The ridiculously high cost of defamation actions has been highlighted by an action taken by Sir Lenox Hewitt against a Queensland newspaper over an article in 1992.
The action highlights the pressing need for both reform of the law and reform of the procedures to ensure defamation law does what it is supposed to: balance freedom of speech against rights to reputation and to remedy unjustified attacks on reputation. At present the law does neither. As the Hewitt case illustrates, the defamation jurisdiction is a lawyer’s field day with legal costs out of all proportion to the grievances under dispute.
Sir Lenox was awarded $80,500 for what was a significant defamation for which the newspaper refused to apologise. It erred in saying that Sir Lenox faced criminal charges over an unpaid credit card debt incurred while he was a non-executive director of Christopher Skase’s Qintex Pty Ltd. In fact it was a mere civil dispute.
None the less, $80,500 is an absurdly large amount of money when compared with compensation cases where people sustain real physical injury. As it happens, Sir Lenox enjoys a good reputation irrespective of one item in a newspaper.
The courts should award corrections — quickly and cheaply. Instead, there was protracted litigation. Sir Lenox won and was awarded costs. His lawyers presented a bill for $187,249. Presumably the newspaper’s costs were a similar amount, probably more. So we have about half a million dollars worth of costs, damages and taxpayer-provided court running costs to argue over a few words in a newspaper. Most of these costs, of course, are ultimately borne by the community at large as the newspaper inevitably passes most of them on in increased advertising costs (borne by consumers) and increased cover prices.
This size of cost is not unusual in defamation actions. Indeed many run much higher. And these cases are clogging the courts while justice is being denied people with grievances that go beyond mere words — personal injuries at work and on the road, broken contracts, criminal cases awaiting trial and so on.
Sure, Sir Lenox had a grievance, but it should not take so much money and court time to resolve. The matter of costs is still being argued about. And then there will be the costs associated with the argument about costs. It is Dickensian.
Several things could be done to put a stop to it. Damages (other than proven financial damage) could be capped to about $10,000. This alone would cause big-fee-charging lawyers to desert the field. Instead of big damages courts should be able to order corrections. Cases should be heard in lower courts. The wide test of whether the publication would lower the reputation of the plaintiff in the eyes of right-thinking people should be replaced with a much narrower test of whether the publication accused the plaintiff of criminal or immoral conduct, so that criticism of people’s job performance would be excluded from defamation. (Sir Lenox would still have his action on this test.)
In these days of huge information flows it is out of proportion to deal with complaints that flow from it in such a ridiculously costly way.
And in the meantime, the media should be more willing to correct generously when they are wrong so that the public and lawmakers would become more favourably disposed to freer defamation laws.