Communicated on 11 February 2016

FIFTH SECTION

Application no. 28199/15 INDEPENDENT NEWSPAPERS (IRELAND) LIMITED against Ireland lodged on 29 May 2015

STATEMENT OF FACTS

The applicant company is an Irish newspaper publisher. It is represented before the Court by Simon McAleese Solicitors, Dublin.

The circumstances of the case

The facts of the case, as submitted by the applicant, may be summarised as follows.

1. Publication

In November-December 2004, one of the applicant ’ s newspapers, The Evening Herald , published a series of articles about the awarding of a consultancy contract by a Government Department to a public relations consultant, Ms L. The articles were very critical of the manner in which the tendering procedure had been conducted, of the qualifications of Ms L, of the level of remuneration which it suggested was excessive. Also criticised were the type of work involved and the amount of work that was in fact done by Ms L. There was repeated suggestion in the articles that the Minister concerned and Ms L, who came from the same city and were personally acquainted for some years, were conducting an extra-marital affair and that this was why she had been awarded a contract.

The articles provoked political controversy, which led to an inquiry into the tendering procedure. In its report to the Taoiseach (Prime Minister), dated 24 January 2005, the inquiry found certain shortcomings in the way that the contracts had been awarded and in the monitoring and recording of the work done. However, it did not find any specific infringement of the relevant norms, guidelines or practices.

2. Defamation proceedings in the High Court

Ms L sued the applicant company for defamation. The case was heard before a jury in the High Court over several days in June 2009. In his charge to the jury, the trial judge stated as follows in relation to the question of damages:

“The amount of damages, ladies and gentlemen, is a matter for you, should you choose to award them. I can ’ t suggest a figure to you, I am not permitted to suggest a figure to you. I can ’ t give you a range of figures, I am not permitted to give you a range of figures. I can give you what help I can, and I will, in coming to an appropriate figure for damages. But, ultimately, the figure is yours.”

He explained that in an action for defamation, damages serve three functions: to afford consolation for the distress caused by the defamatory statement; to repair the harm to reputation, including business reputation; and to vindicate the person ’ s reputation. He stated that, if they wished, they could take account of Ms L ’ s standing in society and in the business community, the nature of the libel (the insinuation that she had betrayed husband and family and misused public funds), the mode and extent of publication (carried repeatedly in a widely-read daily newspaper), the absence of an apology, and the fact that the applicant company pleaded the defences of justification and fair comment throughout the trial. If the jury were to make an award, it must be appropriate and fair to both parties. The jurors must not “be overcome by feelings of generosity and give [Ms L] a ridiculously large amount of money”. An award must be “appropriate”. The trial judge continued his charge to the jury as follows:

“...[ T]hat appropriate figure must also take into consideration the Defendant. You must also be fair to the Defendant too ...[Y] ou must consider the Defendant as well because your decision must be a fair decision and must be fair to both parties. ... You must come to a figure that is an appropriate figure and that is, I fully realise, ... not an easy thing to do. I would like to be able to tell you what other figures have been given in the recent past in similar cases, but I can ’ t do that and I mustn ’ t do that. If any of you think you remember newspaper headlines over the past twelve months or so of damages awarded in cases, every case is different. Put those out of your mind completely ... It is this case and what is appropriate in this case that is important and you have to reach that decision yourself and without as much help as I would like to be able to give you, but I am not permitted to give you.”

The jury found that the articles were defamatory of Ms L. It assessed the amount of damages at 1,872,000 euros. The applicant company accepted the jury ’ s decision on the libel and later published an apology to Ms L in the same newspaper. It appealed against the level of damages, arguing that a much lower sum - 170,000 euros - would be sufficient to compensate Ms L.

3. Review of the Supreme Court

The Supreme Court gave judgment on 19 December 2014. It noted that the case did not come within the current law on defamation (the Defamation Act 2009), but had to be decided in accordance with the previous law. Under that regime, there was only limited scope to the judge to give directions to the jury as to the appropriate level of damages to be awarded. The appeal did not challenge the charge to the jury, but related solely to the amount of damages awarded. The Supreme Court rejected the applicant ’ s argument that larger libel awards should be subjected to a more searching scrutiny than had been customary in the past by the appellate courts. Nor did it accept the argument that the relevant legal test was whether a reasonable jury would have thought such an award necessary to compensate the plaintiff and to re-establish her reputation. Having reviewed the relevant domestic case-law it stated:

“If such were the test to be applied, it would remove from the jury award the “very unusual and emphatic sanctity” referred to [in previous case-law].

Consequently, while awards made by jury must, on appeal, be subject to scrutiny by the appellate court, that court is only entitled to set aside an award if it is satisfied that in all the circumstances, the award is so disproportionate to the injury suffered and wrong done that no reasonable jury would have made such an award.

Thus it is clear that while the assessment by a jury of damages for defamation is not sacrosanct it does carry considerable weight such that appellate courts have been slow to interfere with the assessments by a jury and an appellate court should only set aside such an award if the appellate court is satisfied that the award is so disproportionate to the injury suffered and wrong done that no reasonable jury would have made the award in all the circumstances of the case.”

The Supreme Court then referred to the judgment of this Court in the case Independent News and Media and Independent Newspapers Ireland Limited v. Ireland , no. 55120/00, ECHR 2005 ‑ V (extracts), observing:

“It was ... submitted that the decision of the European Court of Human Rights in Independent News and Media v. Ireland did not alter or reconfigure Irish law in respect of awards of damages in defamation actions. I agree with that submission. ... [T]he position in Irish law is that an appellate court will be slow to interfere with the verdict of a jury on the assessment of damages but nevertheless awards by juries are subject to scrutiny and if an award is so disproportionate in the circumstances of the case having regard to the respective rights of freedom of expression on the one hand and on the other hand the requirement under the Constitution to protect the good name of every citizen that no reasonable jury would have made such an award then the award will be set aside on appeal.”

The Supreme Court next examined the concept of compensatory damages in Irish law, observing that the jury had not been asked to consider other forms of damages such as aggravated, exemplary or punitive damages. However, there was a degree of overlap between compensatory damages and aggravated damages in defamation actions, so that the jury was entitled to consider, in addition to damage to reputation, other factors such as the conduct of the defendant. Its award could properly encompass an element of damages designed to compensate for those matters that could, in an appropriate case, be dealt with under a separate head of aggravated damages.

The Supreme Court then considered the applicant company ’ s argument that it should compare the high amount awarded in the High Court to awards that had been set aside as excessive in other defamation cases. It accepted that comparison with other cases might provide some assistance in assessing the gravity of the libel, but also underlined the need for caution, given the wide variety of factual circumstances of such cases and also the passage of time since previous appellate decisions. The applicant company also argued that damages for defamation should be compared to the compensation awarded in personal injury cases. The Supreme Court noted the different function of damages in the two types of case, meaning that there was no an obvious correlation between them. In defamation, the function of damages was both to compensate the injury to reputation and to vindicate the person ’ s good name. Thus the analogy between the two types of case was not useful.

The Supreme Court then set out the relevant factors for assessing damages on the facts of the case. The first was the gravity of the libel. Although it could not be described as among the gravest and most serious libels that had come before the courts, it was nonetheless a very serious one. The articles had suggested that Ms L would engage in an adulterous affair to advance her career, betraying the trust of her husband and children. The next factor was the extent of publication, which had been particularly widespread and extensive. The newspaper had conducted a sustained campaign, with eleven articles published over a two-week period, that saw Ms L go from being unknown to the public to being notorious. The third factor was the conduct of the newspaper. It had run a defence of justification that the jury had rejected. It had not offered any apology to Ms L before the verdict, which was a point the jury could have taken into account. The articles had been accompanied by photographs that had been cropped and manipulated to underline the suggestion of an intimate relationship between Ms L and the Minister. That too could have been taken into account by the jury. The next factor was the impact of the defamation on Ms L, which the Supreme Court found to be profound. The articles had greatly affected her in every aspect of her family and professional life, which was a consideration that was also relevant to the jury ’ s award. Lastly, it considered the newspaper ’ s freedom of expression. This was not an unrestricted right, but had to be balanced against the right to protection of one ’ s good name. There had to be a balancing exercise between these two constitutional rights. It followed that damages could not be so high as to vindicate the plaintiff ’ s good name but at the same time unduly restrict a newspaper ’ s freedom of expression.

The judgment continues:

“The award of damages in this case in the sum of €1, 872,000 is a very large award by any standard . ... Overall, I am satisfied that the defamation in this case was a very serious defamation. Undoubtedly, if one was to place the defamation in this case on a scale of seriousness, it would certainly be towards the higher end of the scale. A somewhat unusual feature of this case was the sustained campaign in the Evening Herald in respect of Ms. L. The consequences of it affected her in her day to day life, personally and in her business life. Her newly launched business was destroyed before it could become established. I have no doubt that from her point of view it was a very serious matter. Nevertheless, I do not think it could be classed as one of the most serious libels to come before the Courts ... [T]he award made to Ms. L in this case was one of the highest ever awards made in a case of this kind in this country. Even accepting that this case is one that comes towards the higher end of the scale, I am satisfied that the award made by the jury in this case was excessive and must be set aside.”

The Supreme Court then made its own award:

“I am conscious of the firm instructions of Ms. L. to her legal representatives that in the event that this Court came to the conclusion that the amount of the award was excessive that the Court should in those circumstances remit the matter to the High Court for assessment by a jury again. Whilst I understand those to be her instructions I am satisfied that in the context of this case it would be desirable for all parties to bring an end to the litigation between the parties and in those circumstances it seems to me that the approach to be taken by the Court should be to set aside the verdict of the jury on damages and to substitute a sum in the figure of €1,250,000 for damages.”

According to the applicant, one of the three Supreme Court judges considered that the sum of 1,000,000 euros would be appropriate. However, the judge ’ s basis for reaching this sum is not known, since his judgment was neither published nor communicated to the parties.

COMPLAINT

The applicant company complains under Article 10 of the Convention that the size of the award constituted a violation of its freedom of expression. It argues first that the interference represented by the award was not prescribed by law, since damages in defamation cases are wholly unpredictable. As a result, it is impossible for publishers to ascertain their potential liability. It further complains that there are no adequate safeguards against disproportionately large awards. Juries may set damages at whatever level they choose, and do not provide any reasoning for the sums awarded. The possibility of appeal does not remedy the problem, as appellate review is necessarily conditioned by the jury ’ s award. In the present case the Supreme Court did not give any reasons for the substitute award, which was far above any previous award in defamation or personal injury cases .

The applicant company further argues that the award against it was disproportionate. Although the Supreme Court stated that the libel in this case was not of the most serious type, the level of damages was far in excess of the previous maximum award in defamation (381,000 euros) which concerned a much more serious libel. The Supreme Court refused to draw an analogy with the awards typically made in other types of case, and did not explain how it had assessed the impact of the libel on Ms L. The unpredictability of jury awards in defamation proceedings, coupled with the size of the award in this case exerted a severe chilling effect. Careful judicial scrutiny was needed. As this had not been done by the domestic courts, it must be done by the European Court of Human Rights.

QUESTIONS TO THE PARTIES

1 . What safeguards did domestic law provide at the relevant time against disproportionately high jury awards in libel cases (see in this regard Tolstoy Miloslavsky v. the United Kingdom , judgment of 13 July 1995, Series A, no. 323, §§ 46-51 and Independent News and Media and Independent Newspapers Ireland Limited v. Ireland , no. 55120/00, § 113, ECHR 2005 ‑ V (extracts)) ?

In particular, the parties are requested to address the following matters:

(a) whether the award of damages in this case, both the quantum decided by the jury and that substituted by the appeal court, was exceptional;

(b) the precise nature of the guidance which, at the relevant time, could be given by a trial judge to jurors concerning the level of award to be made in libel cases;

(c) the precise legal basis and criteria for the review of a jury award in a libel case by the appeal court at the relevant time.

2 . Could the requirements of Article 10, as elaborated in the above-cited Tolstoy Miloslavsky and Independent Newspapers judgments, be fulfilled by guidance given by a trial judge and the possibility of a review on appeal of the damages ’ award of the jury?

3 . Under the regime in force prior to the Defamation Act, 2009, how many libel awards were appealed to the Supreme Court and, following its establishment, the Court of Appeal?

In how many of the cases in which the award was appealed did the appeal court (a) refer the case back for retrial on the amount of the award or (b) substitute its own award for that of the jury?

In those cases was the award increased or decreased by the jury in the course of the retrial or by the appellate court when substituting its own award? In the case of substitution, please explain the reasoning of the appeal court for the new award.