In the case of Pannu v Carter ( EWHC 3270 (QB)) a taxi-driver failed in a bid to sue a partner in a competitor firm for slander because he was unable to demonstrate that he had suffered special damage – a measurable financial loss – as a result of the alleged publication.
The claimant, Mandeep Singh Pannu, who works for Strood Cabs in Medway, and had previously worked for Medway Council as a transport inspector, and in its crime prevention unit, sued Tracy Carter, joint owner of ABC Taxis, which is based in Chatham and has on a long term basis provided services to Medway Council.
Both firms also supplied drivers who took children with special educational needs to and from school.
Mr Pannu claimed he was slandered when Ms Carter told a Medway Council employee with whom she had regular dealings of an incident apparently involving passengers carried in his cab, when he was allegedly arrested in connection with the suspected supply of drugs.
Sir David Eady said the slander claim must fail.
“It has long been established that slanders are not actionable without proof of special damage. None has been pleaded. There are four exceptions and the only one that is of potential relevance here is that relating to an accusation of a criminal offence punishable with imprisonment: see e.g. Gray v Jones (1939) 55 TLR 437.” 
The only exception raised as being relevant to Mr Pannu’s claim was that which related to criminal offences – but it would not suffice to cover
the case as the words complained of meant only that there were “reasonable grounds to suspect” such an offence.
In the final paragraph of the decision Sir David issued a warning about the dangers of bringing such claims. He was reminded of the salutary warning given by Mr Justice Jay in the recent case of Serafin v Malkiewicz ( EWHC 2992 (QB)), he said. He went on:
“There are clearly risks in launching too readily into this type of claim, where there are often more issues to be considered than at first meet the eye, and the uncertainty and complexity of which can sometimes be underestimated. The issues in this case were quite different from those in Serafin, and simpler to resolve, but the hurdles confronting claimants in the law of slander, qualified privilege and malice may also prove hazardous and unexpectedly tricky to negotiate. While that is true in general terms, and careful thought should always be given to the potential pitfalls before starting such a claim, it so happens that the fundamental problem here should have been relatively easy to identify. Unlike Serafin, it did not turn upon matters of conflicting evidence or the credibility of witnesses. It was a basic point of law: slander is not actionable without proof of special damage – unless it can be brought within one of the recognised exceptions.” 
Sir David added:
“I have little doubt that the claim has caused everyone a good deal of anxiety and stress, to say nothing of the cost (some of it to the public purse). Yet it could so easily have been avoided.“
The judge also held that while Ms Carter’s words were to be regarded as meaning that there were reasonable grounds to suspect that Mr Pannu had committed a drugs offence, they were protected by qualified privilege as she had a moral or social duty to pass a serious allegation of this kind to the local authority so that it could consider it and take whatever steps it deemed appropriate.
In addition, express malice, which could have overcome the privilege,
had not been demonstrated.
The judge noted that the court had also been told that Medway Council had apologised to Ms Carter for having breached its duty of confidence to her by failing to keep her anonymous in relation to the allegation about Mr Pannu, and had agreed to pay her damages.
This article originally appeared on the online subscription service Media Lawyer and is reproduced with permission and thanks.