Corporate defamation claims and claims against anonymous parties

Brett Wilson LLP partner Iain Wilson is interviewed by Susan Ghaiwal.  This article was first published on Lexis® PSL IP&IT on 24 September 2015.

Does Brett Wilson LLP v Persons Unknown highlight how courts should approach anonymity in online cases? Iain Wilson, partner at Brett Wilson LLP, explains that the judgment shows courts recognise the harm that anonymous online publishers can cause and are thus prepared to deal with such cases in a robust and proportionate manner.

The case

Brett Wilson LLP v Person(s) Unknown, Responsible for the Operation and Publication of the website www.solicitorsfromhelluk.com [2015] EWHC 2628 (QB), [2015] All ER (D) 78 (Sep)

The Queen’s Bench Division allowed the claimant's application seeking default judgment pursuant to Civil Procedure Rules (CPR) 12.3(1) and 12.4(2). It also allowed the summary disposal of the case pursuant to the Defamation Act 1996, s 8  with the relief of damages, an injunction.  That was despite the fact that the defendants were not present at the hearing or represented.

What is the background to this case?

The claim concerned the publication of defamatory content on a ‘Solicitors from Hell’ website referred to in the judgment as ‘SFHUK.com’. This is a website which purports to allow third parties to ‘name and shame’ solicitors that they believe have let them down. It is run anonymously and is a ‘successor website’ of www.solicitorsfromhell.co.uk which ran between 2006 and 2011.

The claimant, Brett Wilson LLP, is a niche law firm specialising in defamation, privacy and harassment law. It is particularly well known for its involvement in cases involving online publications. One such case was The Law Society & Ors v Kordowski [2011] EWHC 3185 in which it acted for the Law Society and other claimants in a class action against the operators of the original ‘Solicitors from Hell’ website.

The owner/operator of the original website, Rick Kordowski, was the subject of a considerable amount of litigation between 2010–11 (no less than 18 libel claims by solicitors and law firms defamed on the website). These culminated in the class action in 2011, which resulted in the original website being shut down.

The instant claim saw the claimant itself being targeted on SFHUK.com. Attempts to identify the owner/operator had been successful. The claimant sued ‘Person(s) Unknown, Responsible for the Operation and Publication of the website [SFHUK.com]’ and, with the court’s permission, served proceedings on the proxy registrant of the website by email. The libel claim related to both a specific ‘review’ of the firm and the general inclusion of the claimant on the website. No defence or acknowledgment of service was filed/served within the requisite time period. The claimant sought default judgment under CPR 12.4(2) together with a permanent injunction and summary relief in the form of capped damages under s 9 of the Defamation Act 1996.

How did the court deal with the fact that the defendant in this case was unknown?

A jurisdiction for suing ‘persons unknown’ is expressly contained within CPR 55.3(4) in relation to claims against trespassers. The common law has developed to allow proceedings to be constituted in such a way in harassment and privacy/confidentiality cases. Warby J noted that the legitimacy of suing ‘Persons Unknown’ had been recognised for over a decade, provided that the unknown persons could be identified by a description which had sufficient certainty. This was achieved in the instant case by the claimant by suing ‘Persons Unknown responsible for the operation and publication of the website [SFUK.com]’. A final order could be obtained against such a defendant, as had occurred in Novartis Pharmaceuticals UK Ltd v Stop Huntingdon Animal Cruelty & Ors [2014] EWHC 3429 (QB).

A major obstacle in suing ‘persons unknown’ is ensuring service of proceedings on the defendants (such being necessary to conclude proceedings). Warby J referred to the case of Kerner v XY [2015] EWHC 178 (QB) and [2015] EWHC 1247 (QB), which highlighted the difficulties. In the instant case, the claimant had at the outset of the case sought permission from Master McCloud for service by an alternative method, namely by email on the proxy registrant ‘Anonymous Speech’ (an apparently nomadic/supranational organisation which allows parties – including the owner/operator of Solicitors From Hell – to register websites anonymously). Warby J agreed that it was reasonable to infer that documents sent by email to the proxy registrant would be brought to the attention of those running SFHUK.com. He concluded that the defendants had been properly served with notice of the application and had chosen to ignore the proceedings because they were ‘hiding’ and wished to remain anonymous.

It was noted that the claimant and the Law Society had sought and obtained a Norwich Pharmacal Order against Anonymous Speech requiring it to identify the owner/operator of Solicitors from Hell, but that this had not been complied with. Furthermore, Anonymous Speech claimed on its website to ignore court orders from the EU and US. This left the claimant with no alternative but to adopt the route taken.

Was the claimant, a corporate claimant, able to demonstrate serious financial loss as required by the Defamation Act 2013?

CPR 12.11(1) provides that ‘Where a claimant makes an application for a default judgment, judgment shall be such judgment as it appears to the court that the claimant is entitled to on his statement of case.’ Warby J himself had recently set out the approach the court should take in Sloutsker v Romanova [2015] EWHC 2053 (QB), holding it was not necessary or desirable to consider the merits of such a claim in any detail. It was nevertheless necessary for the court to be satisfied in defamation cases that the defamatory meanings pleaded were not wildly extravagant (Warby J held they were not extravagant and that the meanings plainly had a defamatory tendency) and that the necessary ingredients of the cause of action had been made out.

Section 1(1) of the Defamation Act 2013 provides that ‘a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant’. Section 1(2) provides that ‘For the purposes of this section, harm to the reputation of a body that trades for profit is not “serious harm” unless it has caused or is likely to cause the body serious financial loss.’

Warby J held that the firm had suffered financial loss. He was led to this conclusion by various factors pleaded in the particulars of claim and adduced in evidence, including:-

(i)         the prevalence of prominent Google search results for six months, caused by the publication, which warned prospective clients against instructing the firm;

(ii)        that the publication would inevitably be read by a number of prospective clients who typically undertook ‘due diligence’ before instructing solicitors;

(iii)       that it was inevitable that a number of prospective clients would not instruct the firm because of the publication;

(iv)       that the loss of a single instruction could cost the firm tens of thousands of pounds (and in some instances more);

(v)        that one prospective client had indicated he wished to withdraw instructions after having read the publication;

(vi)       that it could be inferred that a far greater number had done likewise and not notified the claimant;

(vii)      that the claimant was a boutique/relatively small law firm; and

(viii)     the claimant had asserted that it had suffered financial loss.

Warby J held that all the matters taken together were sufficient to make out a case of serious financial loss. He commented that ‘“Serious” is an ordinary English word. I would only add that whether loss is serious must depend on the context.’ This it seems might suggest that whether there has been ‘serious financial loss’ will turn on the relationship between the turnover of a corporate claimant and the financial harm being suffered. What might be serious financial loss for a boutique law firm, might not be serious financial loss for a Magic Circle firm.

This is the first case to come before the court in which it has been necessary to consider the new s 1(2) threshold for corporate claimants. The judgment suggests that the test for ‘financial loss’ is not as strict as some practitioners predicted it might be and that the court will examine matters in the round.

What was the court’s decision?

Having decided that the claimant had suffered financial harm and that the defendants were ‘editors’ for the purpose of s 10 of the Defamation Act 1996, the court entered judgment for the claimant. Warby J then proceeded to consider damages under s 9 of the Defamation Act 1996 on the basis of the pleaded case.

Whilst summary relief under ss 8 and 9 of the Defamation Act 1996 is an underused procedure, it is a convenient and proportionate way of disposing of a claim of this nature. In Loutchansky v Times Newspapers Ltd [2001] EWCA Civ 1805 the Court of Appeal confirmed that this procedure could be used at any point, including after liability had been established.

Warby J considered several authorities, including two libel judgments concerning the original Solicitors from Hell website and the recent case of The Bussey Law Firm PC & Anor v Page [2015] EWHC 563 (QB) in which a US law firm was defamed by an individual on Google maps. Warby J agreed that the maximum award of damages permitted under the s 9 procedure, £10,000, was amply merited on the facts of the case.

Warby J granted a mandatory injunction requiring removal of the content and metadata and a prohibitory injunction preventing the republication of the same or similar content. He additionally ordered the defendants to pay the claimant’s costs summarily assessed in the sum of £15,000.

Given that the original ‘Solicitors from Hell’ website was closed down by the High Court in 2011, how effective do you think this ruling will be? 

The claimant brought proceedings because of the ongoing damage that was being caused by prominent and toxic search engine results generated by the publication.

Principally, an injunction was necessary to provide to online intermediaries (eg search engine operators such as Google) to support a request that they filter the offending content. Whilst this is not the same as the content being removed from the World Wide Web, the effect of something being delisted from search engines is often the same.

An award of damages (even if unsatisfied) is something the claimant can point to in vindication of the false libels.

Finally, in the event of the defendants being identified, the claimants will be able to apply to vary the name of the defendants in order to enforce the order. This was recently confirmed in Tardios & Anor v Linton (aka Patricia Carpenter) [2015] EWHC 1429.

Is this ruling a positive step for those wishing to take action against those who post defamatory content online and use anonymity services to hide their identity?

This decision shows that the court recognises and understands the harm done by anonymous online publishers and is willing to deal with such claims in a robust and proportionate manner. The judgment, which is understood to be the first libel damages award and final injunction against Persons Unknown, provides a roadmap for parties in a similar position who feel they have no alternative but to take action.