After several years of gradual (and at times controversial) progress through Parliament, the Defamation Act 2013 came into effect at the beginning of this year. Like most statutes, though, it has taken a while for its effects to be felt. Publications made prior to the commencement date of the Act continue to be actionable under the law as it stood prior to the Act's commencement where they are not time-barred. Equally, even for publications caught by the new legislation, it has taken a while for any cases to come to Court.

Thus it was only on 13 August 2014, that the first decision of the High Court on the interpretation of one of the key provisions of the new Act was delivered. The provision under consideration was section 1 of the Act, which imposes a new statutory threshold test before publications can be actionable as defamation, and the case (Cooke and Midland Heart v MGN [2014] EWHC 2831 QB) has confirmed many Claimant practitioners' worst fears about the restrictive nature of that clause.

The case was concerned with an article written and published during the broadcast run of the Benefits Street series of programmes. The article was primarily concerned with identifying certain individuals who were said to be profiting from the misery of the inhabitants of the street which was at the centre of the programmes. In the context of that article, the claimants (a NFP housing association and its chief executive) were identified as also owning and letting properties on the street, and references were made to the chief executive's comparative affluence.

One of the issues with which the High Court was concerned was the meaning of the language used in the article. After some detailed analysis the Court concluded that the effect of identifying the claimants within the article in the way that it was done was to convey the meaning that the association was one of the“well-off landlords … making money from the misery of … residents” and that the chief executive was “personally responsible for this conduct … and has herself profited and become rich from it”.

Such allegations were obviously disparaging and likely to lower the reputation of the organisation and its chief executive in the minds of right thinking people who read the article. Even under the old law, this would have been insufficient to be able to mount a claim for defamation in the absence of a tendency to cause substantial harm to the claimants. It is that latter part of the definition of defamation which has been strengthened under section 1 of the Act, to require “serious harm“ or the likelihood of “serious harm”, which in the case of profit-taking organisations has been further clarified to mean “serious financial harm”.

For those seeking to anticipate how the new threshold test would be applied, in the absence of any further definition of the term “serious” within the Act, there has been very little information from which to form a view, let alone advise a client. Parliament had made it clear that the intent of the change in language was to raise the bar and exclude a proportion of claims which would previously have been able to be pursued. Equally though, there had been statements made during the passage of the Defamation Bill that suggested that the change would be a relatively modest one, in the nature of an incremental adjustment.

The Court, at least for the purposes of this case, was not persuaded that any regard should be paid to those observations. Rather the decision proceeded on the basis of the Judge's own assessment of what amounted to serious harm. Some consideration was given to the fact that a prompt apology was published after the original allegations had appeared, although without the same prominence. Equally, the Court was clearly influenced to a degree by the inability of the claimants to produce actual evidence of injury to their reputations. In the end, the Court felt that the harm was insufficiently serious for the threshold to be passed, and the claim was dismissed.

The focus on a requirement for actual evidence of injury is particularly troubling for claimants. There are several reasons for this. As was the focus of the claimants' submissions in the Cooke case, injuries to reputation are by definition hard to identify and produce evidence for. That is one of the reasons why a separate tort of defamation arose in the first place. Secondly, claimants are likely to want to act quickly to protect their reputation, but the faster they act the less clear will be the evidence of actual, let alone potential, harm. Thirdly, although the second claimant (Midland Heart) was ultimately deemed not to be a profit-taking organisation (such that the “serious harm” did not need to be financial harm) the Court’s decision nevertheless bears all the hallmarks of an analysis based around the actual impact in monetary terms of the publication on the organisation. Producing such evidence (which will necessarily have to be provided at a very early stage in proceedings) is going to be difficult for any business, but for charities and other NFPs it is going to be a particularly onerous burden to discharge.

Which brings us back to the need to act promptly. For the next few months there is a window of opportunity for claimants to pursue claims which arose in the last months of 2013, under the law as it stood before the 2013 Act came into force. This will apply to publications in the print media or online between August and December 2013, and to internet publications pre-dating that period, which may nevertheless have been accessed to a significant extent during those same few months. In all likelihood, though, any claim brought after the end of 2014 (as well as an increasing number of those brought from now on) will be caught by the new statutory regime. The message is simply for those who want to avoid the effects of the new Act. Act now!