Crime and Courts Act: provisions on exemplary damages relevant in libel and privacy claims in force
On 3 November 2015 sections 34-36 of the Crime and Courts Act 2013 came into force. Their purpose is to restrict the circumstances in which exemplary damages may be awarded against ‘relevant publishers’ in relation to claims for libel, slander, breach of confidence, misuse of private information, malicious falsehood and harassment. Significantly, they do not apply to claims under the Data Protection Act 1998, which are expressly excluded by section 42(5)(a).
A ‘relevant publisher’ is defined in section 41 of the Act as ‘a person who, in the course of a business (whether or not carried on with a view to profit) publishes news-related material (a) which is written by different authors and (b) is subject to editorial control.’ This broadly designates the press; the new provisions will therefore clearly cover the use of exemplary damages against newspapers in defamation and privacy cases. A number of exceptions are carved out in section 41(5) and (6). It is noteworthy that the excluded publishers include broadcasters, who fall outside the scope of section 41 as they are governed by a different regulatory regime.
Conditions and relevant considerations for the award of exemplary damages
By section 34(1) and (2) of the Act, exemplary damages cannot be awarded against a relevant publisher found liable in a relevant claim if it was a member of an approved regulator at the time of the events giving rise to the claim. This exemption is subject to section 34(3), according to which the court may disregard section 34(1) and (2) if it is satisfied that the approved regulator acted unreasonably in imposing, or failing to impose, a penalty in respect of the relevant publisher’s conduct. The court must also be satisfied that but for the exemption contained in section 34(2) it would have made an award of exemplary damages. It is worth noting that this has been a rare occurrence in libel claims against newspapers in the past decades.
If the court decides that the test in section 34(3) is met and that it should disregard the exemption in section 34(2), or that subsection 2 does not apply because the defendant was not, at the material time, a member of an approved regulator, the court may make an award of exemplary damages but only under section 34 rather than under the common law (see section 34(4)). Under the Act, exemplary damages can only be awarded if they are claimed (section 34(5)) and, by subsection 6, the court is satisfied that ‘(a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights, (b) the conduct is such that the court should punish the defendant for it, and (c) other remedies would not be adequate to punish that conduct.’
Section 35 sets out relevant considerations for the court when deciding whether to award exemplary damages. These include the existence of a prior conviction for the relevant conduct, the availability of regulatory membership at the relevant time and the existence of internal compliance procedures.
It remains to be seen what use the courts will make of these provisions. However, they should have a limited influence on the existing law on exemplary damages. Factors likely to be considered echo those already taken into account under the common law, such as the defendant’s state of mind in relation to the statement, his purpose and the extent and type of harm or potential harm to the claimant. The notion of outrage will introduce an element of judicial discretion, but this test originates in the Law Commission’s 1997 Report on Aggravated, Exemplary and Restitutionary Damages in which it was made clear at paragraph 5.44 that it should apply generally and not just to relevant publishers. The principles relating to quantum, outlined in section 36, remain unchanged – the sum should be the minimum necessary to punish the defendant, to show that tort does not pay and to deter others from similar conduct. Presumably, the greatest change introduced by section 34 is that where a defendant is a ‘relevant publisher’ for the purpose of the Act, the award of exemplary damages must be considered under the Act rather than under the common law, regardless of whether or not the relevant publisher was a member of an approved regulator at the material time.
By Mathilde Groppo, Paralegal.