Tesco, The Guardian, and the thorny issue of responsibility

Its title may sound mundane, but Tesco Stores Ltd v Guardian News & Media Ltd and Alan Rusbridger, looks set to raise fundamental questions about free speech and protection of reputation.

It comes as the multinational retailer also pursues libel claims in Thailand against two writers and a former Thai MP over criticism of Tesco Lotus’s expansion there.

Tesco’s claim against The Guardian and its editor relates to two investigative reports, a leader column, and a podcast in February this year regarding alleged (but strenuously denied) tax avoidance in connection with the sale and leaseback of properties.

Tesco alleges the coverage, which accused it of avoiding corporation tax using offshore arrangements, was plain wrong and damaged the company’s reputation by inaccurately portraying it as morally irresponsible.

The claim is for damages and an injunction for libel and – unusually – malicious falsehood. It alleges parts of the coverage were false and that, in view of the company’s clear rebuttals, the publications were malicious because the journalists either ‘well knew’the tax allegations were false, or had ‘an utterly reckless disregard for their truth or falsity”.

The paper is likely to assert the coverage is protected by common law qualified privilege on the basis it is responsible journalism in the public interest.

The complexities of tax law form the context of the Tesco case.

Tesco claims, for example, that following an email from the retailer’s executive director of corporate and legal affairs, Lucy Neville-Rolfe, to the paper’s editor in December, which apparently contained denials of the alleged tax avoidance and clarification that the tax arrangements were unobjectionable, there was ‘no room whatsoever’for any belief that there was any avoidance of corporation tax by Tesco as was being alleged.

The email added: ‘There really is no story here and I would urge you to look elsewhere for genuine examples of businesses that pay little corporation tax rather than pursuing a leading British business that paid in excess of £1bn in taxes last year.”

For its part, The Guardian has issued a statement saying its reporting raised legitimate inquiries into the company’s tax affairs and the litigation could ‘chill public debate”.

In the statement, The Guardian claimed that despite putting a series of questions to Tesco pre-publication, it was not given the full explanation until post-publication.

It is understood the paper offered Tesco a right of reply column with a front page trailer, but it opted for court action.

If nothing else, the Guardian case may provide a useful opportunity for courts to revisit the thorny topic of ‘responsible journalism’and pronounce which side of the line the paper’s coverage falls in the liberal climate of qualified privilege.

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