How the British courts bankrupt everybody involved in defamation
I was mean about lawyers last week and was planning to lay off them for a while, but this is important. Non-Brits often struggle to understand why it is that journalists are so terrified of libel proceedings in the U.K. Britain is a democracy. The defamation laws aren’t that much more fearsome than in other European countries, and in fact they’re less fearsome than in some.
Now take the case of journalist Carole Cadwalladr. She wrote and spoke widely about businessman Arron Banks’ support for Brexit and became a hate figure for many on the Leave side as a result. She is a friend of mine, and, in my opinion, much of the criticism of her has been viciously misogynistic and grotesquely disproportionate, but I’m going to try to analyze this dispassionately, so please bear with me. Banks felt that Cadwalladr’s reporting about him was unfair and sued her for defamation, as is his right. After a court initially ruled in her favor, an appeal court found in Banks’ favor (in relation to a TED talk), and she now has to pay 35,000 pounds (about $40,000) in damages. That’s a lot of money, but it’s not terrifying.
Then came the costs.
- “The Court of Appeal has ordered that Carole Cadwalladr must pay 60% of Arron Banks’ legal fees to the tune of 1,242,634 pounds. Having already apologized and coughed up 35,000 pounds in damages, the Court has today ruled she must now find another couple of million down the back of the sofa before the end of the month,” boasted the right-wing blog Guido Fawkes last week.
So, what has happened here? Cadwalladr defamed Banks and caused harm to his reputation, damage assessed by a court to be worth 35,000 pounds. You may agree or disagree with the judgment, and reasonable people can do both, but I don’t think anyone would accuse the judges of having done anything other than their jobs. And I certainly wouldn’t criticize Banks, who was holidaying in Italy, for saying he would celebrate this ruling “like it’s the last of Rome.” I’m sure this has been a stressful time for him, too.
But to get to this point, the parties have had to spend hundreds of thousands of pounds on lawyers, in an epic game of legal chicken, which Cadwalladar lost. So she is on the hook for most of his fees as well as her own. And two million pounds is terrifying. That is a warning to every journalist in the country to leave contentious subjects like the influence of big money on politics well alone. If you get it wrong, and you offend someone prepared to take you on, your life as you know it is over. Cadwalladr managed to raise a lot of money from crowdfunding, but not — as it turned out — nearly enough. Not even close.
- “These exorbitant costs — ordered despite the court’s recognition that Carole Cadwalladr’s work was at the time of publication covered by a public interest defense — send a chilling message to investigative journalists everywhere,” said Fiona O’Brien, the U.K. bureau director at Reporters Without Borders.
- “The decision will have a profound chilling effect on critical journalism across the world,” said the European Centre for Press and Media Freedom.
A group of media organizations last year put together a model law to prevent the abuse of defamation cases to intimidate journalists. I hope everyone can look at what has happened to Cadwalladr and recognize this is a sign of a system that is broken.
It is simply not justice for lawyers to make millions from a proceeding, when the defamed man makes a mere 35,000 pounds. If you take into account the proportion of the legal fees Banks will have to pay, he’s actually on the hook almost 700,000 pounds out of pocket. It’s easy to speculate about why he persisted with a proceeding that would end up costing him so much money, but it doesn’t take away from the point that it shouldn’t cost anyone that much in the first place.
The viciously polarized rhetoric around Brexit means that there is much boasting about this result, but the real message for me is that defamation proceedings need to be simplified, streamlined and made vastly cheaper. That would empower journalists like Cadwalladr to do more work,and it would empower people like Banks who feel they have been defamed by journalists to bring cases. It would make the whole process quicker and fairer. If justice is expensive, it’s inaccessible, and if it’s inaccessible, it’s unjust.
A century and a half ago, Charles Dickens satirized the law courts so viciously in “Bleak House” you’d think nothing could have survived.
- “It’s about nothing but Costs now. We are always appearing, and disappearing, and swearing, and interrogating, and filing, and cross-filing, and arguing, and sealing, and motioning, and referring, and reporting, and revolving about the Lord Chancellor and all his satellites, and equitably waltzing ourselves off to dusty death, about costs. That’s the great question. All the rest, by some extraordinary means, has melted away,” said one member of Dickens’ Jarndyce family.
And yet here we are. There is a saying that if you want to change the world, you need to find a way for lawyers to make money out of it. We need to turn that around: If we want to free the press, we need to find a way to stop lawyers from doing so.
On a side note: Banks sued Cadwalladr personally, but he was suing her for a speech she made at the TED conference in Vancouver. So, here’s an idea worth spreading: If you invite someone to come and speak at your achingly fashionable event, and you distribute the video of their speech on your web site, and then they get sued for it, you should have their back. If your whole shtick is that you spread ideas, and you invite someone to come and share an idea for you to spread, you don’t get to hide under the table if the idea spreads. So why isn’t TED helping with her costs?
- “The court of appeal found for Banks on one point only: It ruled that when the police concluded its investigation into him a year after I gave the talk, the public interest defense fell away. The court ruled that a notional 100,000 people in the UK saw the talk after this point and it held me liable for those views even though it acknowledged that I did not control TED’s website,” noted Cadwalladr in an update to her crowdfund, in which she confirmed she would be seeking permission to take the case to the Supreme Court.
INTERNATIONAL COURTS FOR AN INTERNATIONAL CRIME?
Speaking of legal proceedings, I wanted to write about something that is getting a bit of attention these days: the idea of an International Anti-Corruption Court. Moldovan President Maia Sandu — who knows a thing or two about the difficulties of tackling corruption — is the latest international leader to back the idea.
- “For situations where reforms move slowly, the processes are not always the right ones, it takes time to build a strong and independent court or prosecutor’s office. I think that in cases of big corruption it is good to have an Anti-Corruption Court at the international level where we can go with evidence and see the big corrupt people punished,” she said, back in March.
Her name is now added to a long and distinguished list of statespeople — including former presidents, ministers and U.N. commissioners — who support the idea, and it’s the policy favored by the governments of Canada and the Netherlands, among others. This is impressive for an idea that was first put forward around a decade ago by a retired American judge, Mark Wolf. He correctly analyzed the flaws in the global efforts against corruption, identifying that it is too easy for people to hide from justice behind national borders while their money flows seamlessly across them.
- “Staffed by elite investigators and prosecutors as well as impartial judges, an IACC would have the potential to erode the widespread culture of impunity, contribute to creating conditions conducive to the democratic election of honest officials in countries which have long histories of grand corruption, and honor the courageous efforts of the many people, particularly young people, who are increasingly exposing and opposing corruption at great personal peril,” he wrote.
An analysis of the state of the debate can be found here. I am obviously in favor of efforts to tackle corruption. The horror in Ukraine has revealed more clearly what has previously been exposed by crises in Angola, Nigeria, Venezuela, Egypt, Afghanistan and dozens of other countries: Corruption helps bad people, harms good people and makes every problem worse than it already is. And there is a parallel here in the discussion of tax policy. Tax justice advocates are increasingly despairing that rich countries will ever agree to do the right thing and fairly distribute revenues around the world and want the United Nations to step in to create a genuinely equitable international forum.
However, as you may be able to tell, I am about to introduce a “but” to the debate. I fear that the IACC is one of those times when we need to deploy the well-known quote from the Sage of Baltimore: “There is always a well-known solution to every human problem – neat, plausible, and wrong.”
It is true that the essence of kleptocracy is its transnational nature. Corruption became supercharged once the corrupt were able to game the globalizing financial system — they used their control of their own countries to frustrate foreign scrutiny and they use foreign-provided secrecy to frustrate domestic scrutiny — and they’ve stolen more than any medieval bishop or prince could have conceivably dreamed of. Anyone who can afford to can thus live by different rules than the rest of us, which erodes trust in society, politics and business. It seems logical that a transnational problem requires an international solution, but I’m not sure that an IACC is that solution.
Once you strip away the bewildering variety of jurisdictions that provide corporate structures to hide financial movements behind, kleptocracy is actually quite simple. Money is stolen in poor countries and is spent in a relatively small number of rich countries: the U.S., the U.K., Canada, Australia, France, Spain, the UAE, a few others. So, if those countries took the problem seriously and prevented that money from entering their economies, the problem would be largely solved.
And, if you look at the secrecy jurisdictions, often the problem could be solved closer to home than it looks. Those shipping registries hiding ownership of the ghost fleets of tankers moving Russian oil might bear the flags of Saint Kitts and Nevis or Liberia, but the actual registries are based in the U.K. and U.S. The U.K. could shut down its shoal of tax havens tomorrow if it wanted to.
It’s great that the Canadians and the Dutch want to take international corruption seriously, but they should start by cleaning up their own financial systems, which are major waypoints in the global movement of dirty money. We already have laws against corruption, and we already have courts. I want to see us using those first before seeing whether we need new ones.
WHAT I’M READING
It is almost time for the literary world to descend on my hometown for the Hay Festival, which is the world’s finest festival of words and ideas. I grew up thinking it was entirely normal for a small town to have U.S. presidents, Nobel prize winners, poets, playwrights, novelists and more turning up to talk to us each May, but now I appreciate what a privilege it is. You should come. Drop me a line if you do.
Anyway, I will be asking some questions of Marianna Mazzucato and Rosie Collington, whose book, “The Big Con,” skewers the global consulting industry forcefully, forensically and — you’d hope — terminally. I really enjoyed reading it.