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Nathaniel Rothschild v Associated Newspapers Limited [2011] EWHC 3462 (QB)

Case date: 21/12/2011

Court: High Court

Area/s of law: Defamation

Barrister/s: Andrew Caldecott QC, David Glen

Facts

The Claimant, a member of the well-known Rothschild banking family, sued the publishers of the Daily Mail for libel over an article published in May 2011 which was headlined “Revealed: the astonishing story of the night Lord Mandelson was flown to Moscow by private jet to join a billionaire friend desperate to strike a deal that cost British jobs”.

The Claimant asserted that the article was defamatory of him by alleging that for the purpose of ingratiating himself with Russian oligarch Oleg Deripaska, Mr Rothschild had taken extraordinary steps to ensure the attendance of his friend, the then EU Trade Commissioner Lord Mandelson at a meeting between Deripaska and American aluminium executives in Moscow which he must have known Lord Mandelson had no official reason for attending and which he must or ought to have foreseen would and did bring his friend’s public offices and personal integrity into disrepute and exposed him to accusations of conflict of interest. Mr Rothschild also alleged that the article meant that there were strong grounds to suspect that the Claimant had facilitated Lord Mandelson’s attendance at the meeting between Mr Deripaska and American aluminium executives so that Mr Deripaska could close a £500 million deal by securing corrupt and improper disclosures and commitments concerning EU aluminium tariffs from Lord Mandelson.

The Defendant applied for permission to amend its Defence. It admitted that it could not prove that the purpose of Lord Mandelson’s trip to Moscow had been for him to be present at a dinner to close the sale of the aluminium conglomerate. However, relying on evidence put forward in the Claimant’s witness statements, it sought permission to justify a more general case based on a further leg of Lord Mandelson’s trip to Russia, namely a visit to Siberia with Mr Deripaska which had also been organised by Mr Rothschild and which, the Defendant contended, meant that there were reasonable grounds to suspect that Lord Mandelson had discussed aluminium tariffs with Mr Deripaska in terms which would be open to criticism and that the Claimant had encouraged an inappropriate relationship between Lord Mandelson and Mr Deripaska in which that contact could occur.

Decision

The Defendant’s application to amend its case was granted. The court held that the article did include as a significant theme, wider allegations about the inappropriateness of Lord Mandelson’s relationship with Mr Deripaska, and the Claimant’s role in facilitating that relationship. It was not simply confined to the dinner in Moscow. The Defendant’s more general case concerning the totality of the events on the Russian trip bore a common sting with the allegations concerning the Moscow dinner and therefore the article was capable of bearing the more general meaning.

Without giving detailed reasons for its decision in light of the trial of the claim which is due to start in late January 2012, the court held that the Defendant’s particulars of justification had a real prospect of success and should be allowed to be advanced at trial.

In considering whether an amendment to the Defence should be allowed so close to trial, the court had regard to the Pre-Action Protocol correspondence. In this case, a Pre-Action Protocol letter had been written on behalf of the Claimant and this had been responded to by the Defendant. The Defendant’s response set out various facts in relation to Lord Mandelson’s Russian trip which it presumed that the Claimant accepted were accurate. Instead of replying to this letter, the Claimant issued proceeding. The Defendant pleaded a Defence on the basis of what it believed to be the accepted facts set out in its Pre-Action Protocol letter. The full details of Lord Mandelson’s trip to Siberia which had been arranged by the Claimant did not emerge fully in the Reply, but only in subsequent correspondence between the parties and then more substantively in the Claimant’s witness statements.

The judge stated that that while the introduction of the CPR and the Pre-Action Protocol had had not changed the presumption of falsity in a libel claim, the days when major libel trials could be conducted without either party knowing in advance the substance of the evidence to be adduced by the other side had long since gone. It would therefore be unjust and disproportionate to refuse the Defendant permission to amend its Defence on case management grounds, as the new case arose out of information provided by the Claimant and which closely related to the original case. The new case would not materially extend the scope of the action or the issues to be investigated at trial. Therefore, the Defendant’s application would be granted.

The judge emphasised that his decision cannot be read as containing any criticism of finding of fact adverse to Lord Mandelson, since he is not a party to the proceedings and no submissions had been made on his behalf.

Comment

As the judgment makes clear, this is the first decision in which pre-action correspondence, and the failure of a claimant to respond substantively to a defendant’s protocol letter, have been cited as the basis for allowing a late amendment to a Defence in a libel action. As paragraph 1.2 of the Defamation Pre-Action Protocol makes clear:

Compliance with the protocol will enable parties to make an informed judgement on the merits of their cases earlier than tends to happen today, because they will have earlier access to the information they need. This will provide every opportunity for improved communications between the parties designed to lead to an increase in the number of pre-action settlements.”

This decision therefore demonstrates the importance of engaging substantively and tactically with the Pre-Action Protocol in defamation claims and the consequences which may follow if factual errors in that correspondence are not challenged at the time. The effect of the Pre-Action Protocol and the CPR has been to “put all the cards on the table”, and the failure of both parties to adopt this approach may have unintended consequences. It will be interesting to see whether parties to a claim and the courts now pay closer attention to the detail of pre-action correspondence once a claim has been commenced and the extent to which the courts rule that the failure of either party to adhere to the “cards on the table approach” in that correspondence should impact on substantive issues during the conduct of the claim.

Andrew Caldecott QC and David Glen, instructed by RPC, appeared for the Defendant.

Jonathan Scherbel-Ball

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