Speedread: The principles outlined by the Court of Appeal last week for assessing damages in defamation cases suggest that the recovery of 'windfall' awards may be a thing of the past.
On 28 February 2019, the Court of Appeal gave judgment in Kinsella v Kenmare Resources plc and Carvill, setting aside what had been the largest ever defamation award in the State.
In the High Court, the plaintiff had been awarded compensatory damages of €9m and a further €1m in aggravated damages.
The plaintiff had successfully claimed that a press release issued by the defendant company had suggested that he had been guilty of inappropriate sexual behaviour towards a colleague, which was untrue.
The defendants advanced a number of grounds of appeal, including that the jury's award of damages to the plaintiff was so disproportionate as to be incapable of being upheld.
The Court of Appeal (Ms Justice Irvine) engaged in a comprehensive review of the authorities and made the following observations:
- The factors to be taken into account in determining the damages are the gravity of the libel, the effect on the plaintiff, the extent of publication and the conduct of the defendant.
- The amount of compensation must be sufficiently large so that it would, if disclosed to a bystander, readily convince them of the baselessness of the defamatory comment, and compensate the plaintiff for the injury to their reputation.
- An award should not be large to the point that it is unfair to the defendant or would have the effect of restricting freedom of expression, particularly that enjoyed by the media as guaranteed by Article 40.6.1 of the Constitution.
- The award must, therefore, meet proportionality standards if constitutional guarantees in respect of free expression are not to be compromised by the chilling effect of disproportionately high awards.
- An appellate court must, however, exercise great caution before setting aside the determination of a jury in a defamation case.
- When determining whether or not a jury award is disproportionate, the appellate court may, for the purpose of guidance, have regard to: (i) previous awards made or endorsed by the Supreme Court; (ii) a comparison between the award and the level of general damages commonly awarded in the most serious personal injuries cases; and (iii) (recognising that the award will not be subject to tax) how long an individual would have to work to amass such a sum, and what might be purchased with that sum.
The Court of Appeal concluded that the award of €9m in compensatory damages should be set aside for the following reasons:
- Prior to this case, the greatest award made or upheld by the Supreme Court in a defamation case was €1.25m (Leech v Independent News and Media). The award, in this case, was approximately seven times greater. In the Court's view, no reasonable jury or court could consider the defamation in this case to be more serious than that in the Leech case.
- The award was also 15 times more than might be awarded to a child with a condition such as cerebral palsy as a result of medical negligence at the time of their birth, or to a young person rendered quadriplegic. While recognising that the purpose of an award of general damages in a personal injury action is different from that in a defamation action, the Court considered that the awards of general damages in the most severe personal injuries cases provide a "good moral compass to guide a jury or an appellate court towards the making of a proportionate and fair award in a defamation claim". Accordingly, the Court was satisfied that no jury could reasonably have come to the conclusion that an award of the magnitude of €9m was necessary to compensate the plaintiff for his hurt and upset and to re-establish his reputation.
- The allegation made against the plaintiff, when considered on a scale of potential allegations concerning sexual misconduct, was not, in the view of the Court of Appeal, anywhere near the top of that scale. The Court considered, therefore, that the logical consequence of finding that the award of €9m was proportionate would be that awards in excess of €10m might become an unexceptional feature of defamation proceedings in this country, at least in cases of serious defamation. This, the Court noted, would likely have a chilling effect on freedom of expression, particularly insofar as the news media is concerned, and be offensive to public opinion (taking into account what ordinary members of society can expect to earn over a lifetime or what might be purchased with a sum of that size).
- The gravity of the libel and the effect it had on the plaintiff was of a significantly lesser magnitude than in the most serious defamation cases which had come before the Irish Courts. Accordingly, having regard to the fact that the award here was several multiples greater than any of the awards in those cases, it had to be set aside as disproportionate to the injury sustained and the plaintiff's entitlement to have his good name vindicated.
- The plaintiff was also not a well-known public figure and the extent of the publication was, in the Court's view, far less damaging than would have been in the case of a plaintiff who was well-known internationally.
- The Court also considered that the magnitude of the award was unfair to the defendants and one which provided the plaintiff with an unjustifiable windfall.
The Court, therefore, set aside the jury's award and, having applied the factors noted above, determined that a just and fair award would be €250,000. The Court also set aside the award of aggravated damages in its entirety.
The judgment suggests that defamation awards in excess of €1m will be appropriate in only the most serious cases, and that appellate courts will not allow plaintiffs in defamation cases to receive money judgments which far exceed awards in cases of catastrophic injuries and bear no relation to the lifetime earning capacity of ordinary members of society.
In other words, it appears that the recovery of 'windfall' defamation awards will not be permitted by the Irish Courts.
It should also be noted that section 31 of the Defamation Act 2009 did not apply in this case. Section 31 allows parties to make submissions to the Court in relation to the matter of damages in a defamation action, and requires the trial judge to give directions to the jury in relation to the matter of damages. It is likely that the absence of such guidance in this case contributed to the disproportionate award made at first instance.