The case of Walker Wingsail Systems, where a jury awarded £1.485 million libel damages against the editor and publishers of Yachting World in 1994, has now been settled prior to the appeal.
Rather surprisingly, the defendants publicised the settlement figure under which they pay £760,000 in damages, costs and interest to the plaintiffs.
As their own legal bill amounted to roughly the same again, the case is likely to have cost Yachting World a horrendous £1.5 million.
The settlement has not been blanketed with the usual coy references to substantial sums of money and as a result it is possible to look in more detail at a case that highlights the woeful rules regarding damages in libel cases.
The case was not, as many perceived it to be, simply about fair comment in a review of the performance of the revolutionary Wingsail boat designed by John Walker.
The jury accepted the plaintiff's contentions, forcefully advocated by George Carman QC, that this was not a review of the boat as such but an allegation of false claims having been wilfully made as to its performance.
In a sense, Mr Carman was too successful because the jury awarded the company a staggering £1 million damages, despite there being no claim for special damages, £450,000 to Walker and £35,000 to his wife. The experienced libel judge Sir Michael Davies gave a pretty good indication of his views when he confined the immediate payment out of damages to the plaintiffs to a total of £160,000. The final
settlement of the case resulted in the plaintiffs receiving £250,000 damages.
On any view, they recovered a substantial sum of damages in a case where the defendants had been sufficiently confident of their case not to pay any money into court.
The spin which a sympathetic media put on the result of the case was that the defendants had succeeded in 'slashing' the damages. The reality was that the plaintiffs had received the substantial damages which a jury would probably have awarded if the judge had been able to give them guidance on the appropriate level of damages.
Unfortunately, Davies was not permitted to do this and he could only refer the jury to a figure between 10p and £20 million. It would have been much better if he could have set a range of damages for each plaintiff within which the jury could fix a sum depending on their view of the facts.
As it is, juries tend to remember the higher awards – indeed, many are more likely to remember the original award against Yachting World rather than the figure at which it settled on appeal.
The last thing which the plaintiffs want after a contested libel action is to have to go to the Court of Appeal to have damages reassessed because an uninstructed jury got it wrong. A plaintiff in such circumstances has the unenviable task of defending the indefensible.
The original sum awarded to the Walkers and their company closely mirrored the £1.5 million awarded to Lord Aldington against Count Tolstoy. The European Court of Human Rights felt that this sum was excessive and that the system which permitted the award of such a sum was indefensible.
How unfortunate then that the new Defamation Bill fails to grasp the nettle of libel damages. The Bill does take some faltering steps to rationalising damages by altering the rule in Scott v Samson (evidence of the plaintiff's previous misconduct), something that would have been very helpful against plaintiffs such as the late Robert Maxwell. It does not, however, deal with the present lottery of damages which can be unjust to both plaintiffs and defendants and can bring the law into disrepute.