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Jameel and others v Wall Street Journal Europe [2006] UKHL 44 House of Lords

[This version of the judgment has been edited by Dr Robert N Moles
Underlining where it occurs is for editorial emphasis]

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Lord Bingham Of Cornhill

This appeal raises two questions on the law of libel. The first concerns the entitlement of a trading corporation to sue and recover damages without pleading or proving special damage. The second concerns the scope and application of what has come to be called Reynolds privilege, an important form of qualified privilege.

The Wall Street Journal Europe, is a respected, influential and unsensational newspaper carrying serious news about international business, finance and politics. It is edited, published and printed in Brussels for distribution throughout Europe and the Middle East. It shares some editorial and journalistic personnel and facilities with its elder sister in New York, The Wall Street Journal, which has a large circulation in the United States.

Jameel is a prominent businessman and president of the Abdul Latif Jameel Group, an international trading conglomerate based in the Kingdom of Saudi Arabia comprising numerous companies and with interests in cars, shipping, property and distribution of electronic goods. The Company is incorporated in Saudi Arabia and is part of the Group. Jameel is the general manager and president of The Company, which does not itself own property or conduct any trade or business here, but which has a commercial reputation in England and Wales.

On 6 February 2002 the newspaper published the article which gave rise to these proceedings. It was headed "Saudi Officials Monitor Certain Bank Accounts" with a smaller sub-heading "Focus Is on Those With Potential Terrorist Ties". It bore the by-line of James M Dorsey, an Arabic-speaking reporter with specialist knowledge of Saudi Arabia, and acknowledged the contribution of Glenn Simpson, a staff writer in Washington. The gist of the article, succinctly stated in the first paragraph, was that the Saudi Arabian Monetary Authority, the Kingdom's central bank, was, at the request of US law enforcement agencies, monitoring bank accounts associated with some of the country's most prominent businessmen in a bid to prevent them from being used, wittingly or unwittingly, for the funnelling of funds to terrorist organisations. This information was attributed to " U.S. officials and Saudis familiar with the issue". In the second paragraph a number of companies and individuals were named, among them "the Abdullatif Jamil Group of companies" who, it was stated later in the article, "couldn't be reached for comment".

The jury in due course found that the article referred to was defamatory of Jameel and The Company. They may have understood the article to mean that there were reasonable grounds to suspect the involvement of them, or alternatively that there were reasonable grounds to investigate the involvement of them, in the witting or unwitting funnelling of funds to terrorist organisations. For present purposes it is immaterial which defamatory meaning the jury gave the passage complained of, neither of which the newspaper sought to justify.

The article was published some five months after the catastrophic events which took place in New York and Washington on 11 September 2001. During the intervening months the US authorities had taken determined steps, with strong international support, to cut off the flow of funds to terrorist organisations, including Al-Qaida. These steps were of particular importance in relation to Saudi Arabia , since a large majority of the suspected hijackers were of Saudi origin, and it was believed that much of their financial support came from Saudi sources. Yet the position of the Saudi authorities was one of some sensitivity. The Kingdom was an ally of the United States and condemned terrorism. But among its devoutly Muslim population there were those who resented the Kingdom's association with the United States and espoused the cause of Islamic jihad. Thus there were questions about whether, and to what extent, the Kingdom was co-operating with the US authorities in cutting off funds to terrorist organisations. This was, without doubt, a matter of high international importance, a very appropriate matter for report by a serious newspaper. But it was a difficult matter to investigate and report since information was not freely available in the Kingdom and the Saudi authorities, even if co-operating closely with those of the United States, might be embarrassed if that fact were to become generally known.

The trial of the action before Eady J and a jury lasted some three working weeks and culminated in verdicts for the claimants and awards of £30,000 and £10,000 respectively. Much evidence was called on both sides, of which the House has been referred to short excerpts only. The judge rejected the newspaper's argument on the damage issue and the Court of Appeal agreed with him. The judge also rejected the newspaper's claim to Reynolds privilege. On this question also the Court of Appeal upheld his decision, but on a more limited ground. This calls for more detailed consideration.

The judge put a series of questions to the jury which, so far as relevant to Reynolds privilege, were directed to two matters: the sources on which Mr Dorsey, as reporter, relied; and his attempt to obtain the respondents' response to his inclusion of their names in his proposed article. Mr Dorsey testified that he had relied on information given by a prominent Saudi businessman (source A), confirmed by a banker (source B), a US diplomat (source C), a US embassy official (source D) and a senior Saudi official (source E). In answer to the judge's questions the jury found that the newspaper had proved that Mr Dorsey had received the information he claimed to have received from source A, but had not proved that Mr Dorsey had received the confirmation he claimed from sources B-E inclusive. The judge attached significance to these negative findings, since Mr Dorsey said in evidence that he would not have written the article in reliance on source A alone. In the Court of Appeal, the judge's reliance on these negative findings was criticised by the newspaper. At the outset of his direction to the jury the judge had pointed out that there was no plea of justification and that therefore, if the jury found the article defamatory of the respondents, they should assume it to be untrue. This direction, it was said, may well have infected the jury's approach to the questions concerning sources B-E. The Court of Appeal refused the newspaper leave to raise a new ground of misdirection, and thought that the jury had "almost certainly" based their answers on the impression made by witnesses in court. But the Court of Appeal preferred to base its decision on the other ground relied on by the judge to deny privilege.

Mr Dorsey described attempts to obtain a response from the Group about his proposed article. He said he had telephoned the Group office at about 9am and left a recorded message. The jury found that the newspaper had not proved on the balance of probabilities that that was so. There was, it was agreed, a telephone conversation between Mr Dorsey and Mr Munajjed, an employee of the Group, on the evening of 5 February, the day before publication. During that conversation, according to Mr Munajjed, he had asked Mr Dorsey to wait until the following day for a comment by the Group. He had, he said, no authority to make a statement and the first respondent was in Japan, where the time was 3am. Mr Dorsey denied that Mr Munajjed had asked him to wait. But the jury found that Mr Munajjed had made that request. It was on this ground, as I understand, that the Court of Appeal upheld the judge's denial of Reynolds privilege:

Damage

The issue under this head is whether a trading company which itself conducts no business but which has a trading reputation within England and Wales should be entitled to recover general damages for libel without pleading and proving that the publication complained of has caused it special damage. To resolve this question it is helpful to distinguish three sub-issues:
(1) whether such an entitlement exists under the current law of England and Wales;
(2) whether, if so, article 10 of the European Convention on Human Rights requires revision of the current domestic law; and
(3) whether, if not, the current domestic law should in any event be revised.

(1)The current domestic law

The tort of libel has long been recognised as actionable per se. Thus where a personal plaintiff proves publication of a false statement damaging to his reputation without lawful justification, he need not plead or prove special damage in order to succeed. Proof of injury to his reputation is enough.

It was argued in South Hetton Coal Company Limited v North-Eastern News Association Limited [1894] that this rule did not apply to trading companies. The newspaper in that case had published an article strongly critical of the way in which the plaintiff, a colliery owner, housed its workers, and the company had not pleaded or proved any actual damage. It was argued for the publisher that a corporation could have no personal character, and that the article had not related to the business of the company. The Court of Appeal unanimously rejected this argument, holding the law of libel to be one and the same for all plaintiffs. While there were obvious differences between individuals and companies, the conclusion was clear:

"Then, if the case be one of libel - whether on a person, a firm, or a company - the law is that damages are at large. It is not necessary to prove any particular damage"

In Lewis v Daily Telegraph Ltd [1964] Lord Reid pointed out that a company cannot be injured in its feelings but only in its pocket. There was, however, no challenge in that case to the principle laid down in South Hetton, which was not cited in either party's printed case, or in argument, or in any judgment.

In Derbyshire County Council v Times Newspapers Ltd the issue concerned the entitlement of a local authority, not a trading corporation, to sue in libel. But at first instance South Hetton was cited, and contributed to Morland J's conclusion that a local authority could sue [1992]. On appeal, counsel for the newspaper distinguished South Hetton on the ground of the colliery company's trading character and counsel for the local authority relied on it. No member of the Court of Appeal questioned the decision. In the House, counsel for the local authority cited the decision. Counsel for the newspaper did not criticise it, but distinguished it as applicable to a company with a business reputation with which other members of the House agreed, Lord Keith (who had been a member of the Faulks committee) cited South Hetton at some length, and also National Union of General and Municipal Workers v Gillian [1946], in which a non-trading corporation (a trade union) had been assimilated to a trading corporation. He then continued:

"The authorities cited above clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. Examples are those that go to credit such as might deter banks from lending to it, or to the conditions experienced by its employees, which might impede the recruitment of the best qualified workers, or make people reluctant to deal with it. The South Hetton Coal Co case [1894] would appear to be an instance of the latter kind, and not an authority for the view that a trading corporation can sue for something that does not affect it adversely in the way of its business. The trade union cases are understandable upon the view that defamatory matter may adversely affect the union's ability to keep its members or attract new ones or to maintain a convincing attitude towards employers. Likewise in the case of a charitable organisation the effect may be to discourage subscribers or otherwise impair its ability to carry on its charitable objects. Similar considerations can no doubt be advanced in connection with the position of a local authority. Defamatory statements might make it more difficult to borrow or to attract suitable staff and thus affect adversely the efficient carrying out of its functions."

Lord Keith then went on to give his reasons for concluding that a local authority was to be distinguished from other types of corporation, whether trading or non-trading.

In Derbyshire the correctness of South Hetton was not challenged, but acceptance of its correctness was an important step in Lord Keith's reasoning and I find no ambiguity in the proposition he propounded: the authorities clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. In Shevill v Presse Alliance SA [1996], decided some three years later by a differently constituted committee of the House, one of the plaintiffs was a trading corporation and the presumption of damage in libel cases was treated as part of our national substantive law. I conclude that under the current law of England and Wales a trading company with a trading reputation in this country may recover general damages without pleading or proving special damage if the publication complained of has a tendency to damage it in the way of its business.

Article 10

Article 10 of the European Convention provides:

"1.Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.

2.The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary."

The central importance of this article in the Convention regime is clear beyond question, and is reflected in section 12 of the Human Rights Act 1998. Freedom to publish free of unjustifiable restraint must indeed be recognised as a distinguishing feature of the sort of society which the Convention seeks to promote. The newspaper in this case relies on article 10 to contend that a domestic rule entitling a trading corporation to sue in libel when it can prove no financial loss is an unreasonable restraint on the right to publish protected by article 10.

This is not an unattractive argument, and it would be persuasive if, in such a case, excessive, punitive or exemplary damages were awarded. But the damages awarded to The Company in this case were not excessive, and the argument encounters three problems of principle. First, as the text of article 10 makes plain, the right guaranteed by the article is not unqualified. The right may be circumscribed by restrictions prescribed by law and necessary and proportionate if directed to certain ends, one of which is the protection of the reputation or rights of others. Thus a national libel law may, consistently with article 10, restrain the publication of defamatory material.

Secondly, the national rule here in question, pertaining to the recovery of damages by a trading corporation which proves no financial loss, has been the subject of challenge before the European Commission and Court in the context of libel proceedings brought by two corporate plaintiffs against two individual defendants. In S and M v United Kingdom (1993), the challenge to the rule was somewhat oblique and the Commission made the points summarised above. In Steel and Morris v United Kingdom (2005) the challenge was direct. The Court accepted that the domestic rule was as stated in Derbyshire but held that

"The state therefore enjoys a margin of appreciation as to the means it provides under domestic law to enable a company to challenge the truth, and limit the damage, of allegations which risk harming its reputation."

The Court cited and echoed observations in an earlier decision, Märkt Intern and Beerman v Germany (1989). Thus the Court did not hold the current rule to be necessarily inconsistent with article 10: it was a matter for the judgment of the national authorities.

Thirdly, the weight placed by the newspaper on the chilling effect of the existing rule is in my opinion exaggerated. Among the arguments it advances is that the rule is unnecessary since, it is said, defamation of a company involves defamation of directors and individuals who are free to sue as personal plaintiffs. I very much doubt if this is always so, although in some cases it will be. But, to the extent that it is so, I question whether the possibility of a claim by the company will add significantly to the chilling effect of a claim by the individuals. I would accordingly answer this question in the negative.

Revision of the current law

Since the European Court accords a generous margin of appreciation to the judgment of national authorities, and these include courts, it is appropriate for the House to review the merits of the South Hetton rule as re-stated in Derbyshire. The newspaper argues that, in accordance with the trend towards enhanced recognition of freedom of expression, the rule should be abrogated. Parliament could of course have legislated to abrogate or modify the rule, but it has not done so. It is accordingly necessary to revert to basic principles.

The tort of defamation exists to afford redress for unjustified injury to reputation. By a successful action the injured reputation is vindicated. The ordinary means of vindication is by the verdict of a judge or jury and an award of damages. Most plaintiffs are individuals, who are not required to prove that they have suffered financial loss or even that any particular person has thought the worse of them as a result of the publication complained of. I do not understand this rule to be criticised. Thus the question arises whether a corporation with a commercial reputation within the jurisdiction should be subject to a different rule.

There are of course many defamatory things which can be said about individuals which could not be said about corporations. But it is not at all hard to think of statements seriously injurious to the general commercial reputation of trading and charitable corporations. Should the corporation be entitled to sue in its own right only if it can prove financial loss? I do not think so, for two main reasons.

First, the good name of a company, as that of an individual, is a thing of value. A damaging libel may lower its standing in the eyes of the public and even its own staff, make people less ready to deal with it, less willing or less proud to work for it. If this were not so, corporations would not go to the lengths they do to protect and burnish their corporate images. I find nothing repugnant in the notion that this is a value which the law should protect. Nor do I think it an adequate answer that the corporation can itself seek to answer the defamatory statement by press release or public statement, since protestations of innocence by the impugned party necessarily carry less weight with the public than the prompt issue of proceedings which culminate in a favourable verdict by judge or jury. Secondly, I do not accept that a publication, if truly damaging to a corporation's commercial reputation, will result in provable financial loss, since the more prompt and public a company's issue of proceedings, and the more diligent its pursuit of a claim, the less the chance that financial loss will actually accrue.

I do not on balance consider that the existing rule should be changed, provided always that where a trading corporation has suffered no actual financial loss any damages awarded should be kept strictly within modest bounds.

Reynolds Privilege

The decision of the House in Reynolds v Times Newspapers Ltd [2002] built on the traditional foundations of qualified privilege but carried the law forward in a way which gave much greater weight than the earlier law had done to the value of informed public debate of significant public issues. Both these aspects are, I think, important in understanding the decision.

Underlying the development of qualified privilege was the requirement of a reciprocal duty and interest between the publisher and the recipient of the statement in question. Some of the cases concerned very limited publication, but some did not. Thus where a publication related to a matter of public interest, it was accepted that the reciprocal duty and interest could be found even where publication was by a newspaper to a section of the public or the public at large. In Reynolds the Court of Appeal restated these tests , although it suggested a third supplemental test which the House held to be mistaken.

I do not understand the House to have rejected the duty / interest approach. The necessary pre-condition of reliance on qualified privilege in this context is that the matter published should be one of public interest. In the present case the subject matter of the article complained of was of undoubted public interest. But that is not always, perhaps not usually, so. It has been repeatedly and rightly said that what engages the interest of the public may not be qualified privilege as a live issue only arises where a statement is defamatory and untrue. It was in this context, and assuming the matter to be one of public interest, that Lord Nicholls proposed a test of responsible journalism, a test repeated in Bonnick v Morris [2003]. The rationale of this test is, as I understand, that there is no duty to publish and the public have no interest to read material which the publisher has not taken reasonable steps to verify. As Lord Hobhouse observed with characteristic pungency, "No public interest is served by publishing or communicating misinformation". But the publisher is protected if he has taken such steps as a responsible journalist would take to try and ensure that what is published is accurate and fit for publication.

Lord Nicholls listed certain matters which might be taken into account in deciding whether the test of responsible journalism was satisfied. He intended these as pointers which might be more or less indicative, depending on the circumstances of a particular case, and not as a series of hurdles to be negotiated by a publisher before he could successfully rely on qualified privilege. Lord Nicholls recognised that it had to be a body other than the publisher, namely the court, which decided whether a publication was protected by qualified privilege. But this does not mean that the editorial decisions and judgments made at the time, without the knowledge of falsity which is a benefit of hindsight, are irrelevant. Weight should ordinarily be given to the professional judgment of an editor or journalist in the absence of some indication that it was made in a casual, cavalier, slipshod or careless manner.

Some misunderstanding may perhaps have been engendered by Lord Nicholls' references to "the particular information". It is of course true that the defence of qualified privilege must be considered with reference to the particular publication complained of as defamatory, and where a whole article or story is complained of no difficulty arises. But difficulty can arise where the complaint relates to one particular ingredient of a composite story, since it is then open to a plaintiff to contend, as in the present case, that the article could have been published without inclusion of the particular ingredient complained of. This may, in some instances, be a valid point. But consideration should be given to the thrust of the article which the publisher has published. If the thrust of the article is true, and the public interest condition is satisfied, the inclusion of an inaccurate fact may not have the same appearance of irresponsibility as it might if the whole thrust of the article is untrue.

These principles must be applied to the present case. The Court of Appeal upheld the judge's denial of Reynolds privilege on a single ground, discounting the jury's negative findings concerning Mr Dorsey's sources: that the newspaper had failed to delay publication of the respondents' names without waiting long enough for the respondents to comment. This seems to me, with respect, to be a very narrow ground on which to deny the privilege, and the ruling subverts the liberalising intention of the Reynolds decision. The subject matter was of great public interest, in the strictest sense. The article was written by an experienced specialist reporter and approved by senior staff on the newspaper and The Wall Street Journal who themselves sought to verify its contents. The article was unsensational in tone and (apparently) factual in content. The respondents' response was sought, although at a late stage, and the newspaper's inability to obtain a comment recorded. It is very unlikely that a comment, if obtained, would have been revealing, since even if the respondents' accounts were being monitored it was unlikely that they would know. It might be thought that this was the sort of neutral, investigative journalism which Reynolds privilege exists to protect. I would accordingly allow the appeal and set aside the Court of Appeal judgment.

I am in much more doubt than my noble and learned friends what the consequence of that decision should be. The House has not, like the judge and the jury, heard the witnesses and seen the case develop day after day. It has read no more than a small sample of the evidence. It seems to me a large step for the House, thus disadvantaged, to hold that the publication was privileged, and I am not sure that counsel for the newspaper sought such a ruling. But I find myself in a minority, and it serves no useful purpose to do more than express my doubt.

Lord Hoffmann

The principal question is whether the newspaper was entitled to the defence of publication in the public interest established by the decision of this House in Reynolds v Times Newspapers Ltd. The judge and the Court of Appeal rejected it. But in my opinion they gave it too narrow a scope. It should have been upheld and the action dismissed.

Until very recently, the law of defamation was weighted in favour of claimants and the law of privacy weighted against them. True but trivial intrusions into private life were safe. Reports of investigations by the newspaper into matters of public concern which could be construed as reflecting badly on public figures domestic or foreign were risky. The House attempted to redress the balance in favour of privacy in Campbell v MGN Ltd [2004] and in favour of greater freedom for the press to publish stories of genuine public interest in Reynolds v Times Newspapers Ltd. But this case suggests that Reynolds has had little impact upon the way the law is applied at first instance. It is therefore necessary to restate the principles.

A defence of privilege in the usual sense is available when the defamatory statement was published on a privileged occasion and can be defeated only by showing that the privilege was abused. As Lord Diplock said in a well-known passage in Horrocks v Lowe [1975]:

"The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters in respect of which the law recognises that they have a duty to perform or an interest to protect in doing so. What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue. With some exceptions which are irrelevant to the instant appeal, the privilege is not absolute but qualified. It is lost if the occasion which gives rise to it is misused."

Misuse of the privileged occasion is technically known as "malice" and the burden is upon the claimant to prove it. In Reynolds, counsel for the newspaper invited the House to declare a similar privilege for the publication of political information. But the House refused to do so. Lord Nicholls of Birkenhead said that to allow publication of any defamatory statements of a political character, subject only to proof of malice, would provide inadequate protection for the reputation of defamed individuals.

Instead, Lord Nicholls saidthat—

"the common law solution is for the court to have regard to all the circumstances when deciding whether the publication of particular material was privileged because of its value to the public. Its value to the public depends upon its quality as well as its subject matter. This solution has the merit of elasticity. As observed by the Court of Appeal, this principle can be applied appropriately to the particular circumstances of individual cases in their infinite variety. It can be applied appropriately to all information published by a newspaper, whatever its source or origin."

Although Lord Nicholls uses the word "privilege", it is clearly not being used in the old sense. It is the material which is privileged, not the occasion on which it is published. There is no question of the privilege being defeated by proof of malice because the propriety of the conduct of the defendant is built into the conditions under which the material is privileged. The burden is upon the defendant to prove that those conditions are satisfied. I therefore agree with the opinion of the Court of Appeal in Loutchansky v Times Newspapers Ltd (Nos 2-5) [2002] that "Reynolds privilege" is "a different jurisprudential creature from the traditional form of privilege from which it sprang." It might more appropriately be called the Reynolds public interest defence rather than privilege.

In Reynolds itself, the publication failed by a very considerable margin to satisfy the conditions for the new defence. The House was therefore able to deal with those conditions only in very general terms. Lord Nicholls offered guidance in the form of a non-exhaustive, illustrative list of matters which, depending on the circumstances, might be relevant. "Over time", he said, "a valuable corpus of case law will be built up." This case, in my opinion, illustrates the circumstances in which the defence should be available.

(a)The public interest of the material

The first question is whether the subject matter of the article was a matter of public interest. In answering this question, I think that one should consider the article as a whole and not isolate the defamatory statement. It is true that Lord Nicholls said, in the passage which I have quoted above, that the question is whether the publication of "particular material" was privileged because of its value to the public. But the term "particular material" was in my opinion being used by contrast with the generic privilege advocated by the newspaper. It was saying that one must consider the contents of each publication and not decide the matter simply by reference to whether it fell within a general category like political information. But that did not mean that it was necessary to find a separate public interest justification for each item of information within the publication. Whether it was justifiable to include the defamatory statement is a separate question, to which I shall return in a moment.

The question of whether the material concerned a matter of public interest is decided by the judge. As has often been said, the public tends to be interested in many things which are not of the slightest public interest and the newspapers are not often the best judges of where the line should be drawn. It is for the judge to apply the test of public interest. But this publication easily passes that test. The thrust of the article as a whole was to inform the public that the Saudis were co-operating with the US Treasury in monitoring accounts. It was a serious contribution in measured tone to a subject of very considerable importance.

In answering the question of public interest, I do not think it helpful to apply the classic test for the existence of a privileged occasion and ask whether there was a duty to communicate the information and an interest in receiving it. The Reynolds defence was developed from the traditional form of privilege by a generalisation that in matters of public interest, there can be said to be a professional duty on the part of journalists to impart the information and an interest in the public in receiving it. The House having made this generalisation, it should in my opinion be regarded as a proposition of law and not decided each time as a question of fact. If the publication is in the public interest, the duty and interest are taken to exist. The Reynolds defence is very different from the privilege discussed by the Court of Appeal in Blackshaw v Lord [1984], where it was contemplated that in exceptional circumstances there could be a privileged occasion in the classic sense, arising out of a duty to communicate information to the public generally and a corresponding interest in receiving it. The Court of Appeal there contemplated a traditional privilege, liable to be defeated only by proof of malice. But the Reynolds defence does not employ this two-stage process. It is not as narrow as traditional privilege nor is there a burden upon the claimant to show malice to defeat it.

Inclusion of the defamatory statement

If the article as a whole concerned a matter of public interest, the next question is whether the inclusion of the defamatory statement was justifiable. The fact that the material was of public interest does not allow the newspaper to drag in damaging allegations which serve no public purpose. They must be part of the story. And the more serious the allegation, the more important it is that it should make a real contribution to the public interest element in the article. But whereas the question of whether the story as a whole was a matter of public interest must be decided by the judge without regard to what the editor's view may have been, the question of whether the defamatory statement should have been included is often a matter of how the story should have been presented. And on that question, allowance must be made for editorial judgment. If the article as a whole is in the public interest, opinions may reasonably differ over which details are needed to convey the general message. The fact that the judge, with the advantage of leisure and hindsight, might have made a different editorial decision should not destroy the defence. That would make the publication of articles which are, ex hypothesi, in the public interest, too risky and would discourage investigative reporting.

In the present case, the inclusion of the names of large and respectable Saudi businesses was an important part of the story. It showed that co-operation with the US Treasury's requests was not confined to a few companies on the fringe of Saudi society but extended to companies which were by any test within the heartland of the Saudi business world. To convey this message, inclusion of the names was necessary. Generalisations such as "prominent Saudi companies", which can mean anything or nothing, would not have served the same purpose.

Responsible journalism

If the publication, including the defamatory statement, passes the public interest test, the inquiry then shifts to whether the steps taken to gather and publish the information were responsible and fair. As Lord Nicholls said in Bonnick v Morris [2003]:

"Stated shortly, the Reynolds privilege is concerned to provide a proper degree of protection for responsible journalism when reporting matters of public concern. Responsible journalism is the point at which a fair balance is held between freedom of expression on matters of public concern and the reputations of individuals. Maintenance of this standard is in the public interest and in the interests of those whose reputations are involved. It can be regarded as the price journalists pay in return for the privilege."

Lord Nicholls was speaking in the context of a publication in a newspaper but the defence is of course available to anyone who publishes material of public interest in any medium. The question in each case is whether the defendant behaved fairly and responsibly in gathering and publishing the information. But I shall for convenience continue to describe this as "responsible journalism".

In this case, Eady J said that the concept of "responsible journalism" was too vague. It was, he said, "subjective". I am not certain what this means, except that it is obviously a term of disapproval. (In the jargon of the old Soviet Union , "objective" meant correct and in accordance with the Party line, while "subjective" meant deviationist and wrong.) But the standard of responsible journalism is as objective and no more vague than standards such as "reasonable care" which are regularly used in other branches of law. Greater certainty in its application is attained in two ways. First, as a body of illustrative case law builds up. Secondly, just as the standard of reasonable care in particular areas, such as driving a vehicle, is made more concrete by extra-statutory codes of behaviour like the Highway Code, so the standard of responsible journalism is made more specific by the Code of Practice which has been adopted by the newspapers and ratified by the Press Complaints Commission. This too, while not binding upon the courts, can provide valuable guidance.

In Reynolds, Lord Nicholls gave his well-known non-exhaustive list of ten matters which should in suitable cases be taken into account. They are not tests which the publication has to pass. In the hands of a judge hostile to the spirit of Reynolds, they can become ten hurdles at any of which the defence may fail. That is how Eady J treated them. The defence, he said, can be sustained only after "the closest and most rigorous scrutiny" by the application of what he called "Lord Nicholls' ten tests". But that, in my opinion, is not what Lord Nicholls meant. As he said in Bonnick the standard of conduct required of the newspaper must be applied in a practical and flexible manner. It must have regard to practical realities.

Instead, Eady J rigidly applied the old law. Building upon some obiter remarks of Lord Cooke in McCartan Turkington Breen v Times Newspapers Ltd to which he referred seven times in the course of his judgment (the case was actually about statutory privilege), the judge insisted that Reynolds had changed nothing. It was not in his opinion sufficient that the article concerned a matter of public interest and was the product of responsible journalism. It was still necessary to show that the newspaper was under a social or moral duty to communicate to the public at large not merely the general message of the article (the Saudis were co-operating with the US Treasury) but the particular defamatory statement that accounts associated with the claimants were being monitored. A "useful cross-check", he suggested, was "whether the journalists concerned might be the subject of legitimate criticism if they withheld the ex hypothesi false allegations." In my opinion this approach, equating a responsible journalist reporting on matters of public interest with an employer who has a moral duty to include in his reference the fact that his former employee was regularly drunk on duty, is quite unrealistic. Its use by Eady J on two previous occasions had already been criticised by the Court of Appeal. In my opinion it is unnecessary and positively misleading to go back to the old law on classic privilege. It is the principle stated in Reynolds and encapsulated by Lord Nicholls in Bonnick which should be applied. On this question I have had the advantage of reading in draft the opinion of my noble and learned friend Baroness Hale of Richmond and wholeheartedly concur in her remarks.

I therefore pass to the question of whether the newspaper satisfied the conditions of responsible journalism. This may be divided into three topics: the steps taken to verify the story, the opportunity given to the Jameel group to comment and the propriety of publication in the light of US diplomatic policy at the time.

Mr James Dorsey, the correspondent in Riyadh, said that his story was derived from 5 sources whom, in accordance with journalistic practice, he did not identify by name. In Reynolds, Lord Nicholls said that any disputes of primary fact about matters relevant to the defence should be left to the jury. The judge therefore asked the jury whether the defendant had proved, on a balance of probabilities, that Mr Dorsey had been informed by source A that the Abdul Latif Jameel group was on an unpublished list of names whose accounts were being monitored by SAMA at the request of the United States and whether this had been confirmed by sources B to E.

That was a perfectly proper question to leave to the jury, but what in my opinion vitiated the answers was the assumption which the judge instructed the jury to make in considering it. He said:

"If…you come to the view, after due consideration, that the article does in some way link one or other or both of them to the funding of terrorism, then we accept, as an absolute fundamental assumption in this case, that such allegation is untrue….You and I therefore proceed on the basis that neither claimant was being monitored nor suspected nor on any list of suspects provided to the Saudis by the United States Government or anyone else…To put it simply, what Mr Price argues is that if in fact it was not true that they were on the list and it is not true they were being monitored, how can his sources have given him that information? What matters at this stage is that I am stating, as the law requires me to state, that they are fully entitled to the presumption that they are not guilty of funding terror or on any list or suspected of doing so."

In other words, the jury were told that in deciding whether sources B to E had given the information, they were to assume that they would have known that it was false. In the circumstances, it is not surprising that they were unconvinced that sources B to E had confirmed the story. It is true that they accepted that source A had provided Mr Dorsey with his lead, but that may have been because source A did not have first-hand knowledge and could not therefore be treated as having known that the information was false.

Telling the jury to make that assumption was, as the Court of Appeal decided, a misdirection. The fact that the defamatory statement is not established at the trial to have been true is not relevant to the Reynolds defence. It is a neutral circumstance. The elements of that defence are the public interest of the material and the conduct of the journalists at the time. In most cases the Reynolds defence will not get off the ground unless the journalist honestly and reasonably believed that the statement was true but there are cases in which the public interest lies simply in the fact that the statement was made, when it may be clear that the publisher does not subscribe to any belief in its truth. In either case, the defence is not affected by the newspaper's inability to prove the truth of the statement at the trial.

Although the Court of Appeal accepted that this was a misdirection, they refused leave to appeal on the point, partly because counsel for the newspaper had not raised the matter at the trial and partly because they thought it would have made no difference to the outcome. But they agreed that they should not rule out the Reynolds defence on the basis of the jury's answers to the questions about Mr Dorsey's sources and that "if this appeal is to be dismissed, it should be on the basis of the findings in favour of the Jameels in respect of the other issues before us." I agree and one can therefore leave the answers to the questions about sources B to E on one side.

In Washington

In New York, the news editor Ms Blackshire had Mr Simpson in Washington check it with the US Treasury, which was alleged to have provided SAMA with the list of accounts including those of the companies named in the story. The Washington staff reporter Mr Simpson gave evidence that he had given his contact at the Treasury the names provided by Mr Dorsey and that the Treasury had confirmed to him that they were on the list.

Mr Simpson's evidence said loud and clear that his Treasury source confirmed the story. But the source did so in words which, in normal usage, would not be regarded as words of confirmation. If there was the ritual or code to which Mr Simpson testified, it was nevertheless confirmation. The meaning of a communication depends not only upon the dictionary meaning of words but upon the common assumptions between the parties about what words will be used to mean. If it is clearly understood between two parties to a conversation that the word black will be used to mean white, then when one of them says black, he intends to use and knows that he will be understood to have used the word to mean white. There was therefore an issue of primary fact in relation to Mr Simpson's evidence, namely whether there was a convention among journalists and their Washington government sources by which "We are not going to make a public comment" would be intended and understood to mean "We confirm our understanding that your story is correct." If it was to be challenged, the claimants could have called evidence on the point and in any event the question should have been left to the jury. As it was, Mr Simpson's evidence of the convention stood unshaken and uncontradicted.

Opportunity to comment

One of the matters which Lord Nicholls in Reynolds said should be taken into account was the opportunity, if any, which the claimant had been given to comment on the allegations before they were published. But Lord Nicholls  rejected the suggestion that failure to obtain and report a comment should always be fatal to the defence:

The judge and the Court of Appeal regarded the refusal to delay publication as fatal to the defence. The judge in particular drew attention to the fact that Mr Jameel subsequently obtained a denial from SAMA that they were monitoring his account and, if he had been given 24 hours, would very likely have been able to produce the denial to the Wall Street Journal before publication. In that case, said Eady J —

"the importance of this front-page story would have been considerably blunted - even to the extent, perhaps, that no such story could be published."

I am bound to say that I regard this as unrealistic. There was no way in which SAMA would admit to monitoring the accounts of well known Saudi businesses at the request of the US Treasury. A denial was exactly what one would expect. But I do not imagine that SAMA's denial would have inhibited the Wall Street Journal from publishing a story which had been confirmed by the Treasury in Washington. While it is true that the story would have been no better or worse 24 hours later, this is only significant if the delay would have made a difference. In my opinion it would not.

Lord Nicholls said that the importance of approaching the claimant was that "he may have information others do not possess or have not disclosed". But that was not the case here. In the nature of things, Mr Jameel would have no knowledge of whether there was covert surveillance of his bank account. He could only say, as Mr Munajjed and the other named businesses approached by Mr Dorsey had said, that he knew of no reason why anyone should want to monitor his accounts. This Mr Dorsey would have reported if he had been allowed to do so.

It might have been better if the newspaper had delayed publication to give Mr Jameel an opportunity to comment in person. But I do not think that their failure to do so is enough to deprive them of the defence that they were reporting on a matter of public interest.

Diplomatic relations

The article, it will be recalled, said that "the US had agreed not to publish the names of Saudi institutions and individuals provided that Saudi authorities took appropriate action". The judge rejected the newspaper's defence on the additional ground that it could not be in the public interest for the Wall Street Journal to publish information which the US government had agreed not to publish. In principle, I would be very reluctant to accept the proposition that it cannot be in the public interest for a newspaper to publish information which one's government had agreed not to publish. But in any case, the position of the Wall Street Journal was that they had no wish to publish anything which might be damaging to the diplomatic interests of the United States or its attempts to secure Saudi co-operation in tracing terrorist funds. If the Treasury had indicated that the information should not be published, they probably would not have done so. But the Treasury cleared the article and that was good enough for them.

The Court of Appeal rejected this argument on the ground that the judge had not been convinced that the Treasury was content that the information should be released. There seems to me, however, no ground on which the judge could reject Mr Simpson's evidence on this point. If he was to be disbelieved, that should have been left to the jury.

Disposal

In my opinion there was no basis for rejecting the newspaper's Reynolds defence. For the reasons I have given, no weight can be attached to the jury's rejection of the confirmation by sources in Saudi Arabia and they were asked no question about the confirmation in Washington. The failure to delay publication and the effect on diplomatic relations are insufficient reasons. The question is then whether the case should be remitted for a new trial or whether the appeal should be allowed and the action dismissed.

A new trial would in effect be to allow the jury to answer the question to which Mr Price objected, namely, whether Mr Simpson was telling the truth when he said that he had received confirmation in Washington. If this question had been answered in the newspaper's favour, it would have been bound to succeed. Indeed, such an answer, and a correction of the misdirection on the presumption of innocence, would be likely also to have affected the jury's answers to the questions on confirmation in Saudi Arabia. But Mr Simpson's evidence was, as I have said, essentially uncontradicted. I think that it is now too late for the claimants to change their minds and have the question of his veracity put to the jury. I would therefore allow the appeal and dismiss the action.

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