Defamation & Malicious Falsehood - discussing the Peter Cruddas case - part 3

26 March 2015

In 2012 Peter Cruddas, former Conservative Party co-treasurer, commenced proceedings against the Sunday Times for defamation and malicious falsehood following the publication of a series of articles about him.

The meaning of the words complained of were determined as a preliminary issue in 2013 and the natural and ordinary meanings were found to be as Mr Cruddas had alleged (see my previous blog Defamation & Malicious Falsehood – discussing the Peter Cruddas case – part 1).

On 31 July 2013, Tugenhudt J handed down his final judgment finding the articles to be both libellous and to contain malicious falsehoods. The Sunday Times was ordered to pay £180,000 in libel damages (including £15,000 for aggravated damages) and a costs order was made for £500,000 to be paid on account by 14 August 2013.  No separate damages award was made in respect of the claim for malicious falsehood on the basis that Mr Cruddas was not entiled to recover twice for the same damage (see my previous blog Defamation & Malicious Falsehood - discussing the Peter Cruddas case - part 2).

The Sunday Times appealed Tugenhudt’s judgment and last week the Court of Appeal reduced the 180,000 libel award to 50,000 and ordered Mr Cruddas to repay the difference plus interest by the end of the month. The Court of Appeal found that the articles were substantially true in the allegation of cash for access to the Prime Minister and other senior ministers. Lord Justice Jackson said “Although large scale donors have direct access to senior ministers on social occasions, it is inappropriate, unacceptable and wrong for the donors to use that access to gain (a) confidential information, (b) enhanced influence over policy-making or (c) unfair commercial advantage. It is also inappropriate, unacceptable and wrong for senior ministers to allow that to happen.”

The Court of Appeal rejected the argument that Mr Cruddas should nonetheless succeed in malicious falsehood in relation to this allegation because the journalists realised that some cynical readers would understand the articles to mean that Mr Cruddas was proposing criminal bribes, even though the articles did not mean that and the journalists knew the articles did not mean that. This argument was available because the single meaning rule does to apply to a claim of malicious falsehood (Ajinomoto Sweeteners Europe SAS v ASDA Stores Ltd [2010] EWCA Civ 609). Lord Justice Jackson said “If the claimant succeeds on his claim for malicious falsehood, it would greatly expand the ambit of that tort. A defendant should only be liable for malicious falsehood if the falsehood represents one of the possible correct meanings of the defendant’s words and the defendant intended to convey that falsehood. The Court of Appeal’s decision in Ajinomoto does not expand the tort of malicious falsehood any wider than that” .

However, the Court of Appeal upheld Tugenhudt’s finding of libel and malicious falsehood against the Sunday Times over claims that Mr Cruddas offered cash for access even though he knew that the money was to come from Middle Eastern investors in a Liechtenstein fund (in breach of the ban under UK electoral law) and that he was happy that the foreign donors should use deceptive devices, such as creating an artificial UK company to donate the money or using UK employees as conduits, so that the true source of the donation would be concealed.

The Court of Appeal’s decision rested primarily on a different analysis of what was said on the tape recordings to that of the trial judge as opposed to any significant legal issue. It is hard to see how either party can claim the moral high ground in circumstances whereby Mr Cruddas’ conduct was found to be “unacceptable, inappropriate and wrong” in the allegation of cash for access and the journalists at the Sunday Times had acted maliciously in making the other allegations. Both parties are also substantially out of pocket with Mr Cruddas ordered to pay the Sunday Times two thirds of their costs of the appeal with a sum of £150,000 payable on account and the Sunday Times to pay Mr Cruddas fifty percent of his costs at first instance on the standard basis (said to be around £1,000,000).  Mr Cruddas was refused permission to appeal to the Supreme Court.

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