Defamation damages explode

by Resolve editor Kate Tilley

Punishment, disguised as aggravated damages, is behind huge defamation payments in Australia, barrister Rob Anderson QC told the Qld Insurance Law Intensive.

He said judgement amounts were increasing and a $400,000 cap for general damages was now irrelevant because courts were making higher awards by using aggravated damages.

The latest awards were “off the scale and disproportionate to where damages should be”.

Of 39 judgements from 1 January 2016 to July, 34 were $300,000 or less and 25 of those ranged from $100,000 to $300,000. But four more-recent awards were from $600,000 to $850,000.

In May, actor Geoffrey Rush was awarded $850,000 (under appeal); Perth barrister Lloyd Rayney, who was accused by WA police of being the “prime” and “only” suspect in his wife’s murder, received $600,000; actor Rebel Wilson $600,000 (reduced from $650,000); and Qld’s Wagner family $850,000.

Aggravated damages were additional amounts, taking Mr Rush’s total payment to $2.9 million. Ms Wilson’s initial total damages, before the appeal, was $4.6 million.

The Qld Supreme Court found broadcaster Alan Jones and radio stations 2GB and 4BC defamed four Wagner brothers in a series of radio broadcasts in 2014 and 2015.

The Wagners received $3.75 million in total. Mr Jones and the stations had claimed, among other things, the brothers were responsible for 12 deaths in the 2011 Grantham floods when a quarry wall on their property collapsed.

After a seven-week, judge-only trial, Justice Peter Flanagan found 27 broadcasts  conveyed “extremely serious” defamatory allegations.

Mr Anderson was counsel for the defendants in the Wagner case.

He told the Qld intensive: “Until the Geoffrey Rush decision, I saw the Wagner case as the outlier. It covered a vast array of aspects of their personal and professional lives and had been going on for a long time and was therefore aggravation.”

Section 35 of the Defamation Act capped general damages at $400,000, unless aggravated damages were warranted. “A court may order … damages for non-economic loss that exceed [the cap] … if, and only if, the court is satisfied the circumstances of the publication … are such as to warrant an award of aggravated damages.”

But Mr Anderson said Wilson v Bauer Media in 2017 meant “prior certainty was now in disarray”.

The court found Ms Wilson was entitled to aggravated damages because the magazine failed to properly investigate the source’s claims, “the source had an axe to grind and the allegations were repeated to boost sales”.

“Is this just exemplary damages by a different name? Are these large judgements just punitive?” Mr Anderson said.

He questioned whether courts had lost sight of the Act’s s34 requirement that “the court is to ensure an appropriate and rational relationship between the harm sustained and the amount of damages awarded”.

Conventional wisdom had been aggravated damages was a “top up on general damages” at an uplift of 20%-30%.

The change exposed several problems:

1.  Aggravating features do not always warrant the kind of disparity now seen
2. If two cases were materially identical, but one had a relatively minor feature of aggravation, the cap could be ignored. Will it have aggravated the harm to the extent measured in the difference in damages?
3. pleading truth could be inhibited.

Mr Anderson said it was now difficult to predict the exposure because aggravation could occur during the proceedings. “A publisher could increase the harm through the experience of going to court.”

Federal and state/territory Attorneys-General were reviewing the Act, but there had been many changes since the review began. For example, the 12-month limitation that started from publication day was “almost irrelevant” because of online publishing. “Is the publication day the date it’s downloaded and read?”

Mr Anderson said special damages awarded for economic loss were another contentious issue.

In Lloyd Rayney v WA, barrister Mr Rayney argued that, from the date of publication to the date he was charged, three years later, there was specific evidence of diminution in income with instructions withdrawn (the loss was fees written off) and Mr Rayney’s work had dried up.

Mr Rayney estimated that, but for the publication, he would have worked 2,000 hours a year. He sought $11 million and was granted $1.25 million (under appeal).

Mr Anderson said legal practice income was relatively capable of prediction by referring to historical records, but, for actors like Ms Wilson and Mr Rush, it was more difficult.

“Geoffrey Rush argued he felt his career was over and he couldn’t seek work,” he said.

“A lack of evidence [for special damages] doesn’t seem to be a barrier. The action need only be ‘a’ cause, not ‘the’ cause.”

In Wilson v Bauer Media, $3.5 million in special damages was removed on appeal, which was “an unsurprising result”. Mr Anderson said the original award was based on two key inferential findings: that the articles had been read in America and that had caused Ms Wilson to lose movie roles. But a “lack of evidence on these points was fatal”.

Barrister Anastasia Nicholas told the Qld intensive defamation law was preoccupied with damages but, in many cases, damages “are an inept remedy because they may not be an effective way to restore reputation”.

There was a deadlock between an individual’s interest in their reputation, and freedom of expression and an ability to publish in an open transparent way.

“When a complaint is made, a plaintiff wants publication to stop and they want vindication and a correction, ie an apology or retraction,” Ms Nicholas said.

But publishing online meant articles “live on in perpetuity and there are no geographical boundaries”. Social media enabled quick, easy sharing.

Ms Nicholas suggested remedies other than damages were injunctive relief, or apologies and retractions.

But injunctive relief was “notoriously difficult to get”.

Apologies and retractions “can be one of the most powerful tools in your arsenal”.

Ms Nicholas said Geoffrey Rush had offered to settle for an apology and $50,000 plus costs. Nationwide News did not respond, and he eventually was awarded $2.9 million plus costs.

An apology could have real value for a plaintiff because they got vindication direct from the defendant, not via a court. “A settlement comes from the insurer, an apology direct from the defendant’s mouth,” Ms Nicholas said.

An apology therefore had “a psychological attraction”.