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Case Law: Tesla Motors v BBC, Libel and Malicious falsehood – Edward Craven

The BBC’s Top Gear is no stranger to controversy. Renowned for its irreverent brand of humour, comments on the show have landed the BBC in hot water on more than one occasion. But while they often occupy the headlines, such incidents have rarely ended up before the courts. The recent Tesla v BBC case ([2012] EWHC 310 (QB)) is a notable exception.

In the Tesla case unfavourable statements about an electric car led to claims for libel and malicious falsehood being issued against the BBC. During the most recent interlocutory skirmish, Tugendhat J refused the claimants permission to amend their Particulars of Claim. Having previously struck out the claims, the most recent judgment effectively ends the Tesla proceedings.

From a media lawyer’s perspective, Tugendhat J’s judgment raises some interesting issues concerning the tort of malicious falsehood. In particular, it considers important questions about the correct application of s. 3 of the Defamation Act 1952.

The facts

The claimants are the manufacturers and sellers of the “Roadster” electric car. Their claim concerned unfavourable comments made about the Roadster in an episode of Top Gear that was first broadcast in December 2008. The episode featured a comparison between the Roadster electric car and the Lotus Elise, a conventional petrol-powered car. The cars were filmed racing each other around the Top Gear test track. After praising the speed of the Roadster in emphatic terms, Jeremy Clarkson, the show’s presenter, proceeded to make the following unfavourable remarks:

“This car really was shaping up to be something wonderful but then… [artificially dying motor sounds and musing slowing down and stopping] …although Tesla say it will do 200 miles we have worked out that on our track it will run out after just 55 miles and if it does run out is not a quick job to charge it up again. [Footage of people pushing the Roadster into the hangar followed by Jeremy Clarkson inserting the charger into the Roadster.]”

In March 2011, more than two years after the episode was first broadcast, the claimants issued claims in libel and malicious falsehood against the BBC. They claimed sales of the Roadster had been badly affected by the Top Gear feature. The Particulars of Claim identified five alleged falsehoods:

(1)  The first Roadster shown did not run out of charge.

(2)  The first Roadster did not have to be pushed back into the hangar as a result of running out of charge.

(3)  At no point were the brakes of the first Roadster broken.

(4)  The second Roadster did not become immobile as a result of overheating.

(5)  There was no point in time when both Roadsters were unavailable for driving.

The BBC resisted both claims. It argued that in relation to each alleged falsehood there was a true and unfavourable statement concerning the same issue. For example, in relation to allegations (1) and (2) the BBC agreed that the first Roadster did not run out of charge and did not have to be pushed back into a hangar. However the BBC argued that the words complained of did not actually mean the car had run out of charge. The words “on our track it will run out after just 55 miles” were in fact true.

In October 2011 the judge struck out the claims. The claim in libel failed on the basis that the words complained of were not capable of bearing the defamatory meaning pleaded by the claimants. The malicious falsehood claim was struck out on the basis that the claim for damages under s. 3 of the Defamation Act 1952 was so lacking in particularity that it should not be allowed to proceed. Following these two rulings, the claimants sought permission to amend the pleadings.

Malicious falsehood

The claim in malicious falsehood gave rise to a number of interesting points. These mainly concerned the interpretation of s. 3 of the Defamation Act 1952, which relieves claimants from the usual requirement in malicious falsehood claims of pleading and proving actual loss.

Section 3(1) states:

“(1) In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage – (a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form;…”

The first question that Tugendhat J considered was the meaning of the word “calculated” in the phrase “calculated to cause pecuniary damage”. In Ferguson v Associated Newspapers Ltd (unreported) Gray J held that “calculated” meant “more probable than not” rather than “something which is a possibility”. Any lower threshold would be incompatible with Article 10, which requires that any restriction of the right to freedom of expression must be strictly justified as necessary in a democratic society. Lewison J subsequently followed Ferguson in IBM v Websphere Limited ([2004] EWHC 529 (Ch)).

In Tesla the claimants sought to distinguish Ferguson and IBM on the ground that the decisions predated the House of Lords’ judgment in Re S ([2005] 1 AC 593), which made it clear that Article 10 does not enjoy priority over any other Convention right. In the present case the claimants’ right to protection of property under Article 1 of the First Protocol must be weighed in the balance. Moreover, the issue of damages in a malicious falsehood claim only arises if the court has found that the defendant maliciously made a false statement. Since there is no public interest in the dissemination of malicious falsehoods, Article 10 is not engaged at this stage.

Tugendhat J declined to provide a conclusive answer on this issue since the present case did not turn on the standard of proof. Nevertheless, he indicated his disagreement with the claimant’s construction. While there was force in the argument that Article 10 is not engaged by the time s. 3(1) kicks in, this merely disposes of the Human Rights Act arguments. The submission that s. 3 of the 1952 Act introduces a lower standard of proof than the usual civil standard “does not seem to me to be supportable”. The decisions of Gray and Lewison JJ were “at the very least persuasive” and “still good law” [48].

The judge then had to consider two interesting questions of causation. First, what is the court required to take into account when considering the damage issue? In particular, is it required to consider the effect of the whole broadcast, including favourable words and images? Secondly, should the court have regard to the effect of statements in the broadcast that were unfavourable to the claimant but true?

In relation to the first question, the judge was content to proceed on the assumption that the claimants would establish that the broadcast as a whole was calculated to cause pecuniary damage [57]. It was therefore unnecessary to resolve this issue.

In relation to the second question, Tugendhat J referred to the Court of Appeal’s judgment in Ajinomoto Sweeteners Europe SAS v ASDA Stores Ltd ([2010] EWCA Civ 609), which highlighted the need for attention to causation in cases of malicious falsehood. He then held that the claimants were unable to prove that the alleged falsehoods were calculated to cause damage beyond the harm caused by the unfavourable but true statements [83]:

“In my judgment there is no real prospect of the Claimants showing that the alleged falsehoods were calculated to cause (or did cause) damage additional to the damage calculated to be caused (or in fact caused) by the unfavourable statements that are admittedly true. A reasonable prospective buyer would be understandably concerned and put off by facts such as that the range might be significantly less than 200 miles in certain conditions, and that the electric power to the brakes is unreliable. If such a person is concerned by these issues, it is hard to see what, if any, additional concern would arise by reason of the fact that trial car [sic] was (falsely) said to have actually run out of power when driven in the Top Gear tests, or by the fact that it was (falsely) said that the brakes had failed.”

In substance the claimants were seeking a declaration of falsity [84]. However:

“Rectification of inaccuracies is not the function of the courts unless that can be achieved in the course of proceedings properly brought to enforce a recognised cause of action… Complaints about accuracy cannot all be advanced so as to amount to causes of action for defamation or malicious falsehood. If they cannot be pleaded adequately to give rise to one or other of those causes of action, it is not open to the court to relax the criteria to enable the claimant to proceed in any event.” [85]

Libel

At an earlier hearing Tugendhat J had rejected the claimants’ submission that the words complained of were capable of bearing a Chase Level 1 meaning that the claimants had intentionally or recklessly misled potential purchasers of the Roadster. In the light of this ruling, the claimants applied for permission to amend the particulars of claim to plead a Chase Level 2 meaning that “there were reasonable grounds to suspect that each of the Claimants had intentionally and significantly misrepresented the range of the Roadster by claiming that it had a range of about 200 miles in that its true range on the Top Gear Track was only 55 miles.” The claimants did not allege that the words meant there were reasonable grounds to suspect them of dishonesty. Instead, the words suggested that the claimants had committed an offence of giving a false trade description.

Tugendhat J held that the words in question were not capable of bearing this meaning [105]. Any reasonable motorist knows that a manufacturer’s statement about the range of a car is always qualified by a statement about the driving conditions under which that range may be expected. Such statements are rarely if ever given to the public by reference to racing on a test track [106]. Further, if the claimants do not advance a meaning that includes a reference to their statement of mind (whether it be intentional, reckless or negligent) then it would not be defamatory simply to say that there were reasonable grounds to suspect that they misled prospective customers.

In short the judge did not accept that

“any reasonable viewer of the Top Gear programme could understand that there was an allegation that the Claimants had given a false trade description. The newly proposed meaning is not capable of being defamatory at all, or, if it is, it is not capable of being a sufficiently serious defamatory meaning to constitute a real and substantial tort.” [107]

Comment

For understandable reasons Tugendhat J confined himself to answering the questions that were necessary to dispose of the claimants’ application to amend. In relation to these issues, the judge’s analysis would seem to be correct.

In particular, Tugendhat J was surely right to consider the effect of the “unfavourable but true” statements in the Top Gear broadcast. Disregarding those statements would risk compensating the claimants for losses that were attributable to true statements rather than falsehoods. This is clearly undesirable and would conflict with the fundamental purpose of the tort: providing compensation for harm caused by deliberate false statements.

The judgment leaves some interesting questions unanswered. In particular, it remains to be seen whether the courts must disregard the effect of favourable statements in the defendant’s publication. Claimants in defamation actions are free to fillet the impugned publication by limiting their complaint to particular words; the fact that a publication also contains glowing praise about the claimant does not stop liability arising. Should a similar principle apply in malicious falsehood?

On the one hand, the language of s. 3 (“the words upon which the action is founded are calculated to cause pecuniary damage”) suggests that the court’s inquiry is confined to the words complained of and that no account may be taken of positive statements elsewhere in the same publication.

On the other hand, if the sting of a falsehood is cancelled out by other comments then fairness arguably requires this to be taken into account. Gatley on Libel and Slander (11th edn.) suggests that later words can protect a defendant from liability by neutralising the impact of an earlier statement: “A speedy correction and apology may mean that pecuniary loss is not the natural consequence of the falsehood.” If so, a similar approach should apply to contemporaneous statements which counteract the effect of the falsehood.

This issue also gives rise to difficult evidential questions: how does one weigh praise against denigration? And if the court is entitled to offset positive comments against falsehoods, how close a connexion is required between the two? Must the two statements appear side by side in the same publication (or broadcast) or is a more wide-ranging inquiry appropriate? Can a defendant pray in aid positive statements made on an earlier occasion or in a separate publication? These interesting questions await determination in a later case.

Tugendhat J’s judgment also leaves unresolved the meaning of the expression “calculated” in section 3. The judge clearly favoured the construction adopted in Ferguson and IBM. Again, this approach would seem to be correct. In Ratcliffe v Evans ([1892] 2 QB 524) Bowen LJ emphasised that proof of special damage was an essential ingredient of the malicious falsehood cause of action (“[t]o support it actual damage must be shewn, for it is an action which only lies in respect of such damage as has actually occurred”). Section 3(1) was intended “to relieve a claimant of the evidential difficulties of proving actual damage” (per Gray J in Ferguson). Adopting a lower standard of proof than the balance of probabilities would potentially eviscerate the central role of special damage in the tort.

Finally, the Tesla judgment serves as a reminder that claimants can only obtain a declaration of falsity by establishing liability under a recognised cause of action for defamation or malicious falsehood. The mere fact that a statement is untrue – even significantly so – does not empower the court to make a declaration to this effect.

Edward Craven, Barrister, Matrix Chambers

2 Comments

  1. Owen

    Defamation Act 1952, no?

    Nit-picking, sure. V interesting piece

  2. INFORRM

    Thank you, corrected.

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