Publish and Be Damned!

As an observer from Canada I am amazed and titillated by the British libel and privacy goings on.

Counsel blithely say London is the libel capital of the world. It may be, but the clients in reported cases act in an extraordinary manner and lawyers feast on costs.

There was a recent libel brawl before a jury and Mr. Justice Eady in July of this year. In this case Richard Desmond, the Express Group chief and owner of adult pay-TV channels (estimated financial worth £950 million?) was the plaintiff.

He sued over the implication made by Tom Bower, in his book about Conrad and Lady Black, Dancing on the Edge, suggesting Desmond improperly published false stories about his enemies.

In the evidence before the jury Desmond’s conduct as a publisher in a previous libel suit was highlighted. A transcript of his telephone conversation with a Mr. Omid was played before the jury. It provided a foundation for the expert evidence of the ex Daily Mirror editor, Roy Greenslade, a professor of journalism at City University, who told the jury Desmond had a worse reputation than any newspaper proprietor since the second world war, including Robert Maxwell.

The Court of Appeal in an interlocutory proceeding sets the stage for the facts in Desmond v. Bower [2009] EWCA Civ 667:

Also exchanged on 22 June 2009 were the basic documents which tell the story about which Mr Bower now seeks to obtain the evidence of Mr Omid (the “Pentagon affair”)… The essence of this material is as follows. Mr Omid is the managing director of a hedge fund called Pentagon Capital Management plc (“Pentagon”). Mr Desmond had invested substantial sums in Pentagon for himself, and a relatively small sum (of £50,000) for his son. In 2007 Mr Desmond withdrew his personal investments but retained the investment for his son. After the recent market collapse Pentagon was required to suspend the ability to repay its investors pending an orderly winding down of its assets. Nevertheless Mr Desmond wanted his son’s investment (most recently valued at £75,000) to be repaid. Mr Omid explained that Pentagon could not show any preference. On 10 July 2008 Mr Omid telephoned Mr Desmond. The call was recorded and a transcript of the telephone conversation is set out in Mr Omid’s particulars of claim. Mr Desmond said that the £75,000 was on his mind all the time. He demanded a cheque for £75,000 or “we are going to be enemies…the worst fucking enemy you’ll ever have”. Mr Desmond put down the telephone as Mr Omid began to respond. On the same day Mr Omid sent Mr Desmond a conciliatory email of explanation and looked forward to a meeting scheduled for a fortnight later. Mr Desmond responded briefly to say that there was no point in a meeting. On 13 July an article appeared in the Sunday Express which is set out in Mr Omid’s particulars of claim and which was alleged to be defamatory of the claimants …

5. The natural and ordinary meaning of the article is that:-

5.1 The Claimants are intending to keep for themselves £1 billion of their investors’ money, while dishonestly promising to return it to them…

5.5 The Claimants have a longstanding and cynical business practice of exploiting their long suffering small investors in order to make massive gains for themselves at their investors’ expense.”

At the actual Desmond v. Bower trial on July 20, 2009 the jury heard a recording of this telephone conversation:

Mr Desmond is heard to say: “It’s 75 grand you know, and I think f*** me, you know, we’ve done so much, you know, business together, you know. Tens of millions of pounds. And we got you know a little, what’s the word, situation over 75 grand. The problem is it’s on my mind you see. It doesn’t matter if it was 75 grand or 75 million, it’s on my mind all the time.”

When Mr Omid tries to explain the “reality” of the situation, Mr Desmond says: “I understand every, I think I understand everything, but it’s on my f****** mind. And it, 75 grand, write a cheque out, we’ll sign it over to you and that’s it. That’s a wrap up our business.”

Mr Omid: “Unfortunately this is not how it works and this is not.”

Mr Desmond: “Please, please Jafar don’t go on because you’re going to aggravate me. So, look, just send me a cheque back, all right, or we, or we’re not going to be friends. In fact, we’re going to be enemies. OK? And you got till, what’s today, Thursday.”

Mr Omid: “Listen, listen.”

Mr Desmond: “No. That’s it mate. Please, because I don’t want to lose my temper with you but I’m not.”

Mr Omid: “It’s not a case of.”

Mr Desmond: “You know what a good friend I am Jafar, don’t you?”

Mr Omid: “I know, this is the whole point, you’ve been so supportive in this, you’ve been.”

Mr Desmond: “Let me tell you mate, let me tell you something, let me tell you something Jafar as good a f******, as good as a friend I am, I am the worst f****** enemy you’ll ever have. Please get me a cheque round, thank you very much.” [Excerpted from The Independent, July 21, 2009 edition, “Court hears tape of Desmond threat: ‘I’ll be the worst enemy you’ll every have’,” by Jan Colley]

This telephone conversation became the torpedo which sunk Desmond in the libel case Omid v. Desmond which settled in February, 2009.

A settlement Statement in that case was read in open court as follows:

13. At the beginning of February 2009 a settlement Statement was read out in court. It contained the following:

“The article alleged that Lewis Chester and Jafar Omid were intending to keep for themselves £1 billion of their investors’ money whilst dishonestly promising to return it to them. It was also alleged that investors had been dishonestly hoodwinked. It was suggested that Mr Chester and Mr Omid had refused to answer legitimate journalistic enquiries. The article also alleged that they together with David Chester have a longstanding and cynical business practice of exploiting their small investors in order to make massive gains for themselves at their investors’ expense.

The truth is that there is no basis for these allegations. In fact information has been provided on a regular basis to investors and very substantial sums have already been returned to them since the decision was made in March 2008 to wind down the funds managed by Pentagon. No attempt was made to put the allegations to anyone at Pentagon before publication of the article. There is no truth in the suggestion that Lewis Chester, David Chester or Mr Omid have prospered by exploiting small investors, to the contrary Pentagon funds have performed well.
What the article did not mention was the involvement of Sunday Express proprietor Richard Desmond. Mr Desmond had investments with Pentagon which were fully refunded in 2007. However a family member had a very small continuing investment which Pentagon advised was not within their control and would have been unlawful to repay. Mr Desmond accepts that it was his comments in the presence of Sunday Express journalists that prompted the Sunday Express to publish the article.

I am pleased to inform your Lordship that a settlement has been agreed between the parties and that the Defendants are here today…to apologise for publishing the article. An apology has been published in the Sunday Express. In addition the Defendants have agreed to pay the Claimants a substantial sum in damages together with their legal costs…”

The jury hearing all this found for Bower. Desmond’s legal costs in his suit against Bower will be in excess of £1,250,000.00 for the nine day trial.

If Desmond had brought this action in Canada punitive damages would flow on an immense scale. There is no limit on punitive damages in Canada if a Court of Appeal feels the conduct is extremely egregious and compensatory damages have not been so vast as to punish the paper. At some point a Court says “X” dollars is too much but the case of Omid v. Desmond would have fetched a mind-boggling award!