Haji-Ioannou v Mark Dixon Regus Group Plc & Anor

An action for defamation should be struck out as an abuse only in an exceptional case. The court must consider, in the round, whether there is a real and substantial tort and whether the claimant has anything meaningful to gain. A single publication may be substantial, depending on the seriousness of the allegation and the identity of the publisher and recipient. The court should avoid resolving contested facts that properly belong to the trial. High litigation costs, or a likely damages award lower than the costs, do not alone justify strike-out. A claimant’s willingness to waive damages for settlement does not establish that continuation of the action is abusive.

The claimant brought libel and/or slander proceedings against the defendants concerning statements supplied by a public relations firm to a Financial Times journalist. The statements allegedly suggested that the claimant had made unfounded allegations and had lied about discussions concerning a proposed serviced-office business.

The defendants relied on justification and qualified privilege and applied to strike out the action as an abuse of process. They argued that publication was limited, that the claimant had caused or contributed to the publication, and that the likely benefit of continuing the action was disproportionate to its cost. A prior application concerning meaning had been dismissed by Mr Justice Eady on [2008] EWHC 3135.

1. Strike-out principles. The power to strike out for abuse is draconian and should be exercised only in an exceptional case. Applying Jameel (Yousef) v Dow Jones Co Inc [2005] QB 946, the court had to assess whether there was a real and substantial tort and whether the potential benefits of continuing the action were outweighed by its burdens.
2. Assessment of publication and damage. Publication to one person may be trivial in one context but serious in another. The relevant considerations include the nature of the allegation and the identity of the person about whom, and the person to whom, it was made. The allegations concerned dishonesty and were made to a financial journalist for intended publication in an influential business newspaper. It could not safely be inferred at the interlocutory stage that the claimant suffered little or no reputational damage, or that any damages would be trivial.
3. The court should not determine contested facts material to abuse where those facts should be resolved at trial. Issues concerning the claimant’s role in the publication, his state of mind, the timing of his receipt of the defendants’ letter and the availability of mitigation could not properly be resolved on the application.
4. An unsuccessful plea of justification and other aggravating matters could be relevant to damages. The fact that the claimant was prepared to waive damages for settlement did not show that he had no legitimate interest in pursuing the claim to trial. The defendants’ late concession that the claimant had not lied did not provide a proper basis for strike-out.
5. High costs, even where they substantially exceed likely damages, are not by themselves sufficient. The matter had to be considered in the round. The application to strike out was dismissed.
6. Applying the court’s case-management duty under the overriding objective, the proceedings were stayed for a short period to allow settlement negotiations to continue. The parties were permitted to make submissions on the length of the stay.

First-instance decision. The judgment records no appeal from this decision.