The Test of Serious Financial Harm - Defamation
Claimants gets second bite of the damages cherry when meeting the serious harm threshold in defamation claims:
In the case of Tinkler v Ferguson & Ors  EWCA Civ 819, the Court of Appeal gave much-needed amplification on whether a claimant is able to validate by evidence and at trial that a defamatory statement has or is likely to cause ‘serious harm’ to his/her reputation. In this matter and after the Court has declined to draw an inference of serious harm at an interlocutory stage based on the gravity of the allegation. The much needed ruling from the Court of Appeal indicates that a claimant should be given this opportunity.
In the pivotal case of Lachaux v Independent Print Ltd  EWCA Civ 1334 the Court of Appeal stated ‘if a meaning is found by the court to be seriously defamatory’ it will ordinarily then be proper to draw an inference that serious reputational harm will follow. This decision paved the way for claimants to overcome the serious harm threshold contained in section 1(1) of the Defamation Act 2013 at an interlocutory stage without the need for evidence.
While there could be no doubt that a case in which an inference of serious harm is drawn should be allowed to proceed, the question arose in cases where the Court did not draw such an inference as to whether evidence of serious harm could subsequently be relied on to satisfy the s.1 (1) threshold (or whether the claim had effectively failed at that hurdle). Mr Justice Nicklin indicated it could. In Morgan v Associated Newspapers Ltd  EWHC 1725, for instance, he stated: -
“If the Claimant is unable to rely upon the inference of serious harm, he would need to prove that the Article, in the wording of s.1(1), "has caused" serious harm to his reputation and would be a matter of evidence at trial.”
However, Mr Justice Warby, the Judge in charge of the Media and Communications List, appeared to disagree. In Sube v News Group Newspapers Ltd  EWHC 1234, he stated:-
“If the words fall short of conveying a seriously harmful defamatory imputation, no amount of evidence can make up the deficiency.”
On this issue, the Court of Appeal in Tinkler have preferred Mr Justice Nicklin’s approach. Lord Justice Longmore, giving the leading judgment, stated:
“..in agreement with the judge, that an inference of serious harm cannot be drawn. The result of that is that, if Mr Tinkler wishes to pursue his defamation claim by reference to the single defamatory meaning found by the judge, he will have to demonstrate by evidence that the Announcement has caused or is likely to cause serious harm to his reputation.”
Thus, the Court of Appeal has found that evidence could make good a claimant’s case on serious harm where the Court has refused to draw an inference.
Given this decision, there ought to be little to deter a claimant who has brought an action for libel in respect of a serious allegation from inviting the Court to draw an inference of serious harm at any hearing where the court has already been asked to determine the meaning of the words complained of (which happens frequently in libel claims). As the authorities have made clear, serious harm is evaluated having regard to the seriousness of the imputation conveyed by the words used: coupled, where necessary or appropriate, with the context in which the words are used. As stated above, this assessment does not call for evidence, and there is no need for extensive submissions from either side on the issue. If the claimant fails at this stage, then it is now clear that they will have a second chance to establish serious harm has been caused or is likely to be caused with recourse to evidence.