There has, over the last few months, been widespread criticism from the press of Lord Justice Leveson’s recommendations about exemplary damages. These recommendations have been widely misreported and misunderstood. Many have been misled by words like “punitive” and “fines” into thinking that such damages would be imposed as a matter of routine on publishers who make mistakes. In fact, properly understood, exemplary damages are the best available approach for protecting the rights of victims and public interest journalism.
Such damages would be available only against “outrageous” wrongdoing – of the kind disclosed, for example, in the “phone hacking” cases – not against those engaged in public interest journalism. Exemplary damages are the most appropriate remedy to deal with outrageous misconduct whilst protecting public interest journalism. I will develop this argument but, before I do so, I need to deal with Lord Justice Leveson’s recommendations and the “Article 10” issue.
The Leveson Recommendations
First, there are Lord Justice Leveson’s recommendations. He says that exemplary damages “should be available in actions for breach of privacy, breach of confidence and similar media torts” (Leveson Report Vol IV page 1512 para 5.12). This extension of the availability of exemplary damages was intended to be general – to cover breach of privacy, breach of confidence and so by anyone, not just the media. Furthermore, membership of a “recognised regulator” was not intended to provide immunity from exemplary damages. Lord Justice Leveson recommended that “Voluntary Participation in a regulatory regime contained in or recognised by statute and good internal governance in relation to the sourcing of stories should be relevant to the decisions reached in relation to such damages” (Leveson Report Vol IV page 1512 para 5.12).
It is important to understand what, precisely, was being recommended in relation to exemplary damages. These are not “fines” for those who break the rules or fail to join a regulator. As recommended by the Law Commission, they are to be awarded only if
(a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights,
(b) the conduct is such that the court should punish the defendant for it, and
(c) other remedies would not be adequate to punish that conduct.
These are very high hurdles and would only be surmounted in very rare cases – where, for example, there was a publication of private information which was known to have been stolen or illegally accessed, where the publisher knew that there was no public interest involved (which would cover most, if not all, “phone hacking” cases but not much else in the recent case law). Good faith public interest journalism would not be caught by this provision. I will return to this point below.
The test of “outrageous” conduct is, by the way, derived from the Commonwealth and US case law (see the Law Commission Report, para 5.46). The Law Commission draws attention to the American Law Institute’s Restatement of the Law of Tort (2d) (1979), section 908, which reads:
(1) Punitive damages are damages, other than compensatory or nominal damages, awarded against a person to punish him for his outrageous conduct and to deter him and others like him from similar conduct in the future.
(2) Punitive damages may be awarded for conduct that is outrageous, because of the defendants evil motive or his reckless indifference to the rights of others. In assessing punitive damages, the trier of fact can properly consider the character of the defendants act, the nature and extent of the harm to the plaintiff that the defendant caused or intended to cause and the wealth of the defendant.
If these recommendations had been implemented it would have meant that there would have been no “singling out” of a particular category of defendant for punishment. Everyone who misused private information outrageously would, potentially, be liable to pay exemplary damages, whether or not they were members of an approved regulator. Membership of the regulator would simply have been a factor to be taken into account in favour of a publisher. It would show that the publisher was, conscientiously, trying to avoid wrongdoing.
Unfortunately, apparently in response to press pressure, the Government has not fully implemented these recommendations. Instead, it has extended exemplary damages only to actions against “relevant publishers” and has provided a (very slight qualified) immunity against exemplary damages to members of an approved regulator. This lays the scheme open to the charge – made by Lord Black in the House of Lords on Monday 25 March 2013 – that it singles out a particular class of defendants for liability to pay exemplary damages. Although such “singling” out can, doubtless, be justified – on the basis of the policy objectives served by exemplary damages – it is unfortunate that the Government have taken this course in defiance of Lord Justice Leveson’s views.
Exemplary Damages and Article 10 (again)
Second, there is the argument, referred to by Gill Phillips on this blog last week and repeated by Lord Black in his speech, that exemplary damages are contrary to Article 10. As I have said more than once, (see my posts here and here) it would be surprising if such damages were, in all circumstances, in violation of the right to freedom of expression as they are available in both the United States and Canada – which both have strong constitutional and quasi-constitutional protection for freedom of expression. Exemplary damages for libel were upheld by the Supreme Court of Canada in the case of Hill v Church of Scientology ( 2 SCR 1130). In that case, the Court said of exemplary or “punitive damages” (referring to libel, but deploying reasoning which would apply equally to privacy claims)
Punitive damages can and do serve a useful purpose. But for them, it would be all too easy for the large, wealthy and powerful to persist in libelling vulnerable victims. Awards of general and aggravated damages alone might simply be regarded as a licence fee for continuing a character assassination. The protection of a person’s reputation arising from the publication of false and injurious statements must be effective. The most effective means of protection will be supplied by the knowledge that fines in the form of punitive damages may be awarded in cases where the defendant’s conduct is truly outrageous. 
Lord Black and others have referred to a passage from the European Court of Human Rights in which it was said that “the threat of criminal sanctions or punitive fines would create a chilling effect which would be felt in the spheres of political reporting and investigative journalism, both of which attract a high level of protection under the Convention” (Mosley v United Kingdom  ECHR 274 ). But this is a quotation taken out of context with no relevance to the issues. The Court was talking about a “pre-notification” requirement being imposed on the press supported by criminal or regulatory penalties. It said (rejecting an argument attributed to Mr Mosley’s Counsel, Lord Pannick QC – see his speech here)
“Although punitive fines or criminal sanctions could be effective in encouraging compliance with any pre-notification requirement, the Court considers that these would run the risk of being incompatible with the requirements of Article 10 of the Convention. It reiterates in this regard the need to take particular care when examining restraints which might operate as a form of censorship prior to publication. It is satisfied that the threat of criminal sanctions or punitive fines would create a chilling effect which would be felt in the spheres of political reporting and investigative journalism, both of which attract a high level of protection under the Convention”.
This analysis does not bear on the question of whether post publication exemplary damages awards would be incompatible with Article 10. The Court of Human Rights says nothing about this in Mosley (or anywhere else).
Exemplary damages, deterrence and public interest journalism
Let me now turn to the main argument. I suggest that, contrary to the position taken by many commentators, exemplary damages are actually the best way to balance the interests of public interest journalism with the rights of victims.
It must be remembered that awards of damages for “non financial loss” – such as libel or invasion of privacy – are entirely “conventional figures”. The court picks out a range of figures – which could be much higher or lower. The range for serious libels or invasions of privacy could, for example, be between £100 and £10,000 or between £100,000 and £1,000,000. The former kind of range is more common in civil law systems (such as France or Italy), the latter in jurisdictions such as the United States. In English law the “conventional figures” are much higher than in, say, France but much lower than in the United States.
Nevertheless, privacy damages are very often lower than the sums which tabloid newspapers have been prepared to pay to obtain private information – in other words, lower than the value they appear to put on the story. The difficulty with such low levels of damages is that – as the Supreme Court of Canada pointed out – it means that a wrongdoer can “buy” the right to defame someone or invade their privacy. They can, in other words, decide that the wrongful publication of private information where there is no public interest is “worth their while” because the damages are small and the commercial benefits of the story are large.
This is a problem which cannot, sensibly, be ignored: we cannot, to adapt the words of the Supreme Court of Canada, allow the large, wealthy and powerful to persist in invading the rights of vulnerable victims without any effective sanction. The powerful cannot be permitted to engage in a form of “compulsory purchase” of an individual’s rights: there needs to be some kind of effective form of redress which protects against this kind of abuse.
It seems to me that there are three ways of dealing with this problem:
- The general, conventional scale, of damages could be increased so as to provide a real deterrent to wrongdoers. If an invasion of privacy resulted in an award of, say, £500,000 then a newspaper would think twice before publishing private information. The importance of having awards of compensatory damages which are high enough to deter was, for example, at the centre of the reasoning of the Privy Council in the case of Gleaner v Abrahams ( AC 628). Lord Hoffmann said of defamation damages, that they
often serve not only as compensation but also as an effective and necessary deterrent. The deterrent is effective because the damages are paid either by the defendant himself or under a policy of insurance which is likely to be sensitive to the incidence of such claims. Indeed, the effectiveness of the deterrent is the whole basis of [counsel’s]… argument that high awards will have a “chilling effect” on future publications. Awards in an adequate amount may also be necessary to deter the media from riding roughshod over the rights of other citizens .
- Other sanctions could be imposed – in addition to the payment of compensation. For example, in many legal systems invasion of privacy and defamation attracts criminal as well as civil penalties. This was the suggestion made, for example, by Sedley LJ in Kiam v NGN ( QB 281) and repeated by him elsewhere.
- A special kind of damages could be available to cover those cases where the wrongdoer has set out deliberately to infringe a person’s rights – this category of damages would not be available in respect of “ordinary”, honest or mistaken infringements of rights.
The problem with the first alternative is obvious. It would impact not just on the deliberate wrongdoer but also on the publisher who made an innocent and honest mistake. For example a publisher acting in good faith who wrongly decided that a publication was in the public interest would be exposed to higher damages. Public interest journalism would be chilled.
There is also a clear problem with the second alternative. The English legal system has removed criminal sanctions for defamation and has never imposed them for misuse of private information in ordinary cases. The imposition of criminal liability would be viewed by most people as a retrograde step. It would also have a serious potential chilling effect on public interest journalism. Despite the powerful arguments of Sir Stephen Sedley in this regard, there are few who would be willing to follow him down this route.
The third alternative is that which was recommended by Lord Justice Leveson: making exemplary damages available for outrageous violations of rights, including the right to privacy. He recommended the extension of exemplary damages precisely to provide a deterrent to deliberate breaches of rights
“the basic principle is straightforward. The commercial benefit from publishing material obtained in breach of right to privacy or confidence is likely greatly to exceed the basic award of damages … and constitutes no real deterrent” Leveson Report J, para 5.12, p.1512).
This deterrent is the most favourable to public interest journalism. It does not involve a general increase in damages (which would hit everyone) or criminal sanctions. Instead it focuses attention where it needs to be focussed: on those who have shown a reckless or deliberate disregard of an outrageous nature for the rights of others. This test would not, I repeat, catch the public interest journalist who publishes private or defamatory information in the honest but mistaken belief that it is proper to do so. This would not be a deliberate and outrageous disregard of rights.
In other words, public interest journalism has nothing to fear from exemplary damages. It is the tabloids – who have casually trashed the reputations and shredded the privacy of individuals for commercial gain – that have something to fear. Similarly, local newspapers, community websites and the large majority of bloggers are not in the business of the “deliberate disregard of rights”. If they make honest mistakes in the course of reporting news or trying to expose wrongdoing they have nothing to fear.
Once the very limited circumstances in which exemplary damages can be awarded are appreciated it should be clear that they are no threat whatever to public interest journalism. And once their purpose is understood then it is, I suggest, equally clear that this is the best approach for those who believe in public interest journalism. The law needs to have a remedy to make it clear that the deliberate and outrageous breach of the rights of individuals does not pay, whilst, at the same time, keeping awards of damages in “ordinary cases” at sensible and proportionate levels. The Law Commission formula for exemplary damages which Lord Justice Leveson adopted does just that.
This seems to me to be a sensible and pragmatic solution to the “deterrence” issue. The Courts in other common law jurisdictions have decided that the availability of exemplary damages is the best way of “holding the balance” between free speech and the rights of individuals in this area. The onus should be on those who complain that such awards are inappropriately chilling and contrary to Article 10 to propose an alternative mechanism whereby proper remedies can be granted for outrageous breaches of rights by the powerful.
Hugh Tomlinson QC is the chair of Hacked Off and an editor of Inforrm