What was the background?
The defendant was employed as a warehouse manager by the claimant, a cosmetics business, and was dismissed for gross misconduct following six statements he was alleged to have made in Korean at a closed business meeting of approximately twenty senior executives and team leaders. These were:
- “Does this company always use such foul language during meetings?”
- “What exactly do the people at head office do?”
- “Everyone should just quit. Why even work at this company?”
- “This person doesn’t know marketing well”
- “This person knows nothing about marketing”
- “You are all the same kind of people”
Following his dismissal, the corporate claimant brought a defamation claim against its former employee arguing that his comments were defamatory and had caused the claimant serious harm and serious financial loss, as is required by s.1(2) of the Defamation Act 2013.
The defendant applied for strike out/summary judgment of the claimant’s claim on the basis it had no real prospect of succeeding, advancing three grounds:
- The statements made by the defendant did not refer to the claimant;
- The statements were not defamatory of the claimant; and
- The claimant had no real prospect of establishing at trial that it had suffered serious harm to its reputation (in the form of serious financial loss).
What did the court decide?
Of the six statements alleged to have been made by the defendant, Master Sullivan considered that only 1. and 2. in fact referred to the claimant. The remaining statements made references to “people” and “person” and they were not sufficient to establish that they referred to the company.
It was then left to be determined whether statements 1. and 2. were defamatory. Following the well-known principles laid out in Koutsogiannis v The Random House Group Ltd [2019] EWHC 48 (QB), Master Sullivan concluded that the statements fell into a category of discourteous behaviour that was not sufficiently serious to be considered defamatory, effectively striking out the claim in its entirety.
On serious harm and financial loss, Master Sullivan recognised there was a cultural dimension to the case which meant that the claimant’s case was, at best, arguable. The claimant submitted that the allegations had a greater impact because they had been made into a closely knit Korean-speaking UK business community where information tends to percolate. However, the relevance of this argument fell away once it was determined that the statements were not defamatory.
What are the practical implications of this case?
There are a number of practical learnings from this case. Primarily, it provides guidance on the way courts will apply defamation principles to statements made about companies in the workplace.
On reference, to be defamatory of a company, it is not essential for a statement to explicitly name that company. In certain circumstances, words can defame both a company officer and the company itself, particularly if the individual is closely connected with the company.
However, as was established in Undre v Harrow LBC [2016] EWHC 931 (QB), where statements made reflect primarily upon human beings, courts will examine carefully a contention that they are damaging to a company’s business reputation.
The fact that reference was only established for statements a) and c) suggests that it will be harder for companies to bring defamation claims in response to statements where they are not explicitly named.
Master Sullivan was also persuaded by the defendant’s argument, drawn from Lonzim PLC v Sprague [2009] EWHC 2828 (QB), that allowing the case to continue would unjustly interfere with the defendant’s right to free expression under Article 10. She warned against the policy implications and surge in cases that would arise if disagreements between employers and employees were to be dealt with through defamation actions.
Her approach indicates that courts will consider the public interest very carefully when considering whether statements made in the workplace constitute defamation and suggests such disputes are better left in the employment space.
Mr Kwangho Shin’s legal team comprised Dhillon Purnell-Mullick (Solicitor), Lucy Agombar (Trainee Solicitor) and Alex Cochrane (Partner) of Edwards Duthie Shamash Solicitors, who instructed Hayley Webster of Matrix Chambers.