Excessive libel awards

In January 1999, The Mirror published an article about Victor Kiam, who famously declared that he liked his Remington shaver so much that he bought the company.

The article focused on his cigarette lighter business, Ronson, which it claimed was incurring escalating losses and could be put into receivership at any time. Kiam, the article claimed, had had enough and was thinking of pulling the plug.

Kiam successfully sued The Mirror for libel. At trial, the jury awarded damages of £105,000, despite the judge having indicated that an award of more than £75,000 to £80,000 might be excessive.

The Mirror appealed against the award, asking the Court of Appeal to invoke the right it has had since the early Nineties to substitute its own award when a jury’s award is excessive.

In some early decisions, the Court of Appeal showed that it was prepared to intervene, reducing the awards made to Teresa Gorman from £150,000 to £50,000 and to Sir Elton John from £350,000 to £75,000.

However, on 28 January, the Court of Appeal rejected The Mirror’s appeal. In its judgment, it stated that it would be wrong to substitute the award it would have made in place of the jury’s award. To do so would usurp the function of the jury who had heard all the evidence.

The correct test is whether a reasonable jury could have thought the award necessary to compensate Kiam and to re-establish his reputation. The court should interfere only if the award substantially exceeded the most a jury could reasonably have made.

The Court of Appeal went on to state that, even where an award is clearly inappropriate, it should not simply substitute it with an award which it considers fair.

Instead, it should have regard to the jury’s intent and make the highest award which the jury could reasonably have thought necessary.

Many in the media will be concerned by the Court of Appeal’s approach. Defendants are likely to think hard before appealing against a jury’s award, even where it significantly exceeds the guidance given by the trial judge.

There has recently been a creeping rise in libel awards, driven in part by increases in general damages for personal injury. The Court of Appeal decision in the Kiam case makes clear that there is plenty of scope for awards of well over £100,000 to be made in serious cases.

David Attfield is a solicitor in the defamation group of Lovells

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