THE QUEST FOR A FAIR BAL­ANCE

There’s a high so­cial cost in the clash be­tween free speech and defama­tion law

The Weekend Australian - - INQUIRER - CHRIS MER­RITT LE­GAL AF­FAIRS ED­I­TOR

The push by the states to re­form defama­tion law is about much more than free­dom of speech. It is about end­ing a sys­tem of in­jus­tice in which the hurt feel­ings of movie stars are worth more than the body parts of or­di­nary peo­ple.

Con­sider what hap­pened to ac­tress Rebel Wil­son. Had she lost a leg af­ter an ac­ci­dent, one of Slater + Gor­don’s top pub­lic li­a­bil­ity lawyers says that sort of in­jury might re­sult in com­pen­sa­tion in Vic­to­ria of be­tween $400,000 and $500,000 for pain and suf­fer­ing.

In­stead of caus­ing an am­pu­ta­tion, Bauer Me­dia dam­aged Wil­son’s rep­u­ta­tion — and that, if the size of the pay­out is any guide, is far more im­por­tant. Wil­son pock­eted $600,000, which is at least $100,000 more than the likely pay­out to an am­putee.

Her pay­out is more than twice as much as the $250,000 that a Mel­bourne fac­tory worker might ex­pect for the loss of an eye, and is roughly in line with what or­di­nary peo­ple might re­ceive if they lost a hand and could never work again.

Those es­ti­mates do not come from the pub­lish­ers and broad­cast­ers who have been urg­ing the na­tion’s gov­ern­ments to re­form defama­tion law. They come from Slater + Gor­don’s top pub­lic li­a­bil­ity lawyer, Bar­rie Wool­la­cott, who is ex­as­per­ated by what he sees as an un­just sys­tem.

“But I’ve been do­ing this for so long that I am no longer ap­palled; I’m just ac­cept­ing that it is very un­fair,” Wool­la­cott says. He cau­tions that pay­outs for per­sonal in­juries vary across the na­tion, but he says some of his clients have been shocked when tragic cir­cum­stances have forced them to come to terms with the dis­par­ity be­tween com­pen­sa­tion for defama­tion and for phys­i­cal in­juries.

This is not what the na­tion’s gov­ern­ments in­tended when they put in place uni­form defama­tion laws in 2005. These laws, which op­er­ate in every state and ter­ri­tory, were in­tended to achieve the op­po­site: to keep defama­tion pay­outs for rep­u­ta­tional dam­age, re­ferred to by lawyers as noneco­nomic losses, pro­por­tion­ate to per­sonal in­jury com­pen­sa­tion.

A 2004 re­port to the na­tion’s at­tor­neys-gen­eral spelled this out: “Gen­eral dam­ages for non-eco­nomic loss should be no greater than gen­eral dam­ages avail­able in per­sonal in­jury ac­tions.”

But the re­verse has hap­pened. Just this week, West In­dian crick­eter Chris Gayle won a $300,000 defama­tion pay­out af­ter be­ing ac­cused in print of ex­pos­ing his gen­i­tals to a woman in a change room.

This means the pay­out for Gayle’s hurt feel­ings does bear some pro­por­tion to per­sonal in­jury awards — but not in a good way. It is roughly in line with the $200,000 to $300,000 that Wool­la­cott es­ti­mates would be paid to those who are per­ma­nently im­paired by back in­juries that fail to re­spond to surgery.

The rea­son for the dis­par­ity is that dam­ages for per­sonal in­juries are still af­fected by re­stric­tions, known as tort re­form, that were put in place af­ter 2002 to ease the cost bur­den on in­sur­ers and pub­lic in­sti­tu­tions caused by a boom in this form of lit­i­ga­tion. But when it comes to defama­tion, the courts have found ways of sidestep­ping sim­i­lar lim­its that capped pay­outs in 2005.

The ques­tion now is whether defama­tion needs its own wave of tort re­form.

Dur­ing the past 13 years, the play­ing field also has been skewed in favour of plain­tiffs. This form of lit­i­ga­tion is in­creas­ingly plagued by fo­rum shop­ping and in­ef­fec­tive de­fences that have con­trib­uted to a surge in triv­ial claims gen­er­ated by neigh­bour­hood dis­putes and so­cial me­dia.

Af­ter be­ing con­fronted with the risk of al­most un­lim­ited fi­nan­cial li­a­bil­ity, main­stream me­dia or­gan­i­sa­tions have put aside their dif­fer­ences and are push­ing for changes that in­clude restor­ing the cap on dam­ages.

Gov­ern­ments have taken up the chal­lenge and es­tab­lished a work­ing party of of­fi­cials from every ju­ris­dic­tion that is con­duct­ing a ma­jor re­view of defama­tion law. The goal is a new tranche of re­forms — the first since 2005 — that could af­fect laws in place around the na­tion.

The project is be­ing led by NSW At­tor­ney-Gen­eral Mark Speak­man and that state’s So­lic­i­tor-Gen­eral Michael Sexton SC is ex­pected to play a key role in shap­ing how the next gen­er­a­tion of defama­tion laws bal­ance two fun­da­men­tal rights: free­dom of speech and per­sonal rep­u­ta­tion.

It comes as re­cent re­search has found that this form of lit­i­ga­tion is no longer merely the bane of the me­dia. Its plain­tiff-friendly na­ture ap­pears to have made it an in­creas­ingly pop­u­lar weapon in neigh­bour­hood dis­putes.

“We are at, or ap­proach­ing, a turn­ing point, an in­flec­tive mo­ment wherein pri­vate in­di­vid­u­als are in­creas­ingly su­ing each other, and Google and the own­ers of Facebook pages are sued as the ‘pub­lish­ers’ of al­leged defam­a­tory con­tent,” says a re­port on dig­i­tal defama­tion pre­pared by the Cen­tre for Me­dia in Tran­si­tion at the Uni­ver­sity of Tech­nol­ogy Syd­ney.

Com­pared with a decade ago, this study found that the over­all num­ber of cases was sim­i­lar but the pro­por­tion of dig­i­tal defama­tion claims had risen from 17.2 per cent in 2007 to 53.3 per cent last year.

The UTS study also con­tra­dicts the com­mon as­sump­tion that pub­lic fig­ures are the main users of defama­tion law. It found it was be­com­ing more com­mon for pri­vate in­di­vid­u­als to be plain­tiffs and de­fen­dants.

That study found that in the four years to last year, more defama­tion cases were de­cided in NSW than in all other ju­ris­dic­tions com­bined. The tally for NSW was 95 while the next busiest defama­tion ju­ris­dic­tions were Queens­land and Vic­to­ria, where just 21 cases were fi­nalised.

But as more peo­ple sue each other in­stead of the me­dia, the UTS study found the pro­por­tion of cases in which the me­dia com­pa­nies were de­fen­dants has fallen sig­nif­i­cantly — from 28.6 per cent in 2013 to 16.7 per cent last year. It says the pub­lic space is now a much big­ger and wilder place and me­dia com­pa­nies were in­volved in just one-quar­ter of the mat­ters cov­ered by the study.

As the eco­nomic base of the me­dia is chang­ing, the re­duced pro­por­tion of claims against the me­dia is cold com­fort for pub­lish­ers and broad­cast­ers when the size of the claims con­fronting them has boomed.

Rebel Wil­son orig­i­nally had been awarded $4.7 mil­lion be­fore it was slashed on ap­peal; Toowoomba’s Wag­ner broth­ers won $3.7m over broad­casts by Alan Jones; ac­tor Craig McLachlan wants $6.5m from the ABC and Fair­fax; and Hol­ly­wood star Ge­of­frey Rush is seek­ing mil­lions from The Daily Tele­graph (pub­lished by News Corp Aus­tralia, which also pub­lishes The Week­end Aus­tralian).

This helps ex­plain why some of the in­dus­try’s strong­est com­peti­tors have made com­mon cause to pros­e­cute the case for re­form. It also helps ex­plain why James Chessell, ex­ec­u­tive ed­i­tor of The Syd­ney Morn­ing Her­ald and The Age, made him­self avail- able at 7am yes­ter­day to talk to The Aus­tralian.

That the lit­i­ga­tion risk now ex­tends into the gen­eral com­mu­nity as well as the me­dia also may ex­plain why La­bor’s Mark Drey­fus, who could be at­tor­ney-gen­eral af­ter next year’s fed­eral elec­tion, has em­braced parts of the re­form agenda. He has promised to have more to say on this sub­ject.

At­tor­ney-Gen­eral Chris­tian Porter also ap­pears to be lean­ing to­wards more pro­ce­dural con­sis­tency — a move that could put an end to fo­rum shop­ping and stymie plain­tiffs who sue in the Fed­eral Court to avoid ju­ries in state Supreme Courts.

Chessell ar­gues that the push for re­form is not aimed at “let­ting jour­nal­ists off the hook”, even though some may see it that way.

“The prob­lem is that these laws were for­mu­lated a long time ago. Facebook had just started and other forms of so­cial me­dia were not in com­mon use and they did not an­tic­i­pate the tech­no­log­i­cal changes that were to sweep through the me­dia in­dus­try.

“The se­cond is­sue is the ap­pli­ca­tion of those laws has be­come, in my view, rea­son­ably one-sided.

“It has got to the point where it is very dif­fi­cult for me­dia or­gan­i­sa­tions, whether it is the ABC, whether it is News Corp, whether it is The Syd­ney Morn­ing Her­ald and The Age, to pur­sue se­ri­ous, pub­lic in­ter­est jour­nal­ism without the risk of be­ing sued in a vex­a­tious way,” Chessell says.

In his view, the risk of crip­pling dam­ages is forc­ing me­dia com­pa­nies to spend more of their bud­gets on le­gal ser­vices at a time when thou­sands of jobs for jour­nal­ists have dis­ap­peared.

“You have a fixed bud­get … and if your le­gal bud­get is tak­ing up more and more of it, it’s hard to spend that money on journos,” Chessell says.

But the risk of lit­i­ga­tion also has trig­gered fears of a more in­sid­i­ous dan­ger when ed­i­to­rial teams are de­cid­ing where to al­lo­cate re­porters.

“As an ed­i­to­rial team, you sit there and think: what is the fi­nan­cial im­pact of this? That’s a re­ally dan­ger­ous thing be­cause the temp­ta­tion some­times is that maybe this in­ves­ti­ga­tion, or this sub­ject, is very risky from a le­gal point of view.

“We have a cou­ple of on­go­ing cases, so per­haps we don’t pur­sue that. It hasn’t got to that point, but it is cer­tainly some­thing that sits in the back of peo­ple’s minds and has a di­rect im­pact on the higher-risk calls that peo­ple make when they are edit­ing mast­heads,” Chessell adds.

Be­cause the defama­tion acts take the form of uni­form state and ter­ri­tory leg­is­la­tion, the di­rect re­spon­si­bil­ity of the fed­eral gov­ern­ment might be lim­ited to the pro­posed in­tro­duc­tion of jury tri­als in the Fed­eral Court to elim­i­nate in­con­sis­tency with some state Supreme Courts.

Porter seems at­tracted to that idea. He says one of the pur­poses of the re­view is to “al­low for a process which has some hope of pro­duc­ing, if not uni­for­mity, far more con­sis­tent and aligned rules in this area across Aus­tralia”.

The re­view’s terms of ref­er­ence have given the of­fi­cials un­der­tak­ing this work re­spon­si­bil­ity for en­sur­ing their rec­om­men­da­tions do not place un­rea­son­able lim­its on free­dom of ex­pres­sion — and par­tic­u­larly on the pub­li­ca­tion and dis­cus­sion of mat­ters of pub­lic in­ter­est and im­por­tance.

This seems broad enough to cover the pro­pos­als from the

‘It has got to the point where it is very dif­fi­cult for me­dia or­gan­i­sa­tions … to pur­sue se­ri­ous, pub­lic in­ter­est jour­nal­ism without the risk of be­ing sued in a vex­a­tious way’ JAMES CHESSELL EX­EC­U­TIVE ED­I­TOR, THE SYD­NEY MORN­ING HER­ALD AND THE AGE

me­dia coali­tion. But if the re­view goes awry, re­spon­si­bil­ity for keep­ing the re­form process on track may again fall to the com­mon­wealth, as it did when for­mer at­tor­ney-gen­eral Philip Rud­dock threat­ened to in­tro­duce a fed­eral defama­tion act if the states failed to reach agree­ment on uni­for­mity.

Rud­dock says he took le­gal ad­vice and found that the fed­eral gov­ern­ment had the con­sti­tu­tional power to “cover the field” with a fed­eral defama­tion act that would cover all pub­li­ca­tions “ex­cept for pam­phle­teer­ing and com­mu­nity no­tice­boards”. The threat worked. Writ­ing in May for an in­ter­na­tional me­dia law blog, defama­tion ex­pert Patrick Ge­orge noted that the cur­rent law was a com­pro­mise that had been reached af­ter years of de­bate.

“The quick­est route to re­form is by the fed­eral com­mon­wealth gov­ern­ment leg­is­lat­ing its own defama­tion act, which by virtue of the Aus­tralian Con­sti­tu­tion would over­ride the cur­rent uni­form state and ter­ri­tory acts to the ex­tent of in­con­sis­ten­cies, un­der the con­sti­tu­tional power over com­mu­ni­ca­tions,” writes Ge­orge, who is a part­ner in Syd­ney law firm Kennedys.

He adds that the ex­pe­ri­ence in Bri­tain raised doubts about whether the in­tro­duc­tion of a “se­ri­ous harm” thresh­old test — which has been pro­posed by the me­dia coali­tion — would live up to ex­pec­ta­tions.

How­ever, Drey­fus al­ready seems to favour some of the me­dia’s pro­pos­als, par­tic­u­larly the in­tro­duc­tion of a “sin­gle pub­li­ca­tion rule” to over­come an early in­ter­net rul­ing by the High Court.

“It is clear that defama­tion law is ripe for re­form — and, in fact, has been for some time,” he says in a state­ment.

“There are clear in­di­ca­tions that the law is not work­ing as in­tended, and that it has not kept up with the age of so­cial me­dia and dig­i­tal tech­nol­ogy. The pos­si­bil­ity of mul­ti­ple ac­tions based on the same pub­li­ca­tion, and the ef­fec­tive re­moval of lim­i­ta­tion pe­ri­ods be­cause of con­tin­u­ous re­pub­li­ca­tion on the in­ter­net, are two ob­vi­ous ex­am­ples,” he points out.

“Given the clear risk of defama­tion law im­ped­ing free speech and jour­nal­is­tic free­dom, there is no room for in­er­tia.

“La­bor wel­comes the work that has been done by NSW to re­view the oper­a­tion of ex­ist­ing law, but be­lieves that na­tional re­con­sid­er­a­tion is also war­ranted.”

The start­ing point for the re­view is a sys­tem that many in the me­dia and the law be­lieve is skewed to­wards plain­tiffs.

David Rolph, a pro­fes­sor of law at the Uni­ver­sity of Syd­ney, puts it this way: “Look­ing at things over­all, I think it is still true to say that it is bet­ter to be a plain­tiff than a de­fen­dant in a defama­tion case in Aus­tralia.

“The bal­ance is prob­a­bly still firmly on the plain­tiffs’ side so I think we could even up the bal- ance a bit and have a look at the law re­form pro­cesses that other coun­tries through­out the Com­mon­wealth have un­der­taken,” Rolph says.

He says it is worth tak­ing note of re­cent re­forms in Bri­tain “that have made the law more friendly to de­fen­dants and pro­tec­tive of free speech”.

Paul Mur­phy, chief ex­ec­u­tive of the Me­dia En­ter­tain­ment and Arts Al­liance, be­lieves the re­stric­tive ap­proach to defama­tion in Aus­tralia is in­creas­ingly out of step with in­ter­na­tional prac­tice and is lim­it­ing the abil­ity of the me­dia to do its job.

The law, he says, is giv­ing the me­dia an in­cen­tive “to set­tle, or not to pub­lish for fear of the costs in­volved”.

The test con­fronting the gov­ern­ments is whether they will leave in place a sys­tem that means the arms and legs of or­di­nary peo­ple are worth less than some­one else’s hurt feel­ings.

‘It is bet­ter to be a plain­tiff than a de­fen­dant in a defama­tion case in Aus­tralia. The bal­ance is prob­a­bly still firmly on the plain­tiffs’ side so I think we could even up the bal­ance a bit’ DAVID ROLPH LAW PRO­FES­SOR, UNI­VER­SITY OF SYD­NEY

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