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25 April 2013

Fair comment still comes at a cost

When a businessman voiced his opinion on planning matters by joining a planning action group which opposed the construction of two biomass power plants, he did not expect his past business record to become the subject of debate.

However, a bundle of papers was delivered anonymously to members of the planning committee. One typewritten page said ‘Please see Companies House...between him and [his] girlfriend they have dissolved over 20 companies not able to sell anyone of them and coming to Swansea to tell you how to do it’. A handwritten note stating ‘dissolved 15 companies = not able to run them’ had also been added to the bundle of papers.     

The businessman brought a claim for defamation against the managing director of the biomass company, who was shown (by way of expert evidence) to have written the notes, on the ground that the clear implication was that he was incompetent. The judge found that the words, whilst factual, were defamatory and the defamation claim could therefore continue to trial.

However, on appeal, the Court of Appeal reversed the decision of the lower court. It concluded that the words constituted ‘fair comment’ and that it would be an unlawful abuse of process to allow the businessman to proceed with his claim.

However, the Court did rule that the defendant should pay the businessman’s legal costs up until the time when the defence was served on his solicitors.

Says Matthew Brandis, partner in the litigation and dispute resolution team at B P Collins, “Although the defendant’s stance was ultimately vindicated, it came at a considerable cost. This case illustrates how important it is to make sure that public pronouncements of any kind are thought through carefully before being made.”

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