.0 a.m. Mr Dorsey denied that Mr Munajjed had asked him to wait. But the jury found that Mr Munajjed had made that request. It was on this ground, as I understand, that the Court of Appeal upheld the judge's denial of Reynolds privilege:
"82. We turn to the judge's observation that the Jameels were not given sufficient time to comment on the proposed publication. It was to this matter that the jury's questions 6 and 7 were addressed. Mr Dorsey had given evidence that he had telephoned the Jameels' offices on the morning before the publication and left a recorded message. The jury found that this did not take place. What the jury did find had taken place was that Mr Dorsey had spoken to the Jameels' representative, Mr Munajjed, on the evening before publication, that the latter had asked for the publication to be postponed so that he could contact Mr Jameel, who was in Japan on business, and that Mr Dorsey had declined this request. The judge found that there was no compelling reason why Mr Jameel could not have been afforded 24 hours to comment on the article. We can see no basis for challenging this conclusion, nor did Mr Robertson suggest that there was one."
10. I turn to the two issues raised in the appeal.
I DAMAGE
11. The issue under this head is whether a trading company which itself conducts no business but which has a trading reputation within England and Wales should be entitled to recover general damages for libel without pleading and proving that the publication complained of has caused it special damage. To resolve this question it is helpful to distinguish three sub-issues:
(1) whether such an entitlement exists under the current law of England and Wales;
(2) whether, if so, article 10 of the European Convention on Human Rights requires revision of the current domestic law; and
(3) whether, if not, the current domestic law should in any event be revised.
(1) The current domestic law
12. The tort of libel has long been recognised as actionable per se. Thus where a personal plaintiff proves publication of a false statement damaging to his reputation without lawful justification, he need not plead or prove special damage in order to succeed. Proof of injury to his reputation is enough.
13. It was argued in South Hetton Coal Company Limited v North-Eastern News Association Limited [1894] 1 QB 133 that this rule did not apply to trading companies. The newspaper in that case had published an article strongly critical of the way in which the plaintiff, a colliery owner, housed its workers, and the company had not pleaded or proved any actual damage. It was argued for the publisher that a corporation could have no personal character, and that the article had not related to the business of the company (pp 134, 137). The Court of Appeal unanimously rejected this argument. Lord Esher MR held the law of libel to be one and the same for all plaintiffs (p 138). While he referred to obvious differences between individuals and companies (pp 138-139), his conclusion (p 139) was clear:
"Then, if the case be one of libel - whether on a person, a firm, or a company - the law is that damages are at large. It is not necessary to prove any particular damage; the jury may give such damages as they think fit, having regard to the conduct of the parties respectively, and all the circumstances of the case."
There need be no evidence of particular damage (p 140). Lopes LJ agreed (p 141): a company may maintain an action for a libel reflecting on the management of its business without alleging or proving special damage. Kay LJ also agreed (p 148): a trading corporation may sue for a libel calculated to injure them in respect of their business, and may do so without any proof of damage general or special, although, where there is no such evidence, the damages given will probably be small.
14. In Lewis v Daily Telegraph Ltd [1964] AC 234, 262, Lord Reid pointed out that a company cannot be injured in its feelings but only in its pocket. There was, however, no challenge in that case to the principle laid down in South Hetton, which was not cited in either party's printed case, or in argument, or in any judgment.
15. Mr Robertson QC, for the newspaper, pointed out, quite correctly, that the Faulks Committee on Defamation, in its Report (Cmnd 5909, March 1975), para 336, recommended amendment of the South Hetton rule. The amendment recommended was, however, only to limit libel actions by trading corporations to cases where the trading corporation could establish either that it had suffered special damage or that the defamation was likely to cause it financial damage. This recommendation was made after considering trenchant criticisms of the existing rule made by Mr J A Weir ("Local Authority v Critical Ratepayer - a Suit in Defamation" (1972A) CLJ 238). It is not a recommendation to which Parliament has chosen to give effect.
16. In Derbyshire County Council v Times Newspapers Ltd the issue concerned the entitlement of a local authority, not a trading corporation, to sue in libel. But at first instance South Hetton was cited, and contributed to Morland J's conclusion that a local authority could sue: [1992] QB 770, 781, 783-788. On appeal, counsel for the newspaper distinguished South Hetton on the ground of the colliery company's trading character and counsel for the local authority relied on it: ibid, pp 792, 797. No member of the Court of Appeal questioned the decision. Balcombe LJ accepted South Hetton as binding for what it decided, but also (despite Mr Weir's criticism) expressed his agreement with it: p 809. In the House, counsel for the local authority cited the decision ([1993] AC 534, 536-537). Counsel for the newspaper did not criticise it, but distinguished it as applicable to a company with a business reputation which a local authority did not have (p 538). In his leading opinion, with which the other members of the House agreed, Lord Keith of Kinkel (who had been a member of the Faulks committee) cited South Hetton at some length, and also National Union of General and Municipal Workers v Gillian [1946] KB 81, in which a non-trading corporation (a trade union) had been assimilated to a trading corporation. He then continued (p 547):
"The authorities cited above clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. Examples are those that go to credit such as might deter banks from lending to it, or to the conditions experienced by its employees, which might impede the recruitment of the best qualified workers, or make people reluctant to deal with it. The South Hetton Coal Co case [1894] 1 QB 133 would appear to be an instance of the latter kind, and not, as suggested by Browne J, an authority for the view that a trading corporation can sue for something that does not affect it adversely in the way of its business. The trade union cases are understandable upon the view that defamatory matter may adversely affect the union's ability to keep its members or attract new ones or to maintain a convincing attitude towards employers. Likewise in the case of a charitable organisation the effect may be to discourage subscribers or otherwise impair its ability to carry on its charitable objects. Similar considerations can no doubt be advanced in connection with the position of a local authority. Defamatory statements might make it more difficult to borrow or to attract suitable staff and thus affect adversely the efficient carrying out of its functions."
Lord Keith then went on to give his reasons for concluding that a local authority was to be distinguished from other types of corporation, whether trading or non-trading.
17. In Derbyshire the correctness of South Hetton was not challenged, but acceptance of its correctness was an important step in Lord Keith's reasoning and I find no ambiguity in the proposition he propounded: the authorities clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. In Shevill v Presse Alliance SA [1996] AC 959, decided some three years later by a differently constituted committee of the House, one of the plaintiffs was a trading corporation and the presumption of damage in libel cases was treated as part of our national substantive law. I conclude that under the current law of England and Wales a trading company with a trading reputation in this country may recover general damages
without pleading or proving special damage if the publication complained of has a tendency to damage it in the way of its business.
(2) Article 10
18. Article 10 of the European Convention provides:
"1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.
2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary."
The central importance of this article in the Convention regime is clear beyond question, and is reflected in section 12 of the Human Rights Act 1998. Freedom to publish free of unjustifiable restraint must indeed be recognised as a distinguishing feature of the sort of society which the Convention seeks to promote. The newspaper in this case relies on article 10 to contend that a domestic rule entitling a trading corporation to sue in libel when it can prove no financial loss is an unreasonable restraint on the right to publish protected by article 10.
19. This is not an unattractive argument, and it would be persuasive if, in such a case, excessive, punitive or exemplary damages were awarded. But the damages awarded to the second claimant in this case were not excessive, and the argument encounters three problems of principle. First, as the text of article 10 itself makes plain, the right guaranteed by the article is not unqualified. The right may be circumscribed by restrictions prescribed by law and necessary and proportionate if directed to certain ends, one of which is the protection of the reputation or rights of others. Thus a national libel law may, consistently with article 10, restrain the publication of defamatory material.
20. Secondly, the national rule here in question, pertaining to the recovery of damages by a trading corporation which proves no financial loss, has been the subject of challenge before the European Commission and Court in the context of libel proceedings brought by two corporate plaintiffs against two individual defendants. In S and M v United Kingdom (1993) 18 EHRR CD 172, 173, the challenge to the rule was somewhat oblique and the Commission made the points summarised in para 19 above. In Steel and Morris v United Kingdom (2005) 41 EHRR 403 the challenge was direct: see para 31 (a) and (b), p 419. The Court accepted that the domestic rule was as stated in Derbyshire (para 40) but held (para 94) that
"The state therefore enjoys a margin of appreciation as to the means it provides under domestic law to enable a company to challenge the truth, and limit the damage, of allegations which risk harming its reputation."
The Court cited and echoed observations in an earlier decision, Märkt Intern and Beerman v Germany (1989) 12 EHRR 161, paras 33-38. Thus the Court did not hold the current rule to be necessarily inconsistent with article 10: it was a matter for the judgment of the national authorities.
21. Thirdly, the weight placed by the newspaper on the chilling effect of the existing rule is in my opinion exaggerated. Among the arguments it advances is that the rule is unnecessary since, it is said, defamation of a company involves defamation of directors and individuals who are free to sue as personal plaintiffs. I very much doubt if this is always so, although in some cases it will be. But, to the extent that it is so, I question whether the possibility of a claim by the company will add significantly to the chilling effect of a claim by the individuals.
22. I would accordingly answer this question in the negative.
(3) Revision of the current law
23. Since the European Court accords a generous margin of appreciation to the judgment of national authorities, and these include courts, it is appropriate for the House to review the merits of the South Hetton rule as re-stated in Derbyshire. The newspaper argues that, in accordance with the trend towards enhanced recognition of freedom of expression, the rule should be abrogated. Parliament could of course have legislated to abrogate or modify the rule, but it has not done so. It is accordingly necessary to revert to basic principles.
24. The tort of defamation exists to afford redress for unjustified injury to reputation. By a successful action the injured reputation is vindicated. The ordinary means of vindication is by the verdict of a judge or jury and an award of damages. Most plaintiffs are individuals, who are not required to prove that they have suffered financial loss or even that any particular person has thought the worse of them as a result of the publication complained of. I do not understand this rule to be criticised. Thus the question arises whether a corporation with a commercial reputation within the jurisdiction should be subject to a different rule.
25. There are of course many defamatory things which can be said about individuals (for example, about their sexual proclivities) which could not be said about corporations. But it is not at all hard to think of statements seriously injurious to the general commercial reputation of trading and charitable corporations: that an arms company has routinely bribed officials of foreign governments to secure contracts; that an oil company has wilfully and unnecessarily damaged the environment; that an international humanitarian agency has wrongfully succumbed to government pressure; that a retailer has knowingly exploited child labour; and so on. The leading figures in such corporations may be understood to be personally implicated, but not, in my opinion, necessarily so. Should the corporation be entitled to sue in its own right only if it can prove financial loss? I do not think so, for two main reasons.
26. First, the good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even its own staff, make people less ready to deal with it, less willing or less proud to work for it. If this were not so, corporations would not go to the lengths they do to protect and burnish their corporate images. I find nothing repugnant in the notion that this is a value which the law should protect. Nor do I think it an adequate answer that the corporation can itself seek to answer the defamatory statement by press release or public statement, since protestations of innocence by the impugned party necessarily carry less weight with the public than the prompt issue of proceedings which culminate in a favourable verdict by judge or jury. Secondly, I do not accept that a publication, if truly damaging to a corporation's commercial reputation, will result in provable financial loss, since the more prompt and public a company's issue of proceedings, and the more diligent its pursuit of a claim, the less the chance that financial loss will actually accrue.
27. I do not on balance consider that the existing rule should be changed, provided always that where a trading corporation has suffered no actual financial loss any damages awarded should be kept strictly within modest bounds.
II REYNOLDS PRIVILEGE
28. The decision of the House in Reynolds v Times Newspapers Ltd [2001] 2 AC 127 built on the traditional foundations of qualified privilege but carried the law forward in a way which gave much greater weight than the earlier law had done to the value of informed public debate of significant public issues. Both these aspects are, I think, important in understanding the decision.
29. Underlying the development of qualified privilege was the requirement of a reciprocal duty and interest between the publisher and the recipient of the statement in question: see, for example, Harrison v Bush (1855) 5 E & B 344, 348; Pullman v Hill & Co Ltd [1891] 1 QB 524, 528; Adam v Ward [1917] AC 309, 334; Watt v Longsdon [1930] 1 KB 130, 147, all cases cited in Duncan & Neill on Defamation, 2nd ed (1983), pp 93-94, paras 14.04-14.05. Some of these cases concerned very limited publication, but Adam v Ward did not, and nor did Cox v Feeny (1863) 4 F & F 13; Allbutt v General Council of Medical Education and Registration (1889) 23 QBD 400; Perera v Peiris [1949] AC 1 and Webb v Times Publishing Co Ltd [1960] 2 QB 535. Thus where a publication related to a matter of public interest, it was accepted that the reciprocal duty and interest could be found even where publication was by a newspaper to a section of the public or the public at large. In Reynolds the Court of Appeal restated these tests ([2001] 2 AC 127, 167, 177), although it suggested a third supplemental test which the House held to be mistaken.
30. I do not understand the House to have rejected the duty/interest approach: see Lord Nicholls of Birkenhead, pp 194-195, 197, 204; Lord Steyn, p 213; Lord Cooke of Thorndon, pp 217, 224, 227; Lord Hope of Craighead, pp 229, 235; Lord Hobhouse of Woodborough, pp 237, 239. But Lord Nicholls (p 197) considered that matters relating to the nature and source of the information were matters to be taken into account in determining whether the duty-interest test was satisfied or, as he preferred to say "in a simpler and more direct way, whether the public was entitled to know the particular information."
31. The necessary pre-condition of reliance on qualified privilege in this context is that the matter published should be one of public interest. In the present case the subject matter of the article complained of was of undoubted public interest. But that is not always, perhaps not usually, so. It has been repeatedly and rightly said that what engages the interest of the public may not be material which engages the public interest.
32. Qualified privilege as a live issue only arises where a statement is defamatory and untrue. It was in this context, and assuming the matter to be one of public interest, that Lord Nicholls proposed (at p 202) a test of responsible journalism, a test repeated in Bonnick v Morris [2003] 1 AC 300, 309. The rationale of this test is, as I understand, that there is no duty to publish and the public have no interest to read material which the publisher has not taken reasonable steps to verify. As Lord Hobhouse observed with characteristic pungency (p 238), "No public interest is served by publishing or communicating misinformation". But the publisher is protected if he has taken such steps as a responsible journalist would take to try and ensure that what is published is accurate and fit for publication.
33. Lord Nicholls (at p 205) listed certain matters which might be taken into account in deciding whether the test of responsible journalism was satisfied. He intended these as pointers which might be more or less indicative, depending on the circumstances of a particular case, and not, I feel sure, as a series of hurdles to be negotiated by a publisher before he could successfully rely on qualified privilege. Lord Nicholls recognised (at pp 202-203), inevitably as I think, that it had to be a body other than the publisher, namely the court, which decided whether a publication was protected by qualified privilege. But this does not mean that the editorial decisions and judgments made at the time, without the knowledge of falsity which is a benefit of hindsight, are irrelevant. Weight should ordinarily be given to the professional judgment of an editor or journalist in the absence of some indication that it was made in a casual, cavalier, slipshod or careless manner.
34. Some misunderstanding may perhaps have been engendered by Lord Nicholls' references (at pp 195, 197) to "the particular information". It is of course true that the defence of qualified privilege must be considered with reference to the particular publication complained of as defamatory, and where a whole article or story is complained of no difficulty arises. But difficulty can arise where the complaint relates to one particular ingredient of a composite story, since it is then open to a plaintiff to contend, as in the present case, that the article could have been published without inclusion of the particular ingredient complained of. This may, in some instances, be a valid point. But consideration should be given to the thrust of the article which the publisher has published. If the thrust of the article is true, and the public interest condition is satisfied, the inclusion of an inaccurate fact may not have the same appearance of irresponsibility as it might if the whole thrust of the article is untrue.
35. These principles must be applied to the present case. As recorded in para 8 above, the Court of Appeal upheld the judge's denial of Reynolds privilege on a single ground, discounting the jury's negative findings concerning Mr Dorsey's sources: that the newspaper had failed to delay publication of the respondents' names without waiting long enough for the respondents to comment. This seems to me, with respect, to be a very narrow ground on which to deny the privilege, and the ruling subverts the
liberalising intention of the Reynolds decision. The subject matter was of great public interest, in the strictest sense. The article was written by an experienced specialist reporter and approved by senior staff on the newspaper and The Wall Street Journal who themselves sought to verify its contents. The article was unsensational in tone and (apparently) factual in content. The respondents' response was sought, although at a late stage, and the newspaper's inability to obtain a comment recorded. It is very unlikely that a comment, if obtained, would have been revealing, since even if the respondents' accounts were being monitored it was unlikely that they would know. It might be thought that this was the sort of neutral, investigative journalism which Reynolds privilege exists to protect. I would accordingly allow the appeal and set aside the Court of Appeal judgment.
36. I am in much more doubt than my noble and learned friends what the consequence of that decision should be. The House has not, like the judge and the jury, heard the witnesses and seen the case develop day after day. It has read no more than a small sample of the evidence. It seems to me a large step for the House, thus disadvantaged, to hold that the publication was privileged, and I am not sure that counsel for the newspaper sought such a ruling. But I find myself in a minority, and it serves no useful purpose to do more than express my doubt.