The Jury’s Out On New Defamation Bill

New legislation proposals contain some welcome changes for businesses and media but don’t go far enough in some areas, writes Ann-Marie Lenihan of NewsBrands Ireland

Litigation is expensive, slow and its outcome uncertain. Businesses should avoid it if at all possible. The problems are exacerbated in defamation cases. Ireland is an outlier where awards are concerned. They are many multiples of what would be given by UK courts and exceed those of continental Europe by a factor of ten. According to a Supreme Court decision in 2022, a ‘medium’ defamation should see a tax-free award of €50,000 to €125,000.

Unusually for civil cases, there are juries in High Court actions who decide both whether material is defamatory and the amount of any award. Their involvement lengthens considerably both the trial itself and the time taken for it to come on for hearing. Juries’ decisions are erratic and lack transparency, which leads to greatly increased legal costs.

Those costs can be eye-watering. It is almost impossible for a full High Court defamation trial to take less than four days. In those circumstances, the costs of each side will be in excess of €200,000, to be borne by the defeated party, and that’s before any award.

Even in the Circuit Court, where cases are heard by a judge alone, who can make awards of up to €75,000, the costs of a one-day hearing will be about €30,000 for each side. Most retail defamation cases – involving, for example, questioning whether a customer has paid for an item or a bank wrongly declining a card – are heard in the Circuit Court. It is very easy for a business to run up a six-figure bill for such claims.

The Government has recognised there are problems and is hoping to pass a Defamation (Amendment) Bill this year. It is currently on the legislative priority list, but whether it gets through all stages of the Oireachtas before the general election is less than certain.

The Bill has some good news for business and for the media. Despite vocal opposition from sections of the legal profession, the Government has decided to abolish juries, bringing defamation in line with most other civil actions.

The Bill also introduces a serious harm test in cases involving companies, public authorities and retailers. A claimant will have to show that there has been serious harm to his or her reputation before being allowed to take a defamation case.

Such a test has been in place in the UK since 2013.

The General Scheme of the Bill also includes a provision that it would not be defamatory for a retailer to ask customers to produce a receipt or proof of payment or to inform them that a payment has been declined, because of a reasonable belief about the validity of the payment method, whether cash or card. This should serve to filter out actions that have no merit.

It is a mystery, however, why a serious harm test is not being introduced in all defamation cases, including those involving the media. Like other businesses, the Irish media faces on an almost daily basis unwarranted and exaggerated claims for defamation. The costs of defending these cases are significant, and these costs are often unrecoverable even where the defence succeeds.

A serious harm test for all defamation proceedings would alleviate the costs of such unwarranted claims and the risks to Ireland associated with ‘libel tourism’.

In the absence of such a test, very wealthy claimants, including those with little or no connection to this country, will have little deterrent to stop them going to law here as the most proplaintiff regime in Europe.

It has been said that defamation is a game for the very rich and the very poor. Existing Irish law aggravates that. It’s about time it was changed.