Damages for Injury to Feelings in Malicious Falsehood - The Argument is Not Over [George v Cannell and Ano [2024] UKSC 19]

The Supreme Court’s Judgment in George v Cannell on damages for distress in malicious falsehood is fascinating, but dense with legal history. 

John Campbell SC and Jake Rudman distil the key findings and give their take on whether the 3:2 split went in the right direction. 

1. The issue in George v Cannell was whether damages for injury to the claimant’s feelings in the absence of financial loss are recoverable. It is a fascinating case because the SC divided 3 : 2 against, and because the decision pits the rigour of the majority’s logic against the utilitarianism of the minority’s common sense, two values that ought not to – and do not often – come into conflict in the law.
   
   
2. The debate can be framed very simply and in terms that both sides accepted : malicious falsehood is an economic tort protecting against financial loss that historically required proof of financial loss. Section 3(1) of the Defamation Act 1952 (“the 1952 Act”) changed this by providing that it would no longer be necessary to plead and prove financial loss (the meaning attached to the words “special damage” by the SC) if the falsehood was calculated to cause pecuniary damage (a simplification of the two sub-paragraphs of s 3(1) that accord with modern practice). The result is that, on a plain reading of s 3(1) a claimant does not have to prove financial loss (making the tort actionable per se) and the failure to do so results in an award of nominal damages only. It creates an irrebuttable presumption for liability, but not for quantum. The claimant argued that if she proved the tort with the help of s 3(1) presumption, she became entitled to recover damages for a different type of injury – to her feelings.
   
   
3. But the majority held that s 3(1) did not alter or broaden the tort which remained designed to provide a remedy for financial loss. They did, however, accept that as the “tort consists in the infliction of financial loss by maliciously publishing false words” then, if financial loss was proved, damages awarded ought to include compensation for mental distress.
   
   
4. So far there is no disagreement. But then came the majority’s proviso : the mental distress must have been caused by the financial loss, because otherwise “it is not an injury caused by the tort”. The minority characterised this less narrowly as compensation “for mental distress caused by the tort”.
   
   
5. The difference between the majority and the minority, therefore, was whether the distress was required to be caused by financial loss or by the malicious falsehood. The majority saw no difficulty in segmenting mental distress into that part attributed to the loss and that part attributed to the falsehood. The minority viewed that distinction as illogical, asking “[H]ow is the party or the court going to be able to isolate which mental distress was caused only by the financial loss as opposed to the mental distress caused by the commission of the tort?” They concluded that once “the tort is actionable per se that role for pecuniary loss falls away”.
   
   
6. We conclude with a preference for the minority for three reasons. First, because while Lord Leggatt’s majority judgment is steeped in scholarship, it tends towards intellectual rigidity (rather than rigour) in bifurcating the financial loss from the tortious conduct that caused it. Second, the idea that any claimant could honestly compartmentalise mental distress in the way suggested by the majority, seems fanciful. Third, the majority’s reasoning is inconsistent because they hold financial damage as an essential element of malicious falsehood while accepting that the tort is actionable per se.
   
   
   
   

   29 June 2024