ATE for Defendants in Defamation Cases

By Matthew Pascall, Senior Underwriting Manager

(Estimated reading time: 7 minutes 13 seconds)

Banks v Cadwalladr [2022] EWHC 1417

Often defendants do not consider the need for after-the-event insurance as those defending defamation claims are often well-funded and resourced publishers who chose to take the risk of paying the claimant’s costs “on the chin.” Some defendants are not in such a comfortable position.

In June of this year Steyn J dismissed Arron Banks’ defamation claim against Carole Cadwalladr. Ms Cadwalladr was a freelance journalist without the support of a publisher behind her. Temple insured her case, ensuring that she was able to defend Banks’ claim free of the risk that, had his claim succeeded, she would have had to pay his costs.

By the time the case reached trial, the central issue was whether or not Ms Cadwalladr’s defence of public interest under section 4 of the Defamation Act 2013 would succeed. She also questioned the Claimant’s assertion that he had suffered serious harm.

Meaning and Serious Harm

The case was concerned, firstly, with words said by the Defendant in a TED Talk. The specific words complained of were: “And I am not even going to go into the lies that Arron Banks has told about his covert relationship with the Russian Government.”

At a preliminary hearing to decide the meaning of these words, [2019] EWHC 3451, Saini J decided that “the meaning of the material part of the Ted Talk is as follows: that on more than one occasion Mr. Banks told untruths about a secret relationship he had with the Russian Government in relation to acceptance of foreign funding of electoral campaigns in breach of the law on such funding.” In case anyone might have forgotten, the “… electoral campaigns…” was, essentially, the “leave” referendum campaign.

Secondly, the Claimant complained about words said by the Defendant at a convention in June 2019. The meaning of the words complained of was held to be: “Mr. Banks has been offered money by the Russians and (by way of inference) that there are substantial grounds to investigate whether he would be willing to accept such funds in violation of prohibitions on foreign electoral funding.”

Thirdly the court had to consider a Tweet – no modern defamation case is complete without at least one Tweet. The Tweet was: “Oh Arron. This is too tragic. Nigel Farage’s secret funder Arron Banks has sent me a pre-action letter this morning; he’s suing me over this TED talk. If you haven’t watched it please do. I say he lied about his contact with Russian govt. Because he did.” It was held that the Tweet had the same meaning as the words complained of spoken in the TED talk.

In the course of the judgment there is reference to a second Tweet. The second Tweet was a reference to an Italian investigation into alleged links between The Lega political party (and its leader Salvini) and Russia: “Congrats, Alberto. And well done, Italy. This is how a relatively well functioning country should respond. Case is mirror image of Arron Banks + Russians. The total apathy/official indifference to that here continues to shock and disturb”

The Court concluded that: “… the factual meaning to be drawn from the Second Tweet, is that there is a proper basis to investigate whether Mr. Bank’s contact with Russia involved any criminal conduct, just as the Italian government is investigating Lega’s contact with the Russians.” In practical terms the second Tweet added little to the claim and the judgment was, in the end, concerned with the original Tweet and the words spoken by Ms Cadwalladr at the TED talk and convention.

Ms Cadwalladr originally ran a defence of truth but later abandoned this.

As regards the issue of serious harm, Steyn J concluded at the trial that the TED talk did cause serious harm up to the 29^th April 2020 but that thereafter it did not and that the Tweet did not cause harm from that date.

Public Interest

Section 4 (1) of the Defamation Act 2013 provides that:

(1) It is a defence to an action for defamation for the defendant to show that—

(a) the statement complained of was, or formed part of, a statement on a matter of public interest;

and

(b) the defendant reasonably believed that publishing the statement complained of was in the public interest.

Subsections (4) and (5) further provide:

(4) In determining whether it was reasonable for the defendant to believe that publishing the statement complained of was in the public interest, the court must make such allowance for editorial judgement as it considers appropriate.

(5) For the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion.

Much of the judgment is taken up with a detailed consideration of the question whether or not Ms Cadwalladr “… reasonably believed that publishing the statement complained of was in the public interest” – (see section 4 (1) (b) above). As the judge put it, in substance the question was: “… whether Ms Cadwalladr has demonstrated that her (subjective) belief that publishing the statement complained of was (objectively) reasonable in all the circumstances.”

The judge reviewed the evidence to identify any objectively reasonable basis for Ms Cadwalladr’s belief that saying what she had said in the TED talk and the Tweet was in the public interest. That involved looking at all the available evidence and at both at what Banks had said publicly and not said about his relationship with Russian officials (in particular at the Russian Embassy in London) in order to see if that material provided the required reasonable basis. The Judge concluded that it did. Although long, the judgment contains a fascinating account of aspects of the leave campaign and Arron Banks’ role in it as, to use his own phrase one of the “Bad Boys of Brexit.”

The Defendant argued that if a reasonable basis had existed at the time of the TED talk and Tweet, there came a point in time thereafter when that reasonable basis fell away and the public interest defence would no longer be available.

The Defendant pointed to a statement by the National Crime Agency (NCA) issued in September 2019 that it had found no evidence of criminal behavior on the part of the Defendant and that, in particular the NCA had not “… received any evidence to suggest that Mr Banks and his companies received funding from any third party to fund the loans, or that he acted as an agent on behalf of a third party.” (The loans were loans from companies controlled by Banks and the borrowed funds that were then donated to a number of leave campaign groups).

On the 29^th April 2020 the Electoral Commission and Banks then issued a joint statement confirming what the NCA had said the previous September. The judge agreed with the Defendant and held that the public interest defence fell away after the 29^th April 2020.

However, this was a pyrrhic victory for the Claimant because the judge had found that after the 29^th April he had suffered no serious harm so was not entitled to damages caused by anything said or published by Ms Cadwalladr after that date. As a consequence Mr Banks’ claim was dismissed.

It is right to point out that this decision is now subject to appeal and we await the Court of Appeal’s analysis of Steyn J’s judgment in due course.

The Temple Perspective

Defamation claims often involve a “David and Goliath” struggle and it is all too easy to assume that the Defendant publisher will always be David. In this case the roles were reversed. Ms Cadwalladr was a freelance journalist and the words complained of were not originally published in a newspaper. She was very much on her own. But for the protection afforded to her by our insurance, she would have faced the risk of paying significant costs if her defence had failed.

Her case raised important issues around the defence of public interest in defamation and the factual background to the case itself involved hugely important issues about the leave campaign. It was important to both litigants that they could present their respective cases in open court in order to obtain the vindication each sought.

In a sense the reputation of both litigants was at the heart of the proceedings. I am always wary of using the phrase “access to justice” but this is a case where ATE insurance played an important part in providing Ms Cadwalladr with that access.

If you’d like to discuss a case or more information on our ATE insurance and disbursement funding products for media and communications litigation, please email matthew.pascall@temple-legal.co.uk or call him on 01483 514428.

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Defending the Public Interest – ATE for Defendants in Defamation Cases

Meaning and Serious Harm

Public Interest

The Temple Perspective

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