Loutchansky v Times Newspapers Ltd & Ors

A libel claim should not be struck out merely because the defendant contends that an administrative exclusion order will reduce damages to a nominal sum. Where admissibility, relevance and the likely effect of the order on a jury remain uncertain, the court should not assume that only derisory damages would be awarded. The claimant also has a prima facie entitlement to pursue the action to clear his name.

The Court of Appeal will be slow to interfere with a specialist judge’s pre-trial case-management decision, particularly shortly before trial. A stay based on the claimant’s alleged inability to attend trial is not justified where arrangements for attendance have been agreed in principle; any remaining issue is ordinarily for the trial judge.

The claimant brought a libel action concerning allegations that he led a Russian criminal organisation and was involved in nuclear-weapons smuggling and money laundering. The defendants accepted that he had a reasonable prospect of establishing liability, but contended that his exclusion from the United Kingdom by direction of the Home Secretary showed a generally bad reputation and meant that only nominal damages could be recovered.

Gray J in the Queen’s Bench Division refused, on 24 October 2000, to strike out or stay the action. The defendants applied for permission to appeal. They also relied on the claimant’s supposed inability to enter the United Kingdom to give evidence at the trial as a reason for a stay.

The central issues were whether either ruling disclosed a realistic prospect of a successful appeal and whether the exclusion order should presently determine the viability of the libel claim.

1. Application refused. Lord Justice Simon Brown held that there was no realistic prospect of allowing an appeal from Gray J’s refusal to strike out the libel claim. Lord Justice Longmore agreed.

2. The defendants’ analogy between the exclusion order and previous criminal convictions was materially insecure. A conviction is public, final in the relevant sense, and may be raw material for a reputation case. The exclusion order rested on undisclosed sensitive information, was open to challenge before the relevant Commission, and might itself be undermined if the claimant established the falsity of the pleaded allegations. The court therefore declined to rule finally on the order’s admissibility or relevance.

3. Even assuming admissibility, it was impermissible to assume that a jury would award derisory or nominal damages. The claimant also had a prima facie entitlement to bring the action to clear his name, as recognised in Joyce v Sengupta [1993] 1 WLR 373. The recent decision in Burstein v Times Newspapers Limited required further study before any final admissibility ruling.

4. Simon Brown LJ adopted the point made by Brooke LJ on the papers: an appellate court would be especially reluctant, close to trial, to alter case-management directions made by a specialist judge. The trial judge could determine admissibility at trial.

5. The proposed stay had in any event lost its factual foundation. The Secretary of State had agreed in principle that the claimant could attend trial. Even if attendance did not occur, whether that justified standing the case out of the list was for the trial judge, not the Court of Appeal on this application.

• Court of Appeal (Civil Division): The defendants’ application for permission to appeal was refused in [2001] EWCA Civ 92.
• Queen’s Bench Division: Gray J refused, on 24 October 2000, to strike out or stay the claimant’s libel action.