Forum shopping and the high price of humour: Harrods v Dow Jones

In our December 2002 early warning we reported the Australian decision of Gutnick v Dow Jones. Dow Jones have now fallen foul of the UK courts on another jurisdictional issue as a result of the judgment of Mr Justice Eady handed down in the High Court on 22 May.

On 31 March 2002 Harrods issued a spoof press release proposing a ‘first-come-first-served share option offer’ by way of an April Fool’s joke. The Wall Street Journal picked up the press release with a story headed ‘The Enron of Britain?’ The article suggested that ‘If Harrods, the British luxury retailer, ever goes public, investors would be wise to question its every disclosure.’

The evidence before the court was that only ten copies of the Wall Street Journal are distributed in this country from the United States. There was evidence of only a very small number of hits on the article as published on the web. By contrast, the Wall Street Journal has a national distribution within the United States of approximately 1.8 million copies.

The question before the court was whether in these circumstances Harrods was entitled to commence litigation in this country, which they were keen to do since the First Amendment of the United States Constitution effectively ruled out any such litigation in the United States.

After considering a question of service, Eady J addressed the question of whether the English company could protect its trading reputation in respect of publications taking place within this jurisdiction, even when they were so very few in number.

Dow Jones relied heavily on the comment of Lord Justice Scott in Kroch v Rossell: ‘it would be ridiculous and fundamentally wrong to have these two cases tried in this country on a very small and technical publication, when the real grievance of the plaintiff is a grievance against the widespread publication of the two papers in the respective countries where they are published.’

Mr Justice Eady noted two distinctive elements to the UK law of defamation. One is that ‘even though a newspaper’s primary circulation may be in one or more foreign jurisdictions, English law recognises that there may also be separate publications in other jurisdictions, each being sufficient to found a separate cause of action. Thus, however limited and technical it may appear, there have been publications within this jurisdiction which are arguably tortious and which give rise to a cause of action here.’

The other well established principle to which he made reference is that in the UK law of defamation, damages are presumed, and therefore in order to succeed in an action for defamation, there is no onus on the claimant to prove loss. The judge concluded:

‘I …take the view that these English publications relating to an English corporation, however limited and technical, are most conveniently dealt with in an English court. As a matter of fact, that seems to coincide with the view of the learned Judge in the District Court of New York.’

The decision is in line with the UK judgment in the Berezovsky case, and the Australian judgment in Gutnick v Dow Jones. It seems then that however limited the publication in the UK of a defamatory statement which is predominantly published overseas, UK courts will allow an individual corporation based in this country to bring proceedings for libel in this relatively claimant-friendly jurisdiction. Although Harrods is likely to recover only nominal damages, there is a logic and value to these proceedings as part of a general policy of aggressive PR to ensure that the media is wary of publishing negative material about Harrods or its associated companies.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.