The Guardian has scored an early victory in its libel battle with Tesco as the newspaper was told in the High Court that it could use new evidence of the supermarket giant’s tax avoidance schemes in Europe.
In a preliminary hearing yesterday, Mr Justice Eady ruled that the Tesco’s corporation tax schemes in Switzerland and Luxembourg, first reveled in Private Eye, could be used in the forthcoming libel trial against the Guardian.
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Guardian investigations editor David Leigh, who is coordinating the paper’s response, wrote in today’s Guardian that both schemes “are alledged to have avoided up to £30m a year in UK tax on Tesco profits”.
Tesco is suing the Guardian over allegations that it avoided corporation tax of £1bn through a complex network of offshore banks and holdings. However, the paper has admitted that that figure was wrong and has apologised several times for and made an official offer of amends – to print a prominent correction and pay damages – which Tesco has so far declined to accept or refuse the offer as it moves towards a full libel trial.
The paper still asserts that Tesco avoided between £85m and £95m in stamp duty land tax on its property deals.
Under the Defamation Act 1996, claimants must either accept or refuse an offer of amends, and Eady gave Tesco until 15 September to decide whether to accept the Guardian’s offer of amends. Defendants can normally expect to pay a much lowered amount in damages after making an offer of amends, sometimes half, but judges will consider how fast the offer was made after publication.
Eady also put a stay on claims that the paper and editor-in-chief Alan Rusbridger maliciously fabricated facts about Tesco’s tax avoidance.
Tesco were refused permission to appeal Eady’s rulings and costs were awarded against it.
Tesco said in a statement: ‘Yesterday’s hearing was just an early stage in the court process. The merits of Tesco’s case have yet to be heard and the full trial will not take place until next year. Unfortunately, the fact remains that the Guardian still has a serious case to answer and the paper has yet to provide us with an appropriate apology.”