George v Cannell and another

The Supreme Court considered the scope and effect of section 3(1) of the Defamation Act 1952 in an action for malicious falsehood. The court held that where section 3(1) applies the statute creates a forward‑looking legal presumption that the published words were calculated to cause pecuniary damage, such that the tort is actionable per se for liability purposes; that presumption is concerned with financial (pecuniary) loss and is to be assessed by reference to facts known or which reasonably ought to have been known to the publisher at the time of publication.

However, the majority concluded that the presumption of pecuniary damage is irrebuttable for the purpose of establishing liability but does not convert that presumed loss into recoverable non‑pecuniary loss. Where no actual financial loss is found, only nominal damages are appropriate. The majority further held that damages for injury to feelings are recoverable under the tort only where they flow from pecuniary damage caused by the publication (or by exceptional aggravating conduct), and on the facts no such link or aggravation existed; the Court therefore ordered nominal damages of £5.

This appeal concerned whether section 3(1) of the Defamation Act 1952 (which dispenses with the need to allege or prove "special damage" in certain actions for slander of title, slander of goods or other malicious falsehood) operates to make malicious falsehood actionable per se and whether it permits recovery of damages for injury to feelings when no pecuniary loss has in fact been caused.

Background and procedural history

• The claimant, Fiona George, had worked for LCA Jobs Ltd and left to join another recruiter; the first defendant, Linda Cannell, published false statements to two third parties that the claimant had breached post‑employment obligations.
• At first instance Saini J found the statements were false and malicious but caused no financial loss; he dismissed the malicious falsehood claim, holding section 3(1) did not assist the claimant.
• The Court of Appeal allowed the appeal, holding that section 3(1) applies, that it justified an inference of pecuniary damage and that the claimant could recover compensation for injury to feelings; the matter was remitted for assessment of damages ([2022] EWCA Civ 1067).

Issues framed

1. Does section 3(1) render malicious falsehood actionable per se and if so what is the legal effect?
2. Is the statutory test of whether words are "calculated to cause pecuniary damage" to be assessed by reference to facts at the time of publication (forward‑looking) or to subsequent events established at trial (historical)? What facts are relevant?
3. Whether damages for injury to feelings are recoverable where section 3(1) applies but no actual pecuniary loss has been caused, and whether aggravated damages are available.

Court’s reasoning and outcome

• The majority interpreted sections 2 and 3(1) together and held that the phrase "it shall not be necessary to allege or prove special damage" has the same effect in both provisions: it presumes the pecuniary damage necessary to found the cause of action where the statutory conditions are met, thereby rendering the tort actionable per se for liability purposes.
• The court adopted a forward‑looking test: whether, at the time of publication and judged by facts known or that ought reasonably to have been known to the publisher, the words were objectively likely (ie more probable than not) to cause pecuniary damage. Facts known only to the publishee or private post‑publication events are excluded from that inquiry.
• The presumption of pecuniary damage created by section 3(1) is irrebuttable for the purpose of establishing liability, but proof (or disproof) of actual financial loss remains relevant to quantum: where no actual financial loss is shown, only nominal damages should be awarded.
• On the availability of mental distress damages the majority held that the tort remains essentially economic; damages for injury to feelings are recoverable only where they flow from pecuniary loss caused by the publication (or as aggravated damages for exceptionally contumelious conduct). Because the judge found no financial loss and no exceptional aggravation, only nominal damages of £5 were awarded.

Wider observations The court commented that section 3(1) addresses evidential difficulty in proving pecuniary loss but does not convert an economic tort into protection for personal or emotional interests; Article 10 considerations did not require a different interpretation.

Appeal allowed. The majority held that section 3(1) of the Defamation Act 1952 creates a forward‑looking legal presumption that words of the statutory kind are calculated to cause pecuniary damage (assessed by reference to facts known or reasonably to be known to the publisher at the time of publication), making malicious falsehood actionable per se for liability purposes; that presumption is irrebuttable as to liability but, if no actual financial loss is proved, the claimant is limited to nominal damages; damages for injury to feelings are recoverable only where they flow from pecuniary damage caused by the tort or, exceptionally, as aggravated damages for contumelious conduct, and on the facts no such compensable distress or aggravation was established, so only nominal damages of £5 were awarded.

Appeal from the Court of Appeal [2022] EWCA Civ 1067, which reversed the decision of Saini J at first instance in the High Court, Queen's Bench Division [2021] EWHC 2988 (QB). The Court of Appeal had allowed the claimant's appeal and remitted the case for assessment of damages; the Supreme Court allowed the defendants' appeal in part and awarded nominal damages.