England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE COMYN)

		Royal Courts of Justice Wednesday 20th February 1985

1. LORD JUSTICE STEPHENSON: The defendants are the proprietors and publishers of the News of the World, a national newspaper with a very large circulation in England and Wales. They appeal against a jury's award of exemplary damages amounting to £250,000, which they were ordered to pay to ten police officers by Mr. Justice Comyn on 9th February 1984 for libel contained in an article which they published in every edition of their newspaper on 16th July 1978.
2. As drawn up and perfected the judgment provided that the defendants pay the plaintiffs the sum of £253,000 with the costs of each of the plaintiffs of the action to be taxed. There shoulc have been a judgment for payment of the sum of £25,300 to each of the ten plaintiffs with costs, in accordance with the jury's answers to the two questions they were asked:

(1) For whom do you find, the plaintiffs or the defendants?

(2) If for the plaintiffs what damages for each plaintiff?

3. The sum of £25,300 was in each case made up of £300 compensatory damages and £25,000 exemplary damages, as stated by the jury in answer to a question from the learned judge.
4. By a notice of appeal, which has been amended by a supplemental notice under Rules of the Supreme Court 0.59 r.7(l)(b) and re-amended by leave of the court at the hearing of the appeal, the defendants appeal only against the award of the £250,000, those ten awards of £25,000, on 13 grounds. They do not appeal against liability or against the award of £3,000, those ten awards of £300. The plaintiffs cross-appeal against the award of only £300 to each of them, and ask for a new trial as to their entitlement to compensatory damages if a new trial is ordered. That has led the defendants, who were asking for the award of exemplary damages to be quashed or alternatively for a new trial as to the plaintiffs' entitlement to exemplary damages, to ask in the further alternative (in the event of both the appeal and cross-appeal being allowed) for a new trial to be ordered as to liability and damages.
5. The trial of the police officers' action took a long time to come to trial, largely through an unfortunate misunderstanding on the part of their solicitors and through no fault of the defendants or their advisers. It originated in a letter to the defendants, written on his behalf and signed by one David John Brain of his own free will according to its postscript, and received by them as long ago as 12th July 1978. The letter stated that he was the father of the missing child Mark Brain (who had been taken from his mother's home in Oxford) and pleaded with the defendants to help them in a case where he was being accused and charged with offences against his wife; offences of raping and badly treating his wife which had, he alleged, been committed by the Banbury CID; that strong evidence against Banbury CID had gone missing, apparently because of a sexual approach by a detective whom he named, and that his wife was too terrified to give evidence against certain CID officers of Banbury. He said that the newspapers and A10 (Scotland Yard's Police Discipline Department) were the only ones that could help and prove his innocence and on the sixth page of what was a rather rambling letter he said he would get in touch with the defendants once his story had been printed and would give the address of Mark and himself and the names of the witnesses. He ended with the sentence "I am living on the edge of my nerves, in the name of God help me".
6. The defendants promptly and properly sent a copy of this letter to the police. The day after the defendants received it Brain and his son were traced to a house in the Oxfordshire village of North Aston near Banbury and the so-called siege began. Brain was then holding his son and a woman hostage with a shotgun and a knife in deference to the allegations made against the Banbury CID in his letter, the siege was conducted by officers of the Thames Valley Police Force. After the woman held hostage had been voluntarily replaced by a friend of Brain and several days had passed during which he frequently shouted that he had grievances against the police, called for newspapers and asked to speak to a News of the World reporter, he surrendered peacefully. He subsequently pleaded guilty at Reading Crown Court to various offences, including unlawful possession of a firearm, and was detained at Broadmoor Hospital under an order made under S.60 of the Mental Health Act 1959 on 25th June 1979. At the committal proceedings he publicly withdrew his allegations against the police.
7. It is unnecessary, and inadvisable, to read the article of which the plaintiffs complain. It opened with a quotation of the last sentence of Brain's letter which I have already quoted, and stated that the letter revealed "a mind tormented by suspicion". It made copious extracts from the letter, including its allegations against the Banbury CID, but omitted the name of the officer mentioned in the letter. It ended with quotations from what the reporter had been told by Mr. Colin Smith, assistant chief constable of Thames Valley Police - that Brain's words kept changing from relatively calm to quite agitated and the police were "making a thorough investigation of the allegations in the letter sent to the News of the World". The article was not advertised by placard or poster or on television, but it appeared on the front page of every copy in every edition under the heading in very large heavy type: "EXCLUSIVE: SIEGE MAN TELLS US WHY HE DID IT".
8. The Banbury CID numbered at the time twelve officers (there is no evidence that the defendants or their reporter knew the number), including the officer named in the letter and one woman. The woman made no complaint; the named officer made a complaint but took no proceedings. The remaining ten brought their action by writ issued on 3rd May 1979 claiming damages and an injunction. Their claim included (in paragraph 6 of their statement of claim) a claim for exemplary damages in these terms:

"The Plaintiffs hereby give notice that at the trial of this action they will invite the Court to award exemplary damages on the basis that the Defendants published the words complained of with guilty knowledge, in the sense that they were obviously defamatory on their face, for the motive that the chances of economic advantages outweighed the chances of economic penalty. The Plaintiffs will invite the Court to draw this inference as to the Defendants' notice from the eye-catching headline and the prominence which the article was given, which can only have been for the purpose of boosting the newspaper's sales".

By amendment they added a claim for aggravated damages in these terms:

"Further, the Plaintiffs will rely in aggravation of damages upon the Defendants' omission to report Brain's public withdrawal at his committal proceedings of the allegations which he had made against the Plaintiffs in the letter he sent to the Defendants and also upon the Defendants' omission to report the praise of the Judge at Brain's trial for the way in which the police had handled the case".

9. By their defence of 15th June 1979 the defendants denied that the words complained of referred to, or were capable of referring to, the plaintiffs and were defamatory or capable of being defamatory; and they also pleaded qualified privilege by virtue of S.7(l) and paragraph 12 of Part II of the Schedule to the Defamation Act 1952, altered by amendment to a plea of qualified privilege at common law. They specifically denied that the plaintiffs were entitled to aggravated or exemplary damages.
10. The judge rejected the defendants' plea of qualified privilege at the end of the evidence and they do not appeal on that point. They maintained throughout that the article was not defamatory of the plaintiffs because no reasonable reader could take its allegations seriously but would regard them as the outpourings of a mentally disturbed man. The question of defamatory meaning was left to the jury and decided against them by the jury; there is no appeal on that point either. They also maintained and still maintain that the plaintiffs are not entitled to exemplary damages. The judge ruled against their counsel's submission that he should direct the jury that they could not award exemplary damages because there was no evidence on which such an award could properly be based; the jury did award them and the first issue in this appeal is whether this ruling was right. (There is no argument on aggravated damages and no means of ascertaining whether the jury awarded any).
11. Involved in the first question whether there was any evidence from which the jury could properly infer a case for exemplary damages is the question whether the defendants, in the person of Mr. Shrimsley, the editor of the News of the World who authorised publication of the article, believed, contrary to the jury's view, that no reasonable reader could take Brain's allegations published in the article seriously.
12. The second question raised by the appeal is whether, if there was evidence of a case for exemplary damages for the judge to leave to the jury, he misdirected the jury in summing up the issue of exemplary damages. The third question is whether, if there was evidence and adequate direction on exemplary damages, the £250,000 awarded as exemplary damages by the jury was so excessive as to constitute a verdict which no reasonable jury could after an adequate direction properly come to.
13. If the appeal succeeds on any of these three issues, we may have to consider the question raised by the plaintiffs' cross-appeal, which is whether the plaintiffs should have the opportunity of getting a jury to increase the damages of £3,000 which this jury has given because a direction by the judge may have led the jury to include in their award exemplary damages a sum which they could and should have awarded as aggravated compensatory damages.
14. The plaintiffs' claim for exemplary damages was correctly pleaded in accordance with Rules of the Supreme Court 0.18 r.8(3) and the authorities. In Rookes v. Barnard, [1964] AC 1120, 1221, Lord Devlin with the concurrence of all their Lordships set out the principles governing the award of exemplary damages in civil actions and defined the three categories of case in which exemplary damages for tort could be awarded. In Broome v. Cassell [1972] AC 1027 their Lordships by a majority upheld an award of exemplary damages for libel and expounded in seven speeches how Lord Devlin's principles should be applied to an action for defamation. An examination of those eight speeches confirms my opinion that any judge would be thankful not to have to direct a jury on this issue and would not envy Mr. Justice Comyn the particularly difficult task of directing the jury to consider whether Lord Devlin's second category applied to this case and what the effect on their verdicts of applying it should be. He did not avoid the task by accepting the submission of counsel for the defendants that he should withdraw the issue from the jury; and the task with which his ruling on that submission left him was made, as I think, yet more difficult by the fact that the jury had ten plaintiffs and ten verdicts to consider - a fact which was not, as far as I can judge, considered by any of their Lordships in Rookes or Broome, or in any other reported case, with two possible unhelpful exceptions, to which I shall refer.
15. According to the law as it stands, the plaintiff who seeks exemplary damages asks a jury in a civil case, under the direction of the judge, to do what a jury in criminal case cannot do, namely, to assume the function which a judge has to perform in a criminal case (however much he might like to transfer it to the jury), and to punish the defendant (or defendants) by awarding a financial penalty, commonly and inevitably regarded as a fine. (A recommendation by the Royal Commission on Capital Punishment in 1953 that the judge's function should be transferred to the jury in capital cases to a limited extent (Command 8932) was successfully opposed).
16. The jury have to decide first whether the defendants' conduct deserves punishment and then what that punishment should be. The first is a task which juries used to have to undertake in criminal cases of what was called "motor manslaughter", when directed by judges in accordance with the direction given in Regina v. Bateman, [1925] 94 Law Journal, King's Bench 791, 793 that the prosecution must establish that

"the negligence of the accused went beyond a mere matter of compensation between subject and subject and showed such disregard for the life and safety of others as to amount to a crime against the state and conduct deserving punishment".

17. I used to doubt if such a direction made much sense to a jury, but at least they did not have to decide what was the appropriate penalty to impose in the rare event of a conviction. And in deciding on the appropriate penalty or fine a judge in a criminal court has to assess it separately from any compensation which a defendant may be ordered to pay and the fine will be paid into the coffers of the state, whereas the compensation will be paid to the victim of the crime. But in a civil court the jury have to consider first whether the sum which they award the victim of a tort as compensation is itself adequate to punish the defendant without more, and if, and only if, it is not do they go on to consider an increased award to teach the defendant (and others) that the tort does not pay. But any such increase will not go into the public purse but will go as compensation into the pocket of the victim; indeed it is not to be regarded as an additional sum added to the compensation (pace Lord Devlin, [1964] AC 1228), but as an unidentified part of a round sum from which the jury can, if asked, by a feat of subtraction identify the smaller sum they would have awarded for compensation only (according to Lord Hailsham of Marylebone, Lord Chancellor, [1972] AC 1082 D). Furthermore, in all (or almost all) cases where a jury have to consider exemplary or punitive damages, and whether to punish or make an example of a defendant by the sum they award a plaintiff, they have also to consider something called aggravated damages (which many distinguished judges have blundered into thinking were the same thing as exemplary damages).
18. If that is the state of the law on exemplary damages, it may not be helpful to rate them an anomaly but it necessarily creates a state of affairs which cries aloud, in my judgment and that of others, including Sir Neville Faulks' Committee on Defamation, for Parliamentary intervention. But that cry has been unanswered. The Report of that Committee (Command 5909) has been, unfortunately, a dead letter and no effect has been given to its ten years old recommendation (in paragraph 360) that Parliament should remove the right to give punitive damages so far as defamation actions in England and Wales are concerned and so bring the law into line with the law of Scotland. We have therefore to decide whether the judge and jury have on the evidence in this case discharged their difficult duties so badly that their verdict has done the defendants substantial injustice, which must be put right by this court reducing their awards to a total of £3,000 or ordering a new trial.
19. I make no apology for not exploring the cases in the detail in which they have been helpfully discussed in argument, both before the judge in the presence of the jury and in this court; for the relevant law is concisely, correctly and comprehensively stated better than I could hope to state it on one page in the current edition of Duncan and Neill on Defamation, paragraph 18.27, p.136.

"(a) Exemplary damages can only be awarded if the plaintiff proves that the defendant when he made the publication knew that he was committing a tort or was reckless whether his action was tortious or not, and decided to publish because the prospects of material advantage outweighed the prospects of material loss. 'What is necessary is that the tortious act must be done with guilty knowledge for the motive that the chances of economic advantage outweigh the chances of economic, or perhaps physical, penalty'.

"(b) The mere fact that a libel is committed in the course of a business carried on for profit, for example the business of a newspaper publisher, is not by itself sufficient to justify an award of exemplary damages.

"(c) If the case is one where exemplary damages can be awarded the court or jury should consider whether the sum which it proposes to award by way of compensatory damages is sufficient not only for the purpose of compensating the plaintiff but also for the purpose of punishing the defendant. It is only if the sum proposed by way of compensatory damages (which may include an element of aggravated damages) is insufficient that the court or jury should add to it enough 'to bring it up to a sum sufficient as punishment'.

"(d) The sum awarded as damages should be a single sum which will include, where appropriate, any elements of aggravated or exemplary damages.

"(e) The plaintiff can only recover exemplary damages if he is the victim of the punishable behaviour.

"(f) A jury should be warned of the danger of an excessive award.

"(g) The means of the parties, though irrelevant to the issue of compensatory damages, can be taken into account in awarding exemplary damages.

"(h) where a number of persons are sued the question of exemplary damages has to be considered by reference to the least guilty of the defendants".

Only sub-paragraph (h) has no relevance to this case, where there is not a number of persons who are sued but a number of persons suing; and there is no sub-paragraph treating of such a case.

20. The plaintiffs' pleaded case followed with the slightest variation of language sub-paragraph (a) and the language of Lord Hailsham quoted there. The first question therefore is whether such of the facts pleaded as were given in evidence amounted to evidence from which a jury could reasonably infer such guilty knowledge and such a motive in the editor of a newspaper carried on for profit, if they had in mind that that was the business of a newspaper which would always have a profit motive in publishing any item of news: see sub-paragraph (b). If there was no such evidence, the judge should have directed the jury not to award exemplary damages.
21. I have to confess that I approach the answer to this first question as a question of there being any evidence (other than what has been imprecisely but intelligibly described as a scintilla of evidence), not of there being any evidence which the judge believes or thinks the jury ought to believe. I have never thought that the obiter dictum at the end of the judgment of the Court of Criminal Appeal in Regina v. Young, [1964] 1 WLR 717, 720 that judges should more often assume the responsibility of saying to a jury that it is not satisfactory evidence on which they could convict, and accordingly direct an acquittal, should be interpreted as a licence to the judge to usurp the jury's function of deciding all questions of weight and reliability. And that applies to all jury cases, civil or criminal, and to questions of inference, what is a reasonable or safe and proper inference to draw from the evidence whose weight and reliability they have to assess. I share the judge's belief, expressed to the jury in leaving the issue of exemplary damages to them (III 25E) that as much should be left to a jury as possible in these cases and they should not be turned into a lawyer's chess table.
22. What was the evidence from which the judge decided that the jury could infer that the case fell within Lord Devlin's second category for exemplary damages? Inference it had to be, for it was the state of mind of the defendants' servants which the jury had to decide if their conduct was to justify punitive damages and that must be mainly if not entirely inferred from what they said or did.
23. The evidence for the defendants, if believed, took the case out of that category. It was first the evidence of Mr. Mount, the defendants' reporter, who was present at the siege with a photostat copy of the letter, and of Mr. Shrimsley, the then editor of the News of the World, who was responsible for publication, that they did not believe that anyone could take Brain's allegations against the Banbury CID seriously. Mr. Mount said he was a "nut case" and did not think anybody really believed there was a word of truth in his allegations (II E 62 D, 78 F). Mr. Shrimsley said that when the question of publication had to be considered he regarded Brain as a plainly demented man with his finger on a shot-gun; and that was why he did not report them, manifestly absurd as they were, to A10 or attempt to investigate them, for instance by contacting Brain's wife (II 86 A, 90 E, 94 G, 95 E, 96 G, 97 D): the context in which they were published, indeed the opening sentence and nature of the letter itself, made it abundantly clear that they were a product of a deranged mind (II 101 A). So he thought no injury or harm would be done to the plaintiffs by publishing Brain's allegations (II 109 E).
24. Their view was to some extent shared, or at least supported, by evidence given by some of the plaintiffs themselves. Detective Chief Inspector Riches agreed that anyone seeing the article would have got the immediate impression that Brain was deranged (I 12 D). So did Detective Sergeant Brain (I 22 C).
25. But Mr. Riches was not consistently so positive, nor were any other plaintiffs who gave evidence.
26. Both Mr. Mount and Mr. Shrimsley also gave evidence of another motive for publishing extracts from the letter in the article. Mr. Mount said they thought it might help to end the siege if they granted Brain's wish to print his letter in detail (II 71 C, 72 E). Mr. Shrimsley said he thought it might take Brain's finger off the trigger and prevent him killing police officers or hostages whose lives were in danger (II 87 D, 92 B), (101 G, 109 D). That consideration was uppermost in his mind (II 107 B). It is fair to recall that that evidence repeated what had been published in the News of the World on 26th August 1979.
27. Now the particulars of qualified privilege pleaded in the defence contained, as amended, the following paragraphs:

"the Defendants published the words complained of in the News of the World with the knowledge and consent of Mr. Colin Smith and without malice towards the Plaintiffs and in the hope that once his grievances had received the publicity which he was demanding David Brain would give himself up and the risk of bloodshed would be avoided.

"Mr. Colin Smith or some other senior Police Officer (whom the Defendants cannot identify) on the 15th July 1978 said to Mr. Ron Mount, who is a journalist employed by the Defendants, that he would make sure that a copy of the next day's News of the World would be sent to David Brain so that he could see that his grievances had been aired".

Detailed further and better particulars were given of those paragraphs and the words "and consent" were deleted.

28. In considering the defendants' evidence, and in particular the evidence of this public-spirited motive, the jury were entitled to consider that most of the defendants' pleaded case on the point was destroyed by the evidence of Mr. Colin Smith, then the assistant chief constable of the Thames Valley Police Force directing the siege, that he did not know Mr. Mount and had no recollection of Mr. Mount's asking him for comments on the desirability of publishing Brain's letter (II 30 F, 35 F-G, 39 D-F). When Mr. Mount came to give evidence, he maintained that he had spoken to Mr. Smith, but said that Mr. Smith made no objection but gave him no encouragement as regards publication (II 64 A).
29. The plaintiffs rested their case for exemplary damages on the article itself and its position with "the eye-catching headline including 'exclusive'" on the front page of an edition distributed nationwide. Mr. Shrimsley knew Brain's allegations to be untrue and admitted that when he put the story on the front page he took account of the possibility that they might be sued for libel (II 101 G, 108 A). And the jury were entitled to disbelieve the evidence of a public-spirited motive and to ask why it was put forward if not because the real motive was a cynical calculation that the sales of the newspaper with the article on the front page would justify any risk of paying damages. They were entitled to believe that the defendants never sought, and certainly never got, approval from a responsible police officer for publishing Brain's allegations and published them recklessly without knowing or caring what effect publication might have on his resistance. The police thought Brain's allegations serious enough to merit a thorough investigation, according to the article. If the jury thought, as they must have done, that the article was defamatory because ordinary readers would take Brain's allegations seriously, why should they accept the evidence of an intelligent and experienced editor that he believed his readers would not take them seriously?
30. The plaintiffs' case, as put to the jury by Mr. Eady, was this:

"If you think in effect that the newspaper knew that what was being published was defamatory and knew that it was untrue, as clearly they must have done, but decided to put the story out to its readers on the front page nonetheless, in order to sell newspapers; if in other words you think that the newspaper was selling the reputation of these men in the Banbury CID for profit, then you would be entitled, as the body of men and women who set the standards in these matters, to award such damages as you think appropriate to mark disapproval or to signify deterrence. If you think that this was an example of Fleet Street at its worst, at its most callous in relation to the individual, and an example of blatant Fleet Street opportunism, then you would be entitled to mark that by an award of exemplary damages".

31. In my judgment there was evidence from which the jury could, if properly directed,' properly draw the inference as to the intention and motive of the defendant in the person of their experienced editor which Mr. Eady was asking them to draw. There was evidence of the requisite guilty knowledge and cynical calculation to be left to the jury; the judge was right to leave the question of exemplary damages to them and this ground of appeal fails.
32. But the jury needed a careful direction on this difficult question. Did they get it? Did the judge misdirect them? For this next ground of appeal to be made out more than niceties of analysis are required and the defendants have to show misdirections substantial enough to invalidate a jury's verdict: Blackshaw v. Lord, [1984] 1 QB 22 E. But a judge's direction on exemplary damages requires a careful statement of both the law and the evidence relating to the claim for them: such a direction as was given by Mr. Justice Widgery in Manson v. Associated Newspapers Ltd, [1965] 1 WLR 1038 in more than four printed pages of the report; and this case of ten plaintiffs required a direction that they should take the six steps suggested by Lord Justice Parker in argument and embodied in his judgment. In the light of those directions Mr. Justice Comyn's direction demands the thorough examination to which it has been subjected in argument, and I must read it in full. Mr. Justice Comyn said this :

"And then third, members of the jury, we come back to our old friend, exemplary damages. Members of the jury, I cannot help thinking of another semi-slang expression to describe exemplary damages. Exemplary damages are, I would suggest, where a publisher of a book or a publisher of a newspaper says that the game is worth the candle. 'We are gong to get more out of publishing this than we are ever going to have to suffer from libel actions or anything else. The game is worth the candle'. I need hardly tell you that these are not the words which are set out in the legal textbooks, nor by a lot of the quotations we have heard.

"Members of the jury, the quotation in question is that you can add exemplary damages where the defendant has deliberately committed a libel with the intention of gaining some advantage which he calculates will outweigh any sum which he would have to pay to the plaintiff by way of compensation. It really came to the fore in a case a few years ago called Broome v. Cassell, where there was a book which was grossly libellous and where it was held by a jury, and went all the way up to the House of Lords that the conduct was so outrageous in publishing the book that there would have to be punitive or exemplary damages, because in fact a calculated risk had been taken. The author and the book publisher had felt, if I may use my phrase again, that the game was worth the candle.

"Now, to look finally at the question of damages: the exemplary damages claimed here are in relation to the general conduct of the News of the World; all the matters that I have mentioned and the way they have run the case and have never even had the grace to apologise. They have made allegations, it is said, that were reckless; for example, for a while they alleged that they had Mr. Smith's permission and indeed command to publish the letter. It is also said that their level of journalism in this regard was hypocritical and that they were publishing to increase their circulation generally, especially heading their story 'exclusive , but really aiming to put in the juicy bits which were about the Banbury CID.

"Exemplary: should they be made an example of for this? Should it be a case for a punitive award, a punishment, over and above the rest?

"Now, a few more words about damages: compensatory, aggravated, exemplary. Remember that you are giving them to ten separate plaintiffs. There has been no suggestion that you should give more to one plaintiff than to another. It is a matter for you. You have heard the individual plaintiffs. If you think one is worth of more than another, well, you will do that. But their counsel does not ask for that and you may think it will be one award, the same award, for each of them. Where you would have to do some thinking is to say, will compensatory damages which vindicate them suffice or should there be something for aggravation - no apology and so forth - or should there be in addition something exemplary.

"I said nobody could question your verdict, but you will have remembered from the argument that I have established my right, if I so wish, to ask if any part of your award is exemplary and, if so, how much is exemplary. But you may not come to the question of exemplary damages; you may not come to the question of damages at all".

33. Mr. Alexander contends that the summing-up was fundamentally effective in a number of important respects.
34. The judge should have told the jury that as exemplary damages were punitive, they were highly unusual and only to be -rarely awarded in civil cases:

"it is only in quite exceptional cases that it becomes the function or right of a jury to go beyond an assessment which is purely compensatory and add an assessment which is intended to be punitive":

Manson's case, per Mr. Justice Widgery, [1965] 1 WLR 1042 H. The judge gave no indication that an award of exemplary damages was a "rare bird".

35. He should have told them that there was a heavy burden on the plaintiffs to prove the necessary guilty knowledge and calculation. He never mentioned either the party on whom the burden rested or what was its standard in relation to exemplary damages; he merely gave a general direction early in his summing-up that the burden of proof was upon the plaintiffs to show on balance, not beyond all resonable doubt, that their points were right.
36. (a) He should have explained that the jury must be satisfied that both the elements of guilty knowledge and the motive that the chances of economic advantage outweighed the chances of financial penalty were present when the editor published Brain's allegations. That meant that the defendants' servant Mr. Shrimsley knew that the article was defamatory, that is damaging to the plaintiffs' reputation, because it would be taken seriously by its readers.

(b) In addition he should have explained that it was not enough to show that the defendants in the person of Mr. Shrimsley thought that the defendants would make a profit out of the publication: he should have followed Mr. Justice Widgery's direction in Manson'a case, [1965] 1 Weekly Law Reports at p.1043 F-H:

"Of course, a newspaper is always publishing for profit. It is the purpose of a newspaper to make money and build up circulation. You must not go away with the idea that because of that any libel in a newspaper is a libel for which exemplary or punitive damages must be awarded. If a newspaper, in the ordinary way of business, publishes news in regard to a particular item and happens to make a mistake, the mere fact that it is publishing for profit does not open the door to an award of exemplary or punitive damages. The only cases (and they must be very exceptional, you may think) in which exemplary or punitive damages are permissible are those cases where the jury is satisfied that the publication was done with a deliberate, calculated view to making a profit out of that publication and ignoring the fact that damages might be payable because they would be so small, at any rate so small in relation to the potential profit".

The judge's thrice used paraphrase, "the game is worth the candle", was inadequate and misleading, even when expounded by the sentences

"we are going to get more out of publishing this than we are ever going to have to suffer from libel actions or anything else" and "you can add exemplary damages where the defendant has deliberately committed a libel with the intention of gaining some advantage which he calculates will outweigh any sum which he would have to pay to the plaintiff by way of compensation";

and even when supplemented by the reference at the end of the summing-up to the News of the World thinking it was worth adding to their circulation by publishing this particular story.

37. He should have told the jury that if, and only if, the sum which they had a mind to award as compensation (including aggravation) was inadequate to punish the defendants,, could they award a larger sum: Rookes v. Barnard, [1969] AC at p.1228, per Lord Devlin. All he did was to ask the jury "should they be made an example of for this? Should it be a case for a punitive award, a punishment, over and above the rest?" and to tell them near the end of his summing up "you will consider whether compensatory damages will be enough".
38. He positively misdirected the jury in telling them that the exemplary damages claimed were

"in relation to the general conduct of the News of the World; all the matters that I have mentioned and the way they have run the case and have never even had the grace to apologise".

Those matters were matters of aggravation on which the judge had fully and fairly directed the jury earlier in his summing-up. This confusing direction might therefore be understood by the jury as an invitation to take those matters into account twice over, both in assessing aggravated damages and in assessing exemplary damages, and so made double counting a real and dangerous possibility. 6. He should have warned the jury to exercise restraint and give moderate damages even when punishing the defendants. True that when he came to the second issue of damages he gave the jury a model general direction in these terms:

"if it is, to your mind, a serious libel you will then consider for each plaintiff what is proper, reasonable, fair compensation; compensation which will show that it was a serious libel and will vindicate the particular plaintiff. But be reasonable, above all, members of the jury. Keep your feet on the ground. Do not let yourself be blown away by any over-emotion. Give fair and reasonable compensation, sufficient to vindicate properly and fully the reputation of the police officers".

That direction he repeated at the end of his summing-up in this form (I have already quoted its opening words):

"If you think it is a serious libel, you will consider whether compensatory damages will be enough; if so, how much they should be, bearing in mind that you must be reasonable and bearing in mind that you have ten plaintiffs, each to get the same amount. Bear in mind the question of whether they should be aggravated; are there aggravating circumstances or are they sufficiently taken into account in compensation? Should there be exemplary damages?"

But unfortunately he did not apply his direction that the jury must be reasonable to their award of exemplary damages. So the jury could have understood him as directing them to be reasonable in awarding compensatory damages, even when aggravated, but to discard reasonableness when making an example of the defendants.

39. Furthermore, the judge failed to make a point to the jury which he was never asked to make and which, I am satisfied, was first made in counsel for the defendants' "skeleton" argument in the appeal. As embodied by re-amendment by leave of this court it is:

"that, if they came to award exemplary damages, the total sum awarded in the action should not exceed the total amount which the defendants should pay by way of punishment and that, having fixed that total amount, the jury should then divide it by the number of plaintiffs in the action".

40. Finally, the judge failed to put the defendants' case on exemplary damages to the jury and to remind them of the evidence of Mr. Mount and Mr. Shrimsley, and of the plaintiffs Riches and Brion, to which I have referred;

(a) that the former did not intend to defame the plaintiffs but believed that no one had taken Brain's allegations against the plaintiffs seriously; and

(b) that they considered that publication of his story would meet his demand that his grievances should be fully publicized and so lessen the risk of his doing violence to anyone during the siege.

As to (a), the judge had put this defence in relation to liability very clearly in these terms:

"Then on the other side you have the News of the World journalists, responsible, long-term journalists, including their editor, Mr. Shrimsley, saying that this was a responsible article and it quoted part of the letter in the firm belief that nobody in their right senses would believe what was set out about the Banbury police; they would regard it simply as the outpourings of a 'nut case'. They say that to read the background alone, the fact that there was a siege, was enough to show that. They say that to read what he actually said is to show that he was mad and that nothing he said could be relied on and that no reasonable person would rely upon it".

But he never repeated that defence in relation to exemplary damages. Indeed he again told the jury that if they took that News of the World point of view they would find for the defendants.

As to (b), he never mentioned the point, though he did refer to the fact that "for a while they alleged that they had Mr. Smith's permission and indeed command to publish the letter".

41. Mr. Alexander's novel point, which I have numbered 7, is a point on which there is admittedly no authority. The only reported cases of awards of exemplary damages to more than one plaintiff are White and Another v. Metropolitan Police Commissioner, reported in the Times Newspaper 24th April 1982, where Mr. Justice Mars-Jones awarded £20,000 exemplary damages under Lord Devlin's first category to each of two plaintiffs, man and wife, for false imprisonment, assault and malicious prosecution by several police officers; and Guppy's (Bridport) Ltd v. Brooking and James, [1983] 269 EG 846, where this court upheld on appeal from a county court two awards of £2,000 in favour of each of two tenants against their common landlords, each sum being a single sum to include exemplary damages. But the point does not appear to have been taken in either case according to the reports of them or according to my imperfect recollection of the latter case. However, once it is taken it seems to me to be right beyond argument. A defendant in a civil case may deserve to be punished more heavily for libelling two or ten plaintiffs than for libelling one, just as the defendant in a criminal case may merit severer punishment if guilty on more than one count of an indictment. But although a defendant convicted of more than one offence may receive consecutive or concurrent sentences, yet it is the total amount of the punishment which has to be fair and not excessive; so it is the total amount of any increase of damages for punishment which must not be unreasonable and excessive for the purpose of expressing disapproval of a tortious defendant's conduct and deterring him from repeating it. In this case it was common ground that there was no difference between the ten plaintiffs and that each should be awarded the same sum, as the judge directed. At once that exposes the defendants to the risk of the jury fixing £X as the proper total amount of the increase necessary to punish the defendants and then awarding it to each plaintiff, thus multiplying, as obliged by the judge's direction, the sum which they had thought adequate to teach the defendants that such a libel does not pay. Without a direction to divide £X, who is to say whether the jury's £250,000 is £X or £10X?
42. If, as I think, the judge's agreed direction might have been misunderstood as a direction to multiply £X by ten, I do not see how the jury's awards of £25,000 can stand. This point of Mr. Alexander's is likely to arise only in the unusual situation of a limited number of plaintiffs claiming damages for one and the same libel or slander. It furnishes yet another complication engendered by the survival of the right to exemplary damages and another argument in favour of abolishing the right. But if it was a point for the jury to consider, the judge's totally excusable failure to tell them to consider it was, in my judgment, a serious non-direction. I feel bound to add reluctantly that it does not, in my view, stand alone.
43. I cannot accept Mr. Eady's reduction of the misdirection described in the point I have numbered 5 to a slip which could not have misled the jury into double counting. I appreciate the force of his submission that it may have misled them into wrong labelling only; in other words they took the matters of aggravation into account in reaching their punitive figure of £25,000 instead of using them to increase their compensatory figure of £300: accordingly the total of £25,000 would have been the same if the judge had not misdirected the jury in this way; and Mr. Eady referred us to the words of Mr. Justice Windeyer in Uren v. Fairfax, [1966] 117 Commonwealth Law Reports 118, 152 which were cited by Lord Hailsham in Broome v.Cassell, [1972] AC 1081 C:

"Telling the jury in a defamation action that compensation is to be measured having regard to aggravating circumstances the result of the defendant s conduct might not result in a verdict different from that which they would return if they were told that because of that conduct they could give damages by way of example".

44. This submission bears upon the third question raised by the appeal and upon the cross-appeal. In my judgment it cannot enable us to disregard this misdirection when considering the second question. I have to add that in spite of Mr. Eady's submissions that the summing-up was in other respects adequate, Mr. Alexander's criticisms in points 1, 3(b), 4 and 8(b) have substance also. Points 2, 3(a), 6 and 8(a) would not individually, in my opinion, entitle the defendants to a new trial; but taken with the other errors of omission and commission I think that they add to the probability that some substantial wrong or miscarriage has been thereby occasioned. I note that neither point 1 nor point 2 figures in the page I have quoted from Duncan & Neill, or in Lord Hailsham^'s speech in Broome v. Cassell, [1972] AC 1081 -2; but I think that a judge should stress point 1.
45. Mr. Eady has attempted to cure any defects in the summing-up by imputing to the jury an understanding of the submissions made in their presence which would have filled any gaps and corrected any errors in the summing-up on such matters as: the elements of Lord Devlin's second category; what Mr. Justice
46. Widgery said in the passage I have quoted from Manson's case; double counting; the need for restraint in relation to compensatory and punitive damages. He submits that the judge's reference to "our old friend, exemplary damages" indicates the jury's familiarity with the topic. I agree with the judge in deciding (without objection) to hear counsel's submissions on the law in the presence of the jury, because I have always thought it desirable to allow a jury, who have been summoned, often at considerable inconvenience, to try cases in court, to spend as much time in the jury box as possible and as little time in the jury room as possible. Jurors may feel cheated and discouraged by being excluded from hearing what the lawyers are saying about the case which they themselves have been sworn to try.
47. But I cannot suppose that, however wakeful and intelligent the members of this jury were, they can have followed and digested the law as laid down in numerous passages from Rookes v. Barnard, Broome v. Cassell and other authorities, no doubt read with a rapidity suitable for the learned judge, who had the works in front of him, but I suspect wholly unsuited to the apprehension of a layman without the advantage of the text before him or the legal training of judge and counsel behind him. I notice without surprise that, at the end of the 22nd page of the 28 pages in which counsel's submissions and dialogue with the judge are transcribed, the judge said to Mr. Eady after a long quotation from Broome v. Cassell: "how laymen are expected to take all that in I simply do not know". I wonder whether at the end of the submisisons they were not in the state of confusion picturesquely described by Lord Justice Russell in another appeal by the publishers of a Sunday newspaper against an award of exemplary damages, Broadway Approvals Ltd. v. Odhams Press Ltd (No. 2), [1965] 1 WLR 805, 825:

"To a comparative newcomer, the law of libel seems to have characteristics of such complication and subtlety that I wonder whether a jury on retiring can readily distinguish their heads from their heels".

48. Even if still capable of making that important distinction, this jury cannot have taken in enough of what they had been told by counsel and judge about exemplary damages or they would not have asked if they could give the punitive damages to a police charity. The question and the judge's answer in the negative should have been recorded and transmitted to this court so that we should not have to rely on counsel's recollection of them. But I cannot draw any further conclusion from the jury's question as to their state of mind except that they appreciated the anomaly of paying the penalty part of their award to the plaintiffs but were still confused as to their duty. When they asked the question they may or may not have decided on the total amount of their award or awards and whether any amount should be divided or multiplied.
49. I have already quoted from Mr. Eady's closing speech for the plaintiffs. In his closing speech for the defendants Mr. Gray said this:

"The second thing you have got to be satisfied about is that, when the decision was taken to publish, the defendants knew jolly well that they were libelling these plaintiffs; in other words, they had that kind of guilty knowledge. Now, Mr. Shrimsley dealt with that, I suggest, in one sentence in his evidence when he said, 'I didn't expect anyone to take these allegations seriously'. If you believe there is any truth in that, that rules out guilty knowledge of the kind that you have to be satisfied existed before you can award these peculiar kind of damages called exemplary damages; because that kind of a fine is very unusual; it is very rare for exemplary damages to be awarded and it is only for really a very serious case where you have a newspaper behaving so badly as to deserve to be fined that exemplary damages are awarded".

50. If the substance of both those passages had found a place in the summing-up, there would have been much less room for criticism of it. But the jury must take the law from the judge, not from counsel, even when it has been submitted in the same terms by counsel on both sides. There may be cases where it can safely be presumed that a jury had in mind something which counsel had said and the judge had not repeated. But any important matter of law must be the subject of a direction by the judge, however obvious and often repeated. In a criminal case a jury will be told ad nauseam where the burden of proof lies and what its standard is. But if a judge omits to direct them that what they have heard from counsel about those fundamental matters is right and must be applied, the jury's verdict of guilty cannot stand. Nor, in my judgment, can this jury's verdict.
51. As there was an impeccable direction on compensatory damages and substantial and serious misdirection on exemplary damages, the ten awards of £25,000 must be set aside, and the question of exemplary damages be decided by another jury in a new trial, unless the parties consent to this court fixing them under Rules of the Supreme Court 0.59 r.ll(4). If there is to be a new trial as to exemplary damages only, or damages only, under Rules of the Supreme Court 0.59 r.ll(3), or as to liability and damages, it is unnecessary to determine the third question; namely, whether the jury's award of damages, in effect the £250,000 because the £3,000 is not challenged by the defendants, is not excessive and so unreasonable that it can and must be set aside. I am, however, of the opinion that it ought to be set aside on this ground also and that we ought to say so.
52. A quarter of a million pounds sterling is a very high award, far exceeding any sum that has ever been awarded for damages in actions for defamation. It is the award of a jury, not a judge, and therefore almost invulnerable to interference by an appellate court. This court can only set it aside if "it was one which no twelve reasonable jurors could have awarded if they had properly directed their minds to the evidence and been properly directed as to the relevant considerations and principles by the judge". That is what I said in Blackshaw v. Lord, [1984] QB 27 F, where all three Lords Justices, after a comprehensive review of the relevant authorities, stated the same principle in slightly different terms when reluctantly upholding an award of £45,500 compensatory damages. I make no apology for repeating my statement without further elaboration. I remain of the opinions which I expressed in that case, including my opinion that little assistance is to be found in awards for personal injuries. I would say the same of fines for contempt of court, which Mr. Eady enlisted for comparison and guidance. Bearing in mind other awards in defamation cases and the effect of inflation on the pound sterling, but chiefly the facts of the plaintiffs' case put at its highest, I feel also bound to regard the jury's award as inordinately high. Serious though Brain's allegations were, and seriously as, on the jury's verdict, they were likely to be taken, to the knowledge of those responsible for the article, by readers of the News of the World's reproduction of them, the defendants did not placard or advertise them in advance, they omitted the the only name which they contained, the allegations were not referred to in the headline of the article, and they must have been less damaging to the reputation of the individual plaintiffs than • they would have been if they had not come from an obviously crazy man, or if they had referred to persons identifiable by a wider public than local people and other police officers. I cannot myself see how twelve reasonable men and women could have thought it reasonable to impose so heavy a penalty, even on the proprietors and publishers of a newspaper with an immense circulation, in order to mark public disapproval of their conduct or to prevent future defamatory publications, if they had kept in mind - no easy task - all the proper considerations, including the need for moderation even in punishing presumably wealthy defendants. And I am not satisfied that they intended to award more than £25,000 by way of exemplary damages.
53. I would therefore allow the appeal on this ground also.
54. As to the cross-appeal, for my part I find it difficult to suppose that the awards of £300 could have included aggravated damages and taken account of such matters as the defendants' failure to publish Mrs. Brain's denials of her husband's allegations and his subsequent withdrawal of them. Making every allowance for such moderating factors as there were and for the dispassionate manner in which we were told the case before the jury was argued and tried, so small a figure as £300 strikes me as ludicrously inadequate to vindicate a police officer's reputation in the eyes even of a comparatively limited number of persons who have been found likely to take seriously serious allegations irresponsibly made. But though the small size of that compensatory award, like the large size of the punitive award, indicates that something has gone very wrong with the jury's assessment of damages, the compensatory awards were made after a correct summing-up on that aspect of damages and the plaintiffs have a strong case for retaining the verdict of the jury for those damages and also on liability, where again the summing-up cannot be faulted.
55. I would like to hear counsel further before deciding what if any order for a new trial the court should make.

LORD JUSTICE PARKER:

Were the awards of Exemplary Damages excessive?

56. In Broome v. Cassell, [1972] AC 1027, the jury had awarded the plaintiff a total of £40,000 damages for the publication of a grave libel on a distinguished retired naval officer appearing in a book concerning the fate of a war-time convoy. Of that sum £15,000 was expressed to be compensatory damages and £25,000 "by way of exemplary damages". The appeal by the defendant to the House of Lords concerned the issue of exemplary damages only, as does the defendants' appeal to this court in the present case. The award of £25,000 for exemplary damages was at the time the highest such award ever made. Until this case it remained so. It was awarded in a case where the jury had taken such a grave view of the libel itself and surrounding elements of aggravation that they considered the very substantial sum of £15,000 as the sum which the plaintiff ought to receive to compensate him for the injury suffered and restore his reputation. It was under twice as much as such sum and the total award of £40,000 which the jury considered to be the sum which the defendant ought to pay by way of punishment was under three times as much as such sum. Four members of the House of Lords held that the amount arrived at by the jury was not beyond that which twelve reasonable men could award. Three came to the opposite conclusion. As a result the House refused by a majority to interfere on the ground that the award was excessive. It is however plain that even the majority regarded the award as coming very near to the point when the courts would be entitled to interfere and would themselves have awarded far less.
57. In the present case the awards of £25,300 to each plaintiff of which only £300 was attributable to compensation, including all elements of aggravation, mark a new departure. They result in a total award of £253,000 of which a mere £3,000 was considered sufficient to compensate all the plaintiffs for the injury to their reputations including all elements of aggravation. The exemplary part is, both individually and in aggregate, 83 times the compensatory part and the total award is, both individually and collectively, some 84 times the compensatory part. Both the total amount of the award and its relationship to the damage suffered by the plaintiffs suggest strongly that something must have gone seriously wrong, for the punishment must bear some reasonable relation to the gravity of the "crime".
58. I have little doubt that had the jury awarded in Broome v. Cassell 83 times the amount of the compensatory award by way of exemplary damages, or £1,245,000; or had they awarded for compensation one eighty-third part of the £25,000 in fact awarded for exemplary (some £300) the House of Lords would have had no hesitation in setting aside the award as being one at which no reasonable jury properly directed could have arrived.
59. Assuming for the present that the jury were properly directed I would myself, even bearing in mind the limited circumstances in which a court can properly interfere with the verdict of a jury which were stressed by their Lordships in Broome v. Cassell, have no hesitation in setting the awards of exemplary damages aside. In that case, at p.1106, Lord Dilhorne expressed the view that the £25,000 for exemplary damages over and above the £15,000 compensatory damages was "out of all proportion to the facts". In the present case I consider that the exemplary awards of £25,000 totalling £250,000 are out of all proportion to the facts. In my judgment therefore, even if the directions to the jury are unassailable there would have to be a new trial at least as to exemplary damages.
60. In reaching the above conclusion I have had in mind that, whereas the second of the three considerations mentioned by Lord Devlin militates against very large awards, the third of such considerations, namely the propriety of taking into account the means of the parties, would in the present case justify a jury in concluding that a substantial sum should be awarded. So also would the fact that the article appeared in all editions of a national newspaper.
61. I cannot however accept that these considerations can possibly justify a punishment as great as £250,000 for the infliction of £3,000 of injury on the plaintiffs, the more particularly as the headline made no reference to the defamatory matter, to which the judge referred as the "juicy bits". They might justify a ratio of exemplary to compensatory higher than that in Broome v. Cassell, for a total award of, say, £9,000 might possibly be considered insufficient to punish and deter a newspaper, but £250,000 is anothei matter altogether.

Should the issue of exemplary damages have been left to the Jury?

62. In Broome v. Gassell at p.1081 Lord Hailsham said:

"A judge should first rule whether evidence exists which entitles a jury to find facts bringing a case within the relevant categories and if it does not the question of exemplary damages should be withdrawn from the jury's consideration".

63. It is common ground that in the present case the relevant category is the second category set out in Lord Devlin's speech in the House of Lords in Rooks v. Barnard, [1964] AC 1120. In the light of the submissions made in argument it is necessary to set out in full the passage at pp.1226/7 where Lord Devlin describes the second category:

"Cases in the second category are those in which the defendant's conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff. I have quoted the dictum of Erie C.J. in Bell v. Midland Railway Co. Maule J. in Williams v. Currie suggests the same thing; and so does Martin B. in an obiter dictum in Crouch v. Great Northern Railway Co. It is a factor also that is taken into account in damages for libel; one man should not be allowed to sell another man's reputation for profit. Where a defendant with a cynical disregard for a plaintiff s rights has calculated that the money to be made out of his wrongdoing will probably exceed the damages at risk, it is necessary for the law to show that it cannot be broken with impunity. This category is not confined to moneymaking in the strict sense. It extends to cases in which the defendant is seeking to gain at the expense of the plaintiff some object - perhaps some property which he covets - which either he could not obtain at all or not obtain except at a price greater than he wants to put down. Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay" - (the stress is mine).

64. Mr. Alexander, Q.C. for the appellants laid much emphasis on the sentence stressed above but in Broome v. Cassell at p.1078 Lord Hailsham said of that sentence that it was not intended to be exhaustive but illustrative and was not intended to be limited to the kind of mathematical calculations to be found on a balance sheet. It must be read in its context which included the observations that one man should not be allowed to sell another man's reputation for profit and that exemplary damages could be awarded whenever it was necessary to teach a wrongdoer that tort does not pay. Lord Hailsham then adopted what had been said by Mr. Justice Widgery in Manson v. Associated Newspapers Ltd, [1965] 1 WLR 1038 at 105 that the mere fact that a libel is committed in the course of a business carried on for profit is not sufficient to bring a case within the second category, and expressed as being necessary in addition:

(i) knowledge that the publication was against the law or with reckless disregard whether it was or was not against the law.

(ii) a decision to proceed because the prospects of material advantage outweigh the prospects of material losses.

He finally expressed the whole in the sentence:

"What is necessary is that the tortious act must be done with guilty knowledge for the motive that the chances of economic advantage outweigh the chances of economic, or perhaps physical, penalty".

It is this sentence upon which the respondents founded their pleaded case on exemplary damages.

65. Taking the two cases together it appears to me to be clear that for the present case to have been allowed to go to the jury, there must have been evidence which would have entitled the jury, after due directions, to find:

(a) that the defendants knew the article complained of to be defamatory or were reckless whether it was so or not;

(b) that they published because they took the view that it would, in a broad sense, pay them to publish and risk the consequences of any action the plaintiffs might take.

Sub-paragraph (b) above follows what Lord Reid said in Broome v. Cassell at p.1088 and appears to me to embody the various expressions used in both Lord Devlin's and Lord Hailsham's speeches.

66. It was submitted to the learned judge at the trial and to us that there was no sufficient evidence for the issue to go to the jury bearing in mind that the seriousness of the allegations would require a standard of proof commensurate with such seriousness.
67. It was the defendants' case that the article was not defamatory because the otherwise plainly defamatory matter which it contained would clearly have been regarded by reasonable men as the ravings of one mentally deranged and not treated seriously. The jury rejected this but it does not follow that the defendants knew that the defamatory matter would be taken seriously, or were reckless. They gave evidence that they believed the allegations would not be taken seriously. This evidence the jury might reject or accept. If they accepted it, it would be an end of the case for exemplary damages. If they did not accept it, it would not in my judgment follow without more that they could infer the opposite. Something more was required. The additional possible elements are in my judgment (i) the terms of the article itself and in particular the statement that the assistant chief constable had said "We are making a thorough investigation of the allegations in the letter sent to the News of the World"; (ii) the evidence that the editor had edited the original letter so that, as quoted, it did not name the member of the Banbury CID who had been specifically named in the original and had done so by reason of the risk of libel proceedings unless this course were taken; (iii) the evidence that the editor had appreciated that proceedings might be launched by any member of the Banbury CID who was identified.
68. In my judgment these matters afford sufficient evidence to justify a jury in inferring that the defendants knew the article was defamatory.
69. What then of the second requirement bearing in mind the fact that the defendants published in the course of a business carried on for profit and that this is, alone, not enough?
70. As to the second requirement, there was no direct evidence that the defendants had made any calculation, cynical or otherwise, that the prospects of material advantage outweighed the prospects of material loss, or that the chances of economic advantage outweighed the chances of economic penalty, or that it would pay the defendants to publish and risk the consequences of any action the members of the Banbury CID might take. Of the nature of the question however, it will be but rarely that there is any such evidence. The necessary facts will almost always be matters of inference from directly proved facts.
71. In their pleading the plaintiffs rely on the "eye-catching headline and the prominence the article was given which can only have been for the purpose of boosting the newspaper's sales", and certain post publication matters to which I need not refer for they are no longer relied on. If I am right that there was evidence of guilty knowledge to go to the jury the matter must be approached on the assumption that the jury might find that the defendants knew that the article was defamatory. If, with that knowledge, they so published as to make the maximum sales impact, that, say the respondents, is enough to justify the inference that the case was within category 2, notwithstanding that publication in the course of their (hopefully) profit-making business would not by itself be enough, the more particularly as there was evidence that the editor had recognised at least the possibility of a libel action. A jury of course might not draw such an inference, but it would be a matter for them and not the judge.
72. I have found this matter one of some difficulty. On the one hand it is clear that mere publication by a newspaper is not enough even if guilty knowledge is established. This is because, if it were, a newspaper, if liable at all, would automatically be exposed to exemplary damages if it knew an article was defamatory. On the other hand if a plaintiff has to do more than show that, with knowledge, the newspaper published in such a manner as to maximise the gain, it is difficult to see that, save in the rarest case, a newspaper would ever be so exposed. Albeit after some hesitation,I have reached the conclusion that there was, here, sufficient evidence to go to the jury.
73. It is true that the headline made no reference to the allegations against the police, but that it was designed to boost sales is clear. To do this with gulty knowledge and with the possibility of libel actions in mind is in my view sufficient. In the present case the defendants gave evidence that the publication was for the purpose of minimising the risk to the hostage child. If this were rejected then I can see no reason why a properly directed jury should not draw the inferences necessary to bring the case within category 2.

Directions to the jury

74. Early in his summing-up the judge gave his only direction on burden of proof. Having stated that the burden of proof was on the plaintiffs, he said:

"That means no more and no less than this: that it is for the plaintiff to show you that their points are right on balance. They do not have to prove it with the criminal standard of proof, beyond all reasonable doubt: they merely have to show it on balance".

75. He than went on to consider liability, and at p.14 of the summing-up began to deal with damages. Dealing first with compensatory damages (apart from aggravation) he gave a full and proper direction warning the jury not to be carried away by emotion but to be fair and reasonable. Turning to the question of matters in aggravation the judge listed seven matters which it was proper to consider. No complaint is made of his direction on this part of the case. He then turned to exemplary damages.
76. The directions were in my view wholly inadequate. Indeed, this was really common ground, for Mr. Eady QC for the respondents was driven to seek to fill the gaps by referring to the submissions which had been made in the presence of the jury. This is not permissible. I have read all the submissions and it appears to me that twelve men without the books in front of them and with no legal training would have found it quite impossible to extract from what they heard any clear guidance as to how they should approach their task when they reached it. Some of them indeed may have been paying little attention, in the knowledge that it would be for the judge and not them to rule on the matters being canvassed in argument. In any event it is for the judge to direct the jury on the law and where a case for exemplary damages is being made it is essential that he should give full and careful directions on the law as laid down in the House of Lords. I fear he did not do so. The directions were neither clear nor full and, in one respect at least, simply wrong. On this ground also I would set aside the awards of £25,000 and order a new trial at least on the issue of exemplary damages.
77. I shall state shortly the principle respects in which the directions were in my view inadequate, but I begin by rejecting the criticism of the phrase "the game is worth the candle" used by the judge at the commencement of his direction on the subject. He said this:

"Exemplary damages are, I would suggest, where a publisher of a book or a publisher of a newspaper says that the game is worth the candle. 'We are going to get more out of publishing this than we are ever going to have to suffer from libel actions - or anything else. The game is worth the candle"'. (The stress is mine).

78. The sentence stressed is in my view entirely accurate and proper. It comes well within the principles laid down in Rookes v. Barnard and Broome v. Cassell and is very close to the words used by Lord Reid which I have already mentioned. It is not in my view affected at all by the fact that the judge both before and after it used the phrase complained of. It was, moreover, followed by a passage in which the judge referred to a defendant committing a libel with "the intention of gaining some advantage which he calculates will outweigh any sum which he would have to pay to the plaintiff by way of compensation" and stated that in Broome v. Cassell exemplary damages were awarded "because a calculated risk had been taken".
79. That passage however contains no indication other than the phrase "where the defendant has deliberately committed a libel" to indicate that it was essential for the jury to be satisfied that the defendants knew the article was defamatory or were reckless whether this was so or not and it begins with the direction "you can add exemplary damages where".
80. The use of the word "deliberate" was in my view wholly insufficient. Having come to the conclusion that the article was defamatory, the jury may have supposed that deliberately publishing the article constituted deliberately committing a libel the more particularly as the judge made no reference in this respect to the fact that what was important was whether the defendants knew the article would be taken seriously, not whether the jury considered that reasonable readers would take it seriously.
81. This was in my view a serious defect. Equally or more serious was the plain statement that the jury could add exemplary damages if they concluded that the case was one for exemplary damages, with no warning at all that it was if, but only if, they considered the amount which they had in mind for compensation (including anything for aggravating conduct) was inadequate to punish, could they award any larger sum.
82. This failure was rendered the more serious by the facts that:

(i) he followed the omission by a direction that they could take into account all the matters already mentioned as elements of aggravation; and

(ii) that he concluded this part of the summing-up by posing the question "should it be a case for a punitive award, a punishment over and above the rest".

83. Far from being a warning against, or directions designed to avoid, double counting, the totality is in my view a direct invitation to double count. The jury were being told "when you have considered and arrived at a sum for compensation including aggravation you can add to it, if the defendants took a calculated risk, whatever sum you think appropriate having regard to all the matters of aggravation, of which some were matters arising subsequent to publication.
84. In addition to the foregoing there was no warning that the jury must exercise restraint, no direction as to burden or standard of proof and no direction as to the way in which exemplary damages should be approached in a case where there were several plaintiffs. A matter which I consider next.

Punitive damages when there are several plaintiffs.

85. This has not previously arisen for consideration, but does so in this case. Bearing in mind that the question for consideration is what the defendant ought to pay, the jury should in my judgment be told that when they have decided how much each plaintiff ought to receive by way of compensation, including any elements of aggravation, they should then:

(1) aggregate those sums to arrive at a total figure for compensatory damages;

(2) consider whether the case is one in which exemplary damages can be awarded, being given for this purpose full and clear directions in accordance with Rooks v. Barnard and Broome v. Cassell;

(3) if they are satisfied that the case is one in which exemplary damages can be awarded, consider whether the aggregate of compensatory damages is enough to punish the defendant;

(4) if it is not enough, consider what total sum the defendant ought to pay in order to do so;

(5) divide the difference between the total sum which the defendant ought to pay and aggregate for compensatory damages by the number of plaintiffs and add the figure so arrived at to each of the compensatory sums;

(6) having done so, award to each plaintiff the total so arrived at as one undivided sum but state, if asked to do so, whether that sum exceeds what would have been awarded for compensation (including aggravation) only and if so what would have been awarded for such compensation.

86. Even distribution between the plaintiffs of the total sum by which the amount which the jury consider the defendants ought to pay exceeds the aggregate of the sums for compensatory damages is in my view the only possible approach, for I can see no basis on which any plaintiff should receive a bigger windfall than any other plaintiff. In receiving the compensatory sum alone each plaintiff will be compensated for all aggravating matters. The excess, being pure punishment differentiation between plaintiff, would not be justified.
87. I am conscious that one of the requirements of exemplary damages is that the plaintiff should have been the victim of the conduct which brings the case within the relevant category. I find it difficult to see how, in respect of a single article, any plaintiff would not have been the victim, save perhaps if it were the case that the defendants did not know that the article was defamatory of that plaintiff. In such a case, were it to arise, the approach outlined above could readily be adapted, for the jury would then consider the amount which the defendant ought to pay for his conduct towards the other plaintiffs and the excess would be divided between them.
88. I am also conscious that a case could be made for distributing the excess rateably between the plaintiffs according to the amounts of the respective awards of compensatory damages. Such an approach was not advanced by counsel and does not arise in this case because the compensatory awards are equal. I mention it only to express the view that it would not be right and would add yet further complications to the already complicated, and as I think unsatisfactory, state of the law which presently exists. In cases where claims for exemplary damages are made, juries and the judges who direct them have already sufficient difficulties to contend with and I would not add more unless compelled to do so either by precedent or some very cogent consideration. Since, where there are multiple plaintiffs, the exemplary element has got to be distributed somehow, and since in the case of each plaintiff whatever he gets is a windfall, equal distribution is the simple and reasonable way to deal with the matter.
89. The six steps mentioned above were suggested to counsel in the course of argument with an invitation to comment upon them. Both Mr. Alexander and Mr. Eady accepted that they represented a sensible and logical approach to the problem. Mr. Eady expressed, however, some doubt whether to adopt them would infringe the requirements of the House of Lords that one sum only should be awarded. This doubt is in my view unjustified. It is in accordance with the House of Lords decisions that the jury in the ' privacy of the jury room should first arrive at the sum they would award for compensation only, then determine whether any larger sum is necessary to punish and deter, and if so what sum. The six steps involve in effect no more than this. The jury will still award one sum only to each plaintiff and unless asked to do so will say nothing as to the stages by which they have arrived at it.

What course should now be taken?

90. There must clearly be a new trial on exemplary damages but should any new trial go beyond this and include all damages or even be of the whole case including liability, on the basis that a new jury could not satisfactorily deal with exemplary damages alone but must at least consider the whole issue of damages and possible liability as well?
91. In my view no new trial on liability is required. The matter complained of was, if taken seriously, clearly defamatory. The jury were properly directed and I can see no reason why, because the judge erred in respect of exemplary damages, the plaintiffs should be deprived of their verdict on liability. As to a trial on all damages, as it is common ground that the jury were properly directed as to compensatory damages, including matters of aggravation, it is difficult to see why that matter should be retried and why a new jury should not simply consider whether the case is one in which exemplary damages can be awarded and if so whether more than the aggregate of the compensatory awards already made is required to punish and deter. Subject to argument on the matter which it was stated that the court would be prepared to hear when counsel had had the opportunity to consider the judgments, I would therefore allow the appeal, vary the judgments on damages to interlocutory judgments for £300 and order a new trial on exemplary damages only.
92. JUSTICE PARK: At the trial, the plaintiffs asserted that there was evidence on which the jury, properly directed, would be entitled to include in any award of damages an amount in respect of exemplary or punitive damages. The defendants asserted that there was no such evidence. The learned judge left the issue to be decided by the. jury which, by its award, upheld the plaintiffs' case.
93. In this court, Mr. Alexander repeats the defendants' contention that there was no such evidence and adds that in any event, the learned judge failed properly to direct the jury both as to the law relating to exemplary damages and as to the nature of the issues of fact and evidence which they had to consider.
94. In almost every libel action in which a plaintiff claims a punitive or exemplary award of damages against the publishers of a newspaper, the directions given by the judge to the jury have to include directions on the lines of those given by Mr. Justice Widgery in Manson v. Association Newspapers Ltd., [1965] 1 WLR 1038, namely, that in deciding whether to make such an award, the jury had to be satisfied on the balance of probabilities that when the newspaper published the words complaine of, the publisher knew full well that the words were highly defamatory of the plaintiff and could not be justified as true; that the words were deliberately so published because, although the publisher realised that he might have to pay some damages to the plaintiff, he reckoned he could still make a profit or secure some other material advantage or benefit such as scoring a march over the newspaper's competitors, which would outweigh any loss he might suffer in compensating the insured party; that on the other hand, the object of a publisher of a newspaper was to make a profit and build up the newspaper's circulation, so that an award of exemplary or punitive damages must not be made merely because a libel was published in its pages; however, that if the jury was satisfied that the case was one in which an award of exemplary damages had to be made, they would have to consider whether the sum they proposed to award by way of compensatory damages (which might include an element of aggravated damages) was sufficient, not only for .the purpose of compensating the plaintiff, but also for the purpose of punishing properly the publisher for his offence in doing what he did; that if they were satisfied that the sum was sufficient for that purpose, nothing would be added to it; but, if they were not, they should add to it enough to bring the total up to a sum sufficient as punishment; that in considering any such additional sum, they would not be able to overlook the fact that the publisher was a rich corporation, so the sum that they awarded would not have to be regarded by it as trifling; nevertheless, that they should ensure that the sum awarded was reasonable and reasonably related to the offence which they were seeking to punish.
95. Having given directions on some such lines as those, the judge has then to assist the jury by directing their attention to the evidence relevant to the issue of exemplary damages given on behalf of both the plaintiff and the defendant. For example, the jury has to be told that what was in the mind of the publisher at the time of the publication was a vital matter, going to the root of this question; that, while the publisher might say in evidence, for example, that he did not know that the words complained of were defamatory or that his motive in publishing them was for some purpose other than obtaining profit or some other benefit, it was for the jury to decide whether they could safely and properly draw from his evidence and from all the surrounding circumstances the inference that, despite what he had said, he in fact had the necessary knowledge and motive.
96. In my judgment, in view of the matters to be considered by the jury on the issue of exemplary damages in this case, directions on these lines, coupled, as this was a case in which there were several plaintiffs, with directions about the six steps to be taken as set out in the judgment of my Lord, Lord Justice Parker, would have been appropriate.
97. I deal first, with Mr. Alexander's submission that there was no evidence to support the plaintiffs' claim to such an award and, in consequence, that the learned judge was wrong to leave the issue to the jury.
98. The plaintiffs' case rested almost entirely on the inferences which could safely and properly be drawn from their view of the evidence of Mr. Shrimsley (to which I shall later refer) about the reasons for his decision to publish the article and to publish it in the manner in which it was presented in the newspaper. The jury might reject Mr. Shrimsley's evidence, as they would be entitled to do, and at the same time they might attach great importance to the fact that the article, which they would have found to be seriously defamatory of the plaintiffs, was published on the front page of the newspaper under the heading "Exclusive", the object of which, as Mr. Shrimsley admitted, was to encourage potential readers to buy the 'News of the World rather than another newspaper, because the word "Exclusive" indicated that the News of the World had got something which other newspapers did not have. If the jury rejected Mr. Shrimsley's evidence and at the same time formed an opinion about the reasons for the .prominence given to the article, they would be justified in acceding to the way in which Mr. Eady put the plaintiffs' casein his final speech. He said:

"If you think in effect that the newspaper knew that what was being published was defamatory and knew that it was untrue, as clearly they must have done, but decided to put the story out to its readers on the front page nonetheless, in order to sell newspapers; if in other words you think that the newspaper was selling the reputation of these men in the Banbury CID for profit, then you would be entitled, as the body of men and women who set the standards in these matters, to award such damages as you think appropriate to mark disapproval or to signify deterrence. If you think that this was an example of Fleet Street at its worst, at its most callous in relation to the individual, and an example of blatant Fleet Street opportunism, then you would be entitled to mark that by an award of exemplary damages".

99. For my part, having read the- transcript of Mr. Eady's able and penetrating cross-examination of Mr. Shrimsley, I am satisfied that the judge was right - to leave the jury to decide whether Mr. Shrimsley knew that the article was defamatory and could not be justified as true and that it was published, in the manner described, for the purpose of securing advantages for the newspaper.
100. The learned judge's summing-up on every issue in the case, save that of exemplary damages, was in my judgment beyond criticism. His directions on such issues as whether or not the words were defamatory, on compensatory and aggravated damages and on the evidence relating to those questions were careful, clear and concise. On the subject of exemplary damages, however, there were omissions and errors which I am sure he would not ordinarily have allowed to be present therein. The reason is to be found, I think, in the weight he attached to the fact that the jury had been in court during counsel's submissions to him on inter alia he question whether there was evidence to support the claim for exemplary damages. Both Mr. Gray and Mr. Eady discussed the law thoroughly and read, in the course of their submissions, extracts from text books, from judgments and from the speech of Lord Devlin in Rookes v. Barnard and the speeches in Broome v. Cassell. Counsel did not disagree as to the law.
101. I think that the learned judge was satisfied that, as a result of listening to the discussion, the jury must have been fully informed as to the law they had to apply to the question and as to what had to be proved by the plaintiffs before they could succeed on this part of their case. I receive that impression from the first sentence of his directions on this topic:

"And then, third, members of the jury, we come back to our old friend, exemplary damages".

Then, after a reference to the expression, "The game is worth the candle" he said:

"I need hardly tell you that these are not the words set out in the legal text books, nor by a lot of the quotations we have heard".

102. As I have said, the consequence was that his directions, both on the law and on the evidence required to support the claim, were not as they would otherwise have been. I am unable to accept that, on such a difficult subject as exemplary damages, the learned judge was entitled to assume that this jury, through hearing counsel's submissions, could be treated as having understood what legal principles were applicable to this question and what facts had to be proved by the plaintiffs before they could make an award in their favour.

The learned judge told the jury:

"You can add exemplary damages where the defendant has deliberately committed a libel with the intention of gaining some advantage which he calculates will outweigh any sum which he would have to pay the plaintiff by way of compensation".

Another passage to the same effect was:

"Exemplary damages are where a publisher of a book or a publisher of a newspaper says that the game was worth the candle. We are going to get more out of this than we are ever going to have to suffer from libel actions or anything else".

Again, towards the end of the summing-up, he said:

"Should there be exemplary damages? Members of the jury, you may wonder whether the News of the World were, as it were, thinking that it was worth adding to their circulation by publishing this particular story: but it's a matter for you and you would add a sum for exemplary damages".

However, in no part of the directions is there to be found any advice to the effect that, as a newspaper publisher is in business to make a profit, the mere fact that a libel was published in the News of the World was not by itself sufficient to justify an award of exemplary damages. Towards the end of his directions, the learned judge said:

"Exemplary: should they be made an example of for this? Should it be a case for a punitive award, a punishment over and above the rest?"

103. I do not consider those words to be sufficiently explicit for the purpose of explaining to the jury that if the amount they proposed to award each plaintiff by way of compensatory damages was adequate also for the purpose of punishing the defendants, then nothing must be added to that sum by way of exemplary damages. Nor do I find in those words any guidance to the effect that if the jury decided that the amount was not adequate for the purpose of punishment, the sum to be added ought to result in a total award which was both reasonable and reasonably related to the offence which they had found to be proved.
104. Further, in his directions as to the matters which the jury were entitled to take into consideration in making an award of exemplary damages, the judge said:

"Now to look finally at the question of damages: the exemplary damages claimed here are in relation to the general conduct of the News of the World; all the matters that I have mentioned and the way they have run the case and have never even had the grace to apologise. They have made allegations, it is said, that were reckless; for example, for a while they alleged that they had Mr. Smith's permission and indeed command to publish the letter. It is also said that their level of journalism in this regard was hypocritical and that they were publishing to increase their circulation generally, especially heading their story 'Exclusive' but really aiming to put in the juicy bits which were about the Banbury CID".

105. The first two sentences seem to suggest that in their assessment of the amount of exemplary damages, they would be able to include many, if not all, the factors which they had been told they would be entitled to take into account in their assessment of the amounts to be awarded by way of compensatory and aggravated damages. In addition to these matters, I think the jury ought to have received firmer and clearer directions as to the facts which had to be established before an award of exemplary damages could be made at all.
106. In my view, it was essential for the jury to be instructed that Mr. Shrimsley's state of mind at the time he decided to publish the article was vital both to the plaintiffs' claim and to the defendants' answer to it. In his evidence, Mr. Shrimsley gave reasons for his decision to allow the article to be published; in brief, they were that he did not believe that anyone would take seriously Brain's allegations against the Banbury CID; that he believed that reasonable readers would regard what was in Brain's letter as the outpourings of someone who was mentally disturbed and that the publication of the story might lessen the risk of Brain doing violence to anyone during the course of the siege, because it would meet a demand that his grievances should be given maximum publicity.
107. Mr. Shrimsley's reasons for publishing the article were strongly challenged by Mr. Eady whose cross-examination ended with a question which summarised the plaintiffs' case on exemplary damages:

"(Q) What I put to you is this: that this defamatory article.....was published by you on the front page of the News of the World because it contained allegations such as rape, violence and blackmail which other Sunday competitors did not have; because it was, in journalistic terms, a good story and would attract more readers and you chose deliberately to do that, knowing that there might be a libel action and knowing that it was at the expense of the Banbury CID?

(A) I hope that the answers I have given previously are the answer to your final question.

108. The learned judge did remind the jury of the substance of Mr.Shrimsley's evidence; but they were not reminded, at the same time, of the comprehensive challenge to it by Mr. Eady. In those circumstances, directions ought to have been given to the effect that, before theycould even begin to consider an award of exemplary damages, they had to be satisfied, on the balance of probabilities, that Mr. Shrimsley's reasons for publishing the article were untrue and that, despite what he had said, he had in fact published it, knowing that it was highly defamatory of the plaintiffs and could not be justified as true, with the motive fully explained by the judge in the passages to which I have referred. I find it difficult to be sure that the jury appreciated that the foundation of the plaintiffs' case involved the rejection of Mr. Shrimsley's evidence.
109. For these reasons, I have come to the conclusion that on this issue there were serious omissions and errors in the directions to the jury. Had they been properly directed, I think it is highly unlikely that they would have returned verdicts which had the effect of punishing the defendants for the publication of the defamatory article to the tune of £250,000. I would therefore allow the appeal and quash the awards of punitive damages.
110. In their cross-appeal, the plaintiffs contend that, if the awards were overturned, it would be unsatisfactory to look at the £300 awarded to each plaintiff in isolation and without reference to the £25,000 award of exemplary damages, and that accordingly the £300 ought also to be overturned. Subject to further argument, I agree that at first sight the £300 would seem to be a less than adequate award for any plaintiff who had been libelled in the manner complained of. However, the judge's directions on compensatory and aggravated damages cannot be faulted. Further, there were circumstances which the jury might well have taken into consideration in deciding that this modest sum was enough: namely, the plaintiffs were not identified except to those who knew they were members of the Banbury CID; those who knew a plaintiff was a member of the Banbury CID would not be likely to believe that he was the person involved in the conduct described in the letter; there had been considerable delay in bringing the case to court and in consequence any injury to the plaintiffs' feelings years before the trial could be compensated by moderate damages, I would therefore dismiss the cross-appeal and order a new trial on exemplary damages.
(Order: Appeal allowed; retrial ordered on question of exemplary damages only;
plaintiffs (respondents) to have costs of both appeal and cross-appeal).