Serious Harm: Theedom v CSP Recruitment & Colin Sewell [2015]

In Theedom v CSP Recruitment & Colin Sewell [2015] EWHC 3769 (QB) this matter came before HHJ Maloney QC to decide upon two preliminary issues in a libel action. The defamatory meaning of the words complained of by the Claimant and whether the publication of those words caused or were likely to cause serious harm to the reputation of the Claimant in accordance with s.1 (1) of the Defamation Act 2013.

The Claimant started work as a trainee recruitment consultant for the First Defendant, later developing new business for his employers over the telephone. After two of his colleagues left and joined a rival firm, one of whom became his girlfriend, Judge Maloney observed this had led to the breakdown of his relationship with the management. Following a meeting with them, in which he was accused of leaking information to his girlfriend, Judge Maloney noted that the Claimant’s employment came to an end either by dismissal or resignation.

In accordance with a confidentiality clause in his contract the Claimant, on the 27th June 2014, signed an undertaking which detailed 17 companies he could not deal with for a period of six months. Between 29th to 30th June 2014, the Second Defendant, a management partner of the First Defendant appears to have sent 124 emails to different recipients employed by 102 different companies, who were either clients or potential clients of the First Defendant and some who had dealt with the Claimant when he worked for the First Defendant. The email heading referred to the Claimant by name and

  • Dismissed for gross misconduct,” Judge Maloney noted that the Defendants have not published any retraction or apology. He further observed that the last nine emails left out an important sentence “We are now considering whether to take criminal action against Sam.

The Claimant found alternative employment in the Leicester office of another recruitment firm where he still works. He quite quickly discovered the emails but only found out about how many were sent out during the case.

Judge Maloney observed that both parties acknowledged that the words complained of did refer to the Claimant and were defamatory of him, the meaning of the words being that he had been guilty of gross misconduct. Discussions between them centred on and

  • concerned the detail and gravity of the meaning that would be conveyed to the mind of the hypothetical reasonable reader.

The Claimant argued that the meaning of the words complained of was that he had on a regular basis passed confidential information to a rival firm which was a serious breach of his employment contract therefore he had been dismissed for gross misconduct and further

  • It is also highly likely that he has committed a criminal offence.

The Defendants contended the emails including those which included the words relating to criminal action to bear the meaning that

  • The claimant had improperly disclosed to his employer’s competitors information which was commercially important and/or confidential and/or about the first defendant’s business and he had justifiably been dismissed for gross misconduct.

Judge Maloney considered the answer to be in the Master of the Roll’s sixth point summarised in Jeynes that the the hypothetical reader is taken to be representative of those who would read the publication in question.

Judge Maloney concluded that the Claimant’s arguments carried more weight and the natural and ordinary meaning of the longer versions of the emails:

  • a) While employed by the defendant, CSP, the claimant has regularly supplied commercially important, confidential information about CSP’s business and its customers’ businesses to CSP’s commercial rivals in breach of his contractual obligations to his employer.
    (b) As a result, CSP has rightly dismissed him for gross misconduct.
    (c) His misconduct has been so serious that there are reasonable grounds to suspect that it also amounts to a criminal offence.

With regard to the shorter version he found that it contained words with the meanings in (a) and (b).

He then examined Serious Harm to Reputation and s.1 of the Defamation Act 2013 noting that
(a) The claimant must establish the statement complained of has caused or is likely to cause serious harm to his reputation.
(b) Under s.1(2), a body trading for profit must, in order to establish that serious harm, show actual or likely serious financial loss, which does not apply to the claimant.
(c) Section 1 concerns harm to reputation, injury to feelings alone cannot establish a defamation claim.
(d) Under section 1 the claimant has to prove as a fact, on the balance of probabilities, that the statement has caused or likely to cause serious harm to his reputation.
(e) The claimant may be able to satisfy s.1 without calling any evidence from the inferences of serious harm to reputation from the level of the defamatory meaning of the words and the nature and extent of their publication.
(f) The claimant, to support his case on serious harm, can call evidence and the defendant may call evidence in rebuttal to show that no serious harm has occurred or likely to do so.
(g) To produce effective case management, it may be appropriate in some circumstances for the issue of serious harm to be determined as a preliminary issue, together with the related issue of actual defamatory meaning.

  • (h) It is important to bear in mind that s.1 is essentially a threshold requirement, intended by Parliament to weed out those undeserving libel claims otherwise technically viable, but which do not involve actual serious harm to reputation or likely serious harm to reputation in the future. Once that threshold has been passed, no useful purpose is served at this early stage of the proceedings by going on to consider evidence which is really material only to the quantum of damage if liability is proved.

Judge Maloney noted that under s.1 it was unresolved as to when the likelihood of future serious harm should be assessed from, either the date of the claim being issued or the date of the hearing.

  • In Cooke, Mr. Justice Bean favoured the first approach and in Lachaux, Mr. Justice Warby favoured the second. In this case, I do not consider that that question arises and I do not propose to address it. Proceedings in this case were issued more than six months after the last publication complained of and, if the requirement of existing serious harm to reputation cannot be established, then nothing in the facts of this case suggests that future harm to reputation is likely, (as opposed to the future adverse consequences of present harm to reputation).

Judge Maloney noted that the Claimant had relied upon

  • (a) the inferences of serious harm to his reputation to be drawn from the words complained of and the nature and extent of their publication; and
    (b) evidence of specific instances which he says demonstrate directly that such serious harm has in fact occurred.

On the other hand the Defendants challenged the inferences and the evidence. He observed they had put forward a positive case of the Claimant’s success in his new employment after the emails whereupon the inference was that it was unlikely that he had suffered or was likely to suffer serious harm to his reputation resulting from the emails.

Judge Maloney after examining all the facts and applying the relevant principles gave his conclusions on the issues of serious harm to reputation as follows:

  • (a) When, as here, one has:
    (i) defamatory words of a fairly high degree of gravity;
    (ii) publication to a fairly substantial audience, both in terms of number (over 100) and, more importantly, in terms of proximity and potential importance to the claimant’s career;
    (iii) a vulnerable claimant in the form a young man starting out in a competitive business and trying to make his way; and
    (iv) an influential and prima facie reliable author of the words complained of then those circumstances of themselves raise an inferential case for serious harm to reputation, so strong as to call for rebuttal.

He continued that the rebuttal evidence had established that the Claimant had not suffered financial loss and there had been very little adverse reaction from the email recipients. He continued, under the Act pecuniary loss is not a requirement for a Claimant and any absence of this does not rebut the inferences. Further, just because there has been little hostility from the recipients is not a guide to the Claimant’s standing before those who did not say anything. He noted there have been no apologies, retractions or corrections made.

He concluded, on the balance of probabilities, that the emails had caused the Claimant’s reputation serious harm to pass the threshold in s.1.(1) of the Act.

The judge then went on to consider what he had drawn from the trial.

He considered this trial had led to a further escalation in the conduct of s 1 hearings.

He expressed concern that now in this case both Claimant and the Second Defendant had been cross examined. The time involved in the issue of serious harm had increased over all the previous hearings.The costs budgets of the parties to this point had totalled £170,000 including vat, without success fees and insurance.

  • In the result, the hearing of evidence has added little or nothing to the conclusions that an experienced defamation judge would have drawn simply from reading the email and considering the agreed distribution list.

He considered that Masters should perhaps ask the judge to consider to rule on whether

  • the case is capable of passing the s.1 test, or on the other hand whether the defendant has any real prospect of establishing that it does not. That question could be determined without hearing any evidence, probably alongside the closely-related issue of defamatory meaning.

The issue needs to be considered in every case but, if the libel is a serious one and the publication more than trivial then the answer may be obvious and the trial of a preliminary issue may be unnecessary.

This case follows Lachaux that serious harm can be proved by inference. In that case Warby said the serious harm requirement was capable of being satisfied by an inferential case, based on the gravity of the imputation and the extent and nature of its readership or audience but he thought only in obvious cases, say when a well-known person is accused in the national media of a serious crime.

However this case lowered the requirement even further as the inference was drawn from the defamatory statement being fairly serious and being published to a fairly substantial audience which was only just over 100 people.

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