Business Energy Solutions Ltd v BES Commercial Energy Ltd

For a trading body, the serious harm requirement under Defamation Act 2013, s 1(2), may be established by proving serious financial loss already caused, likely future serious financial loss, or both. A preliminary trial of that issue may be appropriate where it can be confined and may avoid unnecessary preparation of substantive defences. The court should ensure that the factual and legal case is sufficiently clear to prevent ambush, while avoiding satellite litigation over procedural detail. Formal pleadings verified by statements of truth may be desirable in some cases, but no general rule was laid down.

Three energy companies brought a libel claim against Neil Scrivener concerning five online posts published on two discussion forums. The claimants alleged that the publications accused them of fraudulent, oppressive and dishonest conduct. The defendant accepted, for the purposes of a preliminary issue trial, the meanings alleged by the claimants and that proof of serious financial loss would satisfy the serious harm requirement.

The claimants sought further information under Civil Procedure Rules, Part 18, about the defendant’s case on serious financial loss. They also sought directions concerning their application to strike out the defendant’s counterclaim. The central procedural question was whether the existing schedules and correspondence sufficiently identified the case to be tried.

1. The court directed that serious harm under Defamation Act 2013, s 1(2), be tried as a preliminary issue. For a body trading for profit, the issue could be determined by proof that serious financial loss had been caused or that such loss was likely to occur in the future. The latter was understood as a prospective, probability-based case.

2. The defendant’s factual case in Schedule B was sufficiently clear. The claimants could respond by a counter-schedule identifying admissions, non-admissions and denials. There was no material risk of factual ambush, and the defendant’s legal case had been adequately stated in correspondence.

3. An order requiring a general account of the precise legal and factual challenge under Part 18 was refused. Although formal statements of case verified by statements of truth may often assist in crystallising issues before a preliminary trial, the particular circumstances did not justify laying down general guidance or making the order sought.

4. Any remaining concern about unexpected legal submissions could be addressed by earlier exchange of skeleton arguments, with provision for a reply. The parties were warned against procedural skirmishes and satellite litigation concerning the preliminary issue.

5. Directions were given so that the claimants’ strike-out application concerning the counterclaim could be dealt with at the appropriate stage. No further resources were to be spent on that application until the result of the preliminary issue trial was known in draft.

First-instance application for pre-trial directions in a libel claim. No appellate history was stated in the judgment.