Money transfer business accused of being evasive over fraud concerns wins libel damages

Mr Justice Nicol, sitting at the High Court, has awarded a total of £40,000 damages in a libel claim where a television broadcast company wrongly alleged that a money transfer business had been investigated for fraud.

In Kadir & Anor v Channel S Television Ltd [2014] EWHC 2305 (QB), the Claimants, Barakah UK Ltd and its former director, Hafiz Abdul Kadir, sought damages from the Defendant, Channel S Television Ltd, after the news report aired on 27 December 2011.  The station whose audience is drawn from the UK Bengali community had reported that the Company, based in Whitechapel, had closed down after being investigated for fraud and that two of its employees had been arrested in connection with those allegations.   In fact, the company had closed for the afternoon after the morning trade had been slow and there had been no investigation or arrests.  The Company had, however, been the victim of a robbery on 5 December 2011 in which some £310,000 had been stolen.

The Company produced accounts which demonstrated a decline in business since the broadcast had aired.  The Claimants estimated that around 3,500 people had viewed the programme.  Mr Justice Nichols commented that the news broadcast was like to have had ‘a seriously detrimental effect’ on the Company’s trading reputation and that it would have ‘seriously undermined the confidence which the customers could have in it’.  Although Mr Kadir did not seek to suggest that the broadcast had accused him of having perpetrated a fraud, he did plead that the report portrayed him as someone who had dealt with the suspicions of fraud in a highly evasive and incompetent manner.  This was particularly damaging and hurtful to him as he is known as a religious scholar in his community.  He had stood down as the director of the Company after the broadcast because of these imputations.

The Court had entered default judgment against the Defendant after it failed to submit a properly pleaded defence.  Mr Justice Nicol lamented the ‘cavalier approach’ that the Defendant had taken to the litigation and took the view that a counterclaim which it had raised aggravated the injury to Mr Kadir.  He awarded £20,000 in damages to Mr Kadir personally and £20,000 to the Company; the Defendant also undertook not to publish or re-publish similar allegations.