The world’s rich and famous have been bringing defamation actions in the High Court in London for years, against newspapers, rivals and social media ‘trolls’ alike. This is notwithstanding the fact that the actual damage done to their reputation here in England can often appear to be very limited. This phenomenon, often referred to scathingly as “libel tourism”, has its roots in the claimant-friendly approach that has traditionally dominated the English courts when it comes to defamation claims. However, over the past few years, cases such as Dow Jones & Co Inc v Jameel (“Jameel”) have demonstrated an increasing reticence on the part of the judiciary to continue to allow the rich and famous to use the English court as a battleground on which to thrash out their differences, at least in circumstances where it would be more appropriate for the battle to be fought elsewhere. The 2005 case of Jameel made it clear that a claim would not be allowed to proceed in England unless “the game is worth the candle”. The two recent cases of Karpov v Browder and others (“Karpov”) and Subotic v Knezevic (“Subotic”) would seem to indicate that the “game” - at least for some foreign claimants - just got harder. This article will provide an overview of libel tourism (and the reasons for it), together with an analysis of the recent cases of Karpov and Subotic. It will then look ahead to how the Defamation Act 2013 will affect the game for foreign claimants once it comes into force.
What is libel tourism?
Libel tourism is the phrase used to describe the “forum shopping” that is common in defamation cases. In an increasingly global world, publication of allegedly defamatory statements is rarely confined to one country, and in cases where there has been publication all over the world (facilitated in part by the existence of the internet), claimants often seek to bring a claim in the jurisdiction where they think they are most likely to succeed. More often than not, this has been England. The reasons for this are numerous. One key reason is that, under English law, claimants do not need to prove that they suffered any loss or damage as a result of the publication. Rather, there is a presumption that anyone who has a defamatory statement published about them suffers harm. This presumption therefore removes what could otherwise be a significant hurdle for a claimant. Another reason why there has been a desire to bring defamation claims in the English courts is that the damages awarded to a successful claimant tend to be considerably higher than in other jurisdictions. For some claimants, the fact that a new cause of action can arise every time a defamatory statement is repeated is a particular incentive. This combination of factors can increase the chances of a foreign claimant obtaining a judgement in their favour, which they can then use in an attempt to vindicate their reputation in other jurisdictions that have less claimant-friendly laws.
The seminal example of libel tourism is often regarded as being the case of Berezovsky & Aor v Forbes Inc & Aor (“Berezovsky”). Forbes, the American magazine, published a story alleging that Berezovsky was “the Godfather of the Kremlin”. The relevant issue of the magazine sold 785,710 copies in the US and Canada, but only 1,915 in England and Wales. Berezovsky asserted that he had a reputation in England as a result of his visits to the country to conduct some business negotiations and to see his daughters. Despite the clear connection with other jurisdictions (and the much more extensive publication elsewhere), the House of Lords did not prevent Berezovsky from bringing a claim in England and ultimately, Forbes was required to correct the statement. This helped to vindicate Berezovsky in the US, Canada and Russia, as well as the UK. However, this is by no means the only case in which the wealthy foreign claimant has been indulged by the English court, notwithstanding the fact that they arguably have only a limited connection with the jurisdiction. Another example is that of Bin Mahfouz v Ehrenfeld (“Bin Mahfouz”), in which Saudi businessman Mahfouz and his son were allowed to bring libel claims in England in relation to allegations in a book that Mahfouz was responsible for financing international terrorism. This was despite the fact that only 23 copies of the book were sold to readers in England via internet sites such as Amazon.
The above cases seem to indicate that, in the past, the judges have tended to be relatively receptive to letting foreign defendants with reputations elsewhere, or in circumstances where there is only very limited publication in England, onto the pitch to play the game. However, we are now seeing a series of cases in this country which suggest that the judges are becoming more selective when it comes to deciding who should be allowed to play.
Before we discuss the cases of Karpov and Subotic, it is worth briefly mentioning Jameel. This case is often regarded as having marked a judicial pull-back from the traditional claimant-friendly approach. In this case (which concerned an online article that implied that the claimant had funded Al-Qaeda), the court granted the defendant’s application for strike-out. The court concluded that the question of whether there was a “real and substantial” tort was highly relevant to whether a claim should be permitted to continue. On the facts of this case, given that only five subscribers in England and Wales were known to have reviewed the relevant article, it was held that there had not been a real and substantial tort. Accordingly, the court concluded that the “game will not merely have not been worth the candle, it will not have been worth the wick” and that “it would be an abuse of process to continue to commit the resources of the English court, including substantial judge and possibly jury time, to an action where so little is seen to be at stake”.
Since Jameel, several other cases have added detail to the libel rulebook, including most recently, the cases of Karpov and Subotic. These cases are discussed below.
In Karpov, the claimant, Mr Karpov, alleged that the defendants (the Chief Executive of a hedge fund, the fund itself, an associated company and a US lawyer) had conducted a libellous media campaign against him with the aim of convincing the world that he was involved in a large scale tax fraud and that he had played a part in the murder of an investigator of that fraud, Mr Magnitsky. Mr Karpov was a Russian citizen, the events took place in Russia, and the allegedly defamatory material was published on a Russian website. The defendants applied to have the claim struck out as an abuse of process following Jameel, and/or under the inherent jurisdiction of the court. The grounds for the defendants’ application were that Mr Karpov could not show he had any significant connection with England or reputation to protect here and therefore there could be no “real or substantial tort” in the jurisdiction. The defendants also claimed that Mr Karpov could not achieve any worthwhile vindication in the proceedings given the international comment concerning the officials involved in the death of Magnitsky and that, in any event, any vindication that he might achieve would be disproportionate to the costs involved (i.e. “not worth the candle”).
The court decided that the fact that Mr Karpov had travelled to England on five or so occasions and had some friends who lived here (including former classmates and a former girlfriend from school with whom he was still in contact) was not enough to establish that there had been a real and substantial tort. Interestingly, Mr Karpov’s argument that his reputation in England was both created and destroyed by the defendants’ statements about him was not rejected outright, but the judge noted that in order for such a claim to be made, there would have to be some kind of “imminent connection” with the jurisdiction before the publication (for example, a foreign national being libelled in an English town’s local newspaper just before his arrival there). On the facts of this case, there was no such connection. In delivering its decision, the court also noted that Mr Karpov would not achieve any meaningful vindication in the UK if he was successful in his claim, as his real goal was to be removed from the US “Magnitsky list” of people implicated in the death of the investigator. In the words of Simon J:
“the Claimant cannot establish a reputation within this jurisdiction sufficient to establish a real and substantial tort. His connection with this country is exiguous and, although he can point to the continuing publication in this country, there is ‘a degree of artificiality’ about his seeking to protect his reputation in this country.”
This case is significant as it demonstrates that the court will scrutinise, very closely, the extent to which a foreign claimant really has a reputation in this country when applying the “real and substantial tort” test to the question of whether a claim should be struck out for an abuse of process and/or under the inherent jurisdiction of the court. The emphasis in the judgement is very much on the artificiality of the approach taken by the foreign claimant in bringing the claim in England. Accordingly, foreign claimants who do not have significant reputations in this country, may find that they have more time to shop - and less time to litigate or “play the game” - in London, as the judges are becoming more choosey about which foreign players they allow onto the pitch.
In Subotic, the claimant, Mr Subotic, was a Serbian national living in Switzerland, and the defendant, Mr Knezevic, was a Montenegrin national living in Croatia. In this case, the claimant alleged that the defendant had helped to organise an international media campaign against him, in which it was suggested that the claimant was involved in murder, drug smuggling, witness intimidation, fraud and organised crime, and that he had concealed his identity by plastic surgery.
The defendant applied to have the case struck out as an abuse of process. Before coming to his conclusion, Mr Justice Dingemans noted that “it is essential that the court is able to control its process to ensure that actions which do not serve any legitimate purpose are not pursued.” On the facts of the case, given that there had been minimal internet publication in England and Wales of the material complained of (the internet hits in England and Wales were less than one per cent of online traffic), and limited hard copy publication to a small group of academics, it was impossible to say that the “extent of the publication, and the loss and effect on his reputation in England and Wales, was worth the candle of pursuing this litigation in England and Wales.” Lord Dingemans also noted that “this action has nothing to do with Mr Subotic’s reputation in England and Wales and everything to do with his reputation in the Balkans.”
Although Lord Dingemans did not expressly refer to the artificiality of the claimant seeking to bring the claim in England, the tenor of the judgment (and the reference to the action having everything to do with the claimant’s reputation in the Balkans) indicates that this was the main driver in the decision to grant the application for strike-out.
These cases seem to indicate a commitment, on the part of the English judiciary, to avoid letting foreign players onto the pitch who should not be there. Whereas once, claimants such as Berezovsky and Bin Mahfouz may have succeeded in bringing defamation claims in England despite having only a tenuous connection to the jurisdiction, claimants like Karpov and Subotic are failing and their games may have to be played out elsewhere.
This trend seems set to continue, with the coming into force of the new Defamation Act 2013 (the “Act”), discussed below.
Defamation Act 2013
The Act received Royal Assent on 25 April 2013, and will come into force on 1 January 2014. It makes wide-ranging changes to the law of defamation, including creating a new requirement for claimants to show they have suffered serious harm, creating protection from defamation claims in certain circumstances for websites that allow user-generated content, and putting various defences to defamation claims on a statutory footing.
One of the most notable sections of the Act is section 9, which provides that an English court will not have jurisdiction to hear and determine a defamation action unless the court is satisfied that “England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement”. The purpose of section 9, as expressed in the explanatory notes, is to “address the issue of libel tourism”. Section 9 applies to defamation claims brought against people not domiciled in the UK, the EU or a Lugano Convention state and will mean that, in cases where a statement has been published in England and also abroad, the court will be required to consider the overall global picture to determine where the most appropriate place for the claim to be heard would be. According to the explanatory notes to the Act, “this would mean that, for example, if a statement was published 100,000 times in Australia and only 5,000 times in England that would be a good basis on which to conclude that the most appropriate jurisdiction in which to bring an action in respect of the statement was Australia rather than England”. Under the Act, the courts will therefore be required to look beyond the claim as pleaded by the claimant, and decide whether another forum is more appropriate on the basis of the global picture. It is intended that this will overcome the problem of English courts accepting jurisdiction to hear the claim simply because a claimant frames their claim so as to focus on damage that occurs in England only.
This will involve a balancing act between the competing interests of claimants, who are likely to claim that they have a substantial reputation in England, and defendants, who no doubt would argue that the claim should be heard in another (less claimant-friendly) jurisdiction. It seems likely that when applying section 9 of the Act, the judges will take into account cases such as Karpov and Subotic and that this will inform the application of section 9. Although only time will tell, section 9 of the Defamation Act may well mean “game over” for libel tourism.
Recent case law indicates that London’s popularity as a libel tourist destination is waning and that trend looks set to continue with the coming into force of section 9. The message from the English courts to would-be libel tourists is clear - if you think you can play your game out in the English courts, think again. Unless you can satisfy an increasingly sceptical court that you have a reputation that is genuinely worth protecting in England, and point to sufficient publication in this country, you may well find yourselves relegated to playing on home turf or elsewhere.