Roger Pearson looks at a High Court ruling which has serious implications for those considering a managerial role in publishing . A recent High Court ruling is being viewed as a major legal disincentive for businessmen to give financial backing to publishing enterprises. The ruling upheld a £2,000 fine imposed on the managing director of a national business newspaper after it identified a rape victim.
Media lawyer and solicitor advocate David Price, who represented the director in the case, says: "The decision is very significant and extremely worrying. It must serve to discourage anyone from taking on a purely financial management role in a publishing enterprise."
The fine was imposed on Gordon Brown, the former managing director of Sunday Business. He was prosecuted at Marylebone Magistrates Court along with the paper's editor, Tom Rubython, and the former publisher, Sunday Business Newspapers, after the paper named the woman who millionaire Owen Oyston was found guilty of raping. It was ruled that this was in breach of the 1976 Sexual Offences (Amendment) Act .
Brown had been acting as "caretaker" managing director of Sunday Business for only four weeks when the publication occurred.
Price argued that Brown was simply a financial backer with no editorial control or knowledge of editorial matters. He claimed that Brown could not be held criminally responsible for the offending article.
However, Mr Justice Astill said there was no legal authority for the principle that a managing director who had no direct knowledge could not be liable. He said that, under the 1976 Act, Brown was liable.
"The object is, in my judgment, to prevent those who bear responsibility from sheltering under lack of knowledge of the publication of the offending material," said Mr Justice Astill.
It was argued on Brown's part that there was no case for him to answer.
But the judge said: "I have no difficulty in rejecting that on the basis that Mr Brown was managing director, with all that office involves, of a company which published the offending article."
He considered that the magistrates court, even though it was satisfied Brown had not seen or read the offending article, was justified in taking the view that the editorial content of the paper would have been made available to Brown and that in those circumstances he was not entitled to mount a defence of lack of knowledge.
Price, who says he was "amazed" by the decision, thinks it is the first time that a director, with no hands-on control of the editorial content, has been called to account in this way. He emphasises that Brown had done all he could to ensure that the content of the paper was legally safe by employing solicitors to vet the contents before publication. But on this occasion, the solicitors were not shown the article which led to the prosecution.
Price says that under the provisions of the 1976 Act it has always been assumed that, while those with editorial control can be prosecuted, those such as Brown have a different degree of liability and should not be prosecuted. He says that this ruling appears to be a radical break with that understanding of the Act.
After the High Court ruling Brown said: "Anyone thinking of becoming a managing director of a publishing company is taking an enormous risk given today's judgment."