Arran Coghlan & Anor v Lexlaw Limited

In determining the meaning of allegedly defamatory words, the court must identify the single natural and ordinary meaning which a hypothetical reasonable reader would understand from the publication read as a whole. That meaning may include reasonable implications or inferences, but excludes strained interpretations and meanings dependent on extrinsic evidence. Context and the mode of publication are relevant.

A meaning is defamatory at common law only if it tends to lower the claimant in the estimation of right-thinking people generally and would have a substantially adverse effect on how people would treat the claimant. A solicitor’s letter asserting an equitable lien over litigation proceeds, without casting aspersions on the client’s conduct, does not necessarily meet that threshold.

The claimants had retained Lexlaw under a conditional fee agreement in professional negligence proceedings. They terminated the retainer before those proceedings concluded. Lexlaw then wrote to the solicitors acting for the opposing parties, asserting an equitable lien over the fruits of the litigation and requiring payment of its fees from any settlement proceeds.

The claimants sued in defamation, breach of fiduciary duty, misuse of confidential information and breach of data protection rights. Nicklin J directed a preliminary trial under CPR 3.1(2)(i) and (j) and CPR PD 53B para 6 concerning the natural and ordinary meaning of the letter, whether it contained fact or opinion, and whether it was defamatory at common law. Only those preliminary issues were determined.

1. The court determined the natural and ordinary meaning by reference to the hypothetical reasonable reader. The publication had to be read as a whole, in its context and having regard to its mode of publication. Intention was irrelevant, and extrinsic material bearing on truth was inadmissible. The principles in Jones v Skelton [1963] 1 WLR 1362 and Koutsogiannis v Random House Group Ltd [2019] EWHC 48 (QB) were applied.

2. The judge first read the words complained of to form a provisional view of their meaning before considering the pleaded cases and submissions, following the approach in Tinkler v Ferguson [2020] EWCA Civ 819.

3. The letter was a straightforward communication between litigation solicitors. Its natural and ordinary meaning was that the claimants had entered into a conditional fee agreement; Lexlaw had an equitable lien in the fruits of the litigation; BLM Law was required to discharge Lexlaw’s fees from any settlement sums before paying the claimants; and Lexlaw would enforce the lien if that did not occur.

4. The letter contained statements of fact rather than opinion. It did not suggest that the claimants had acted dishonestly, were unable to pay, or intended to evade their obligations. Any reader who inferred such aspersions would be avid for scandal.

5. Applying the common-law requirements summarised in Millett v Corbyn [2021] EWCA Civ 567, the meaning neither tended to lower the claimants in the estimation of right-thinking people generally nor had a substantially adverse effect on how people would treat them. The defamation claim was therefore dismissed. The other causes of action remained to be determined.