Opinion: “Libel shopping and legislative changes” – Sara Mansoori

8 03 2011

The ramification of the decision in Ehrenfeld v Bin Mahfouz ([2005] EWHC 1156 (QB)) are still continuing to be felt both at home and abroad. Following the judgment of Mr Justice Eady in 2005, swift legislative changes were put in place in the US to halt “libel tourism”, initially at a State level and then, in October last year, at a Federal level.  In the UK, a widely reported statement made during the election campaign by Nick Clegg claimed that “libel tourism is making a mockery of British justice”. However, Professor Andrew Klein considers, in his recent paper ‘Some Thoughts on Libel Tourism’, that the proposed reforms to the law of defamation in Lord Lester’s Defamation Bill and the draft Government Bill due out for consultation later this month, “should be viewed as an opportunity for a cooperative approach to the problem of libel tourism”.

Ms Ehrenfeld was the author of a book entitled “Funding Evil: How Terrorism is Financed – and How to Stop It” published by a Chicago based publisher. The book alleged that Khalid Salim Bin Mahfouz, a Saudi Arabian financier, provided support for al Qaeda and “other Islamic terror groups”. Only 23 copies were sold in the UK via the internet and a chapter of the book was available in the ABC News website in the UK.   Bin Mafouz sued in England for libel and Ms Ehrenfeld refused to appear. As a result default judgment was entered, damages awarded, and additional publication prohibited.

It may have been that Ms Ehrenfeld had a potential defences to the claim – she could have set up a Reynolds defence of responsible journalism, or that she could have argued that it should be struck out as an abuse of process on Jameel grounds (Jameel v Dow Jones [2005] QB 946). However, despite the fact that Ms Ehrenfeld was not able to have the judgment against her declared unenforceable by the New York Courts (as they did not have personal jurisdiction), given the subsequent major legislative changes that took place in the US as a result of this single judgment, it can plausibly be said that she was the ultimate victor.

In 2008 the New York legislature passed the Libel Terrorism Protection Act, N.Y. CP.L.R. Sec. 5304 in an effort to prevent a similar type of situation from arising again. This dealt with the issue of personal jurisdiction which had cause problems for Ms Ehrenfeld by providing that:

The courts of this state shall have personal jurisdiction over any person who obtains a judgment in a defamation proceeding outside the United States against any person who is a resident of New York or is a person or entity amenable to jurisdiction in New York who has assets in New York or may have to take actions in New York to comply with the judgment, for the purposes of rendering declaratory relief with respect to that person’s liability for the judgment, and/or for the purpose of determining whether said judgment should be deemed non-recognizable pursuant to section fifty-three hundred four of this chapter, to the fullest extent permitted by the United States constitution, provided:

1. the publication at issue was published in New York, and

2. that resident or person amenable to jurisdiction in New York

(i) has assets in New York which might be used to satisfy the foreign defamation judgment, or

(ii) may have to take actions in New York to comply with the foreign defamation judgment. The provisions of this subdivision shall apply to persons who obtained judgments in defamation proceedings outside the United States prior to and/or after the effective date of this subdivision.

The New York Act further provided that foreign judgments would not be recognized if “rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law” and also provided that  “defamation judgments obtained in a jurisdiction outside the United States” will not be recognized unless a New York court determines that the defamation law applied provides at least as much protection for free speech and press as would be accorded by New York courts.

Following the enactment in New York of what was referred to by some as “Rachel’s law”, at least three other States followed suit: California (Cal Civ Proc Code 1716-1717 (West Supp 2009); Florida  (Fla. Stat. Sec. 55.605 (2) (h) (2009)), and Illinois (735 Ill. Comp. Stat. 5/12-621(b)(7) (2009).)

Congress members reacted to these moves by drafting national legislation aimed at libel tourism.  After two proposed bills that addressed the issue in 2008 and 2009, Congress finally passed the SPEECH (Securing the Protection of Our Enduring and Established Constitutional Heritage) Act which was signed into law by President Obama on 10 August 2010.

The findings of Congress set out in this Act are blunt and direct, particularly when one bears in mind the central role that Bin Mahfouz and Mr Justice Eady’s judgment played in the background and build up to the SPEECH Act. Congress, having referred to the first amendment and stated that it is “necessary to promote the vigorous dialogue necessary to shape public policy in a representative democracy” went on to note that:

some persons are obstructing the free expression rights of United States authors and publishers, and in turn chilling the first amendment to the Constitution of the United States interest of the citizenry in receiving information on matters of importance, by seeking out foreign jurisdictions that do not provide the full extent of free-speech protections to authors and publishers that are available in the United States, and suing a United States author or publisher in that foreign jurisdiction”.

Congress continue to refer to “The advent of the internet and the international distribution of foreign media also create the danger that one country’s unduly restrictive libel law will affect freedom of expression worldwide on matters of valid public interest” before concluding that “Governments and courts of foreign countries scattered around the world have failed to curtail this practice of permitting libel lawsuits against United States persons within their courts, and foreign libel judgments inconsistent with United States first amendment protections are increasingly common”.

The SPEECH Act itself provides that notwithstanding any other provision of Federal or State law, a domestic court shall not recognize or enforce a foreign judgment for defamation unless the domestic court determines that the defamation law applied by the foreign court provided at least as much protection for freedom of speech and press as would be provided by the first amendment to the Constitution of the United States and by the constitution and law of the State in which the domestic court is located; or, even if the said defamation law did not provide as much protection, the party opposing recognition or enforcement of that foreign judgment would have been found liable for defamation by the US domestic court applying US law. The Act also expressly provides protection to individuals who might find themselves in a position similar to Rachel Ehrenfeld by providing that “an appearance by a party in a foreign court rendering a foreign judgment … shall not deprive such party of the right to oppose the recognition or enforcement of the judgment…or represent a waiver of any jurisdictional claims”.

In his paper Professor Klein points to three particular issues which led to criticism from those concerned about ‘libel tourism’ and are important to bear in mind when considering these new laws in the US:

First, the English judgment was inconsistent with US law – or at least Bin Mahfouz would have had a more difficult time securing victory due to (i) the need to prove ‘actual malice’ following New York Times v Sullivan 376 US 254 (1964) and (ii) the presumption that the allegation is true with the burden being on the plaintiff to prove falsity;

Second, there is the crucial difference between the ‘multiple publication rule’ which exists in England whereby each separate publication gives rise to a fresh cause of action and the prevailing US position where the publication of a defamatory matter gives rise to but one cause of action for libel, which accrues at time of the original publication and the statute of limitation runs from that date; and

Third, there is the fact that an English Court issued a judgment against Ehrenfeld despite her limited contact with England, whereas the US Courts interpret due process as requiring a defendant to have minimum contact with a state before personal jurisdiction can attach.

Professor Klein points to Lord Lester’s Defamation Bill which, with its proposal to codify Reynolds in Clause 1; the new publication rule in Clause 10 and the express reference to libel tourism in clause 13 (which provided that where “the words or matters complained of have also been published outside the jurisdiction” “no harmful event is to be regarded as having occurred in relation to the claimant unless the publication in the jurisdiction can reasonably be regarded as having caused substantial harm to the claimant’s reputation having regard to the extent of the publication elsewhere”) and suggests that these would have gone a long way into bringing English defamation law into line with US law.

However is it right that the English law of libel should be brought into line with US law? How would that sit with the expanding right to privacy that is being developed? Moreover, given the recent approach of the Canadian Court of Appeal in Paulsson v. Cooper2011 ONCA 150, where it held that the Courts of Ontario had jurisdiction against the respondent publisher who resided in the US and the author who resided in Australia, in respect of a libel claim where only 81 copies were published in Ontario, it is clear that the English Courts are not alone in their approach to assume jurisdiction in such cases.

Lord Lester’s Bill has not been adopted but it has been said to have “greatly assisted” the Government’s thinking. Inforrm’s overall verdict on first reading Lord Lester’s Bill was that it was not a substitute for a thoroughgoing review of the existing law.

The Government’s new draft Defamation Bill is due out for consultation later this month.  It will be interesting to see what this contains and what, if any, impact it will have on libel tourism and forum shoppers.

Sara Mansoori is a barrister who will, from 1 April 2011, be a member of Matrix Chambers (see the announcement here)


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4 responses

8 03 2011
Brian Rogers

The Ontario Court of Appeal case – Paulsson v. Cooper – cited by Ms. Mansoori is hardly a good example of “libel tourism”. In fact, the key reason the court ruled in favour of the plaintiff was that he had resided in Ontario since 1958, apart from a 10-year stint largely based in England, and had his reputation rooted in the jurisdiction. The 81 copies (out of 3258) were in local university libraries since the publication under attack was an academic journal. The author was Australian and the publisher based in the United States, so there was no obvious alternative. However, the issue of what law should apply remains open, and in any event, one can hope the “fair comment” defence recently renewed by the Supreme Court of Canada will protect the book review that so upset the plaintiff – at least, as long as the author got his facts right, which is apparently in contention. In any event, the plaintiff was no “tourist” with few ties to the jurisdiction – unlike a number of plaintiffs whose libel cases were taken on by UK courts.

4 09 2011
George Frideric

The recent SCC rulings do not concern fair comment, which has always been a defence in all common-law jurisdictions, and applies to statements of opinion, not to factual claims. Rather, the SCC has expanded the defence of qualified privilege with respect to untrue statements of fact, by incorporating the English principle of “responsible journalism”, which requires the defendant to meet the tests of public interest and due diligence.

While the issue is framed as one of “protection of reputation” versus “freedom of speech”, the distinction is often a false one. Defamation can be a very effective way of silencing someone, as was frequently demonstrated during the McCarthy era. The blogosphere, which tends to circle the wagons around defendants in libel cases, should take that into account. The radical American approach, which makes it nearly impossible for a plaintiff to win a libel suit, also has disadvantages for both sides. Deborah Lipstadt, asked why she did not challenge jurisdiction in David Irving’s libel suit against her, replied that she wanted the case heard in a plaintiff-friendly jurisdiction, so everyone would know that she had Irving dead to rights. The American approach leaves plaintiffs unable even to get vindication through the courts, and leaves defendants under a cloud.

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