Citation Plc v Ellis Whittam Ltd

In claims for slander or malicious falsehood, proceedings may be struck out as an abuse of process where the alleged tort lacks reality and substance and a trial would be disproportionate to what is at stake. A permanent injunction requires an arguable real risk of repetition, supported by the material before the court. A prompt, clear instruction against untrue or defamatory statements may remove that risk.

Potential damages under the Defamation Act 1952, and Article 6, do not require a public trial where no real and substantial infringement is established. An undertaking not to repeat may provide sufficient practical vindication.

Citation and Ellis were competitors providing employment and health and safety advice. Citation alleged that an Ellis salesman had made statements suggesting that Citation could not or would not pay claims and lacked qualified lawyers. Citation brought claims for slander and malicious falsehood, seeking damages and an injunction, although it alleged no actual loss. Ellis denied publication and offered undertakings concerning future statements.

Tugendhat J struck out the action as an abuse of process, finding no arguable risk of repetition and no real and substantial tort. Citation appealed, challenging the treatment of possible further publications, the injunction issue, damages, Article 6 and costs. The central issue was whether the action should be permitted to proceed to trial.

1. Appeal dismissed. The court agreed that the action was an abuse of process. Applying the approach in Jameel v Dow Jones [2005] QB 946, the alleged tort lacked reality and substance and it was disproportionate to commit further court resources to a trial.
2. A permanent injunction required an arguable case of a real risk of repetition, or good ground to fear further publication unless a satisfactory undertaking was given. The court proceeded on the material before it. Ellis had issued an immediate instruction to its entire sales force not to make untrue or defamatory statements about Citation or competitors. There was no evidence that the instruction had been undermined or disobeyed. The reasonable-endeavours wording of the proposed undertaking was a pragmatic response to the sales context and did not itself indicate bad faith or an intention to repeat. The court therefore declined to decide whether the judge had been right to infer further past publications, since that issue was unnecessary.
3. The potential availability of damages under section 3 of the Defamation Act 1952 did not justify continuation of the action. Citation had no evidence of actual damage, a company could not recover damages for distress, and its stated purpose was to obtain an injunction rather than damages. Public vindication after trial was unlikely to be necessary or valuable. Acceptance that the statements should not be repeated was likely to provide equivalent practical vindication.
4. Article 6 added nothing. As explained in Jameel, it did not require a fair and public hearing for an alleged infringement shown not to be real or substantial. The judge’s costs order was also upheld. There was no basis for ordering Ellis to pay the pre-action correspondence costs where liability had neither been found nor admitted, and the costs order relating to the proceedings disclosed no error of principle.

1. Court of Appeal (Civil Division): Appeal dismissed. The strike-out and costs orders were upheld.
2. High Court of Justice, Queen’s Bench Division: Tugendhat J struck out the action as an abuse of process and ordered Citation to pay the costs of the action, [2012] EWHC 549 (QB).