England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice The Strand London WC2A 2LL
		12 May 2008

Monday 12 May 2008

MR JUSTICE EADY:

1. This application by Mr Smith raises a number of questions which need to be addressed with some urgency. So far Mr Smith, who is the applicant this morning before me, has issued 37 sets of proceedings for libel against different individuals in relation to internet publications on a bulletin board or bulletin boards. He has made it clear that he intends to issue a significant number of other claims in future if given the opportunity.
2. Because he is exempt from the normal fees, the usual financial disciplines are absent. The exercise would, I understand, have cost a non-exempt litigant so far something in the region of £63,000 to date. On the other hand, under a conditional fee arrangement, as I understand it, Mr Smith is being assisted to some extent by a firm of solicitors.
3. There is in operation a practical safeguard on the instructions of the Senior Master whereby the staff are supposed to refer to him any situation where an individual claimant seeks to issue more than five sets of proceedings. For whatever reason, in this instance the filter system broke down. The Senior Master decided in respect of the 37 claims already issued to hold matters on a temporary basis by ordering a stay, which he did on 25 April 2008. He referred the claims to me for further directions and I clearly have a duty to intervene and to exercise positive case management powers in accordance with the overriding objective and with regard to fairness to all concerned.
4. On closer examination it appears that in a significant number of cases the proceedings have already concluded either because they were Part 8 claims seeking only Norwich Pharmacal relief (already obtained) with a view no doubt to further proceedings being launched in the light of the information acquired, or because the individual defendants have settled the case on agreed terms. I was told, for example, that there were seven Norwich Pharmacal claims now completed and that in three cases there were apologies and statements in open court as long ago as 12 October 2007.
5. There are, I understand, five cases where the proceedings are under way and being case managed already. In others the proceedings have simply been issued in advance of the expiry of the relatively short twelve month limitation period and are held in abeyance until an attempt has been made to comply with the pre-action protocol steps. I understand that 21 cases fall into that category.
6. Manifold problems have been thrown up in this jurisdiction, and in others, in recent years by the development of the internet over the last decade and by the opportunities it presents for people to reach a wide audience or readership and to defame others either without regard for legal constraints or in ignorance of the law. Not least, of course, there are complicated jurisdictional issues which should ideally be resolved by international agreement. In the present circumstances, however, that is one problem that does not appear to arise. Mr Smith seeks to sue only in respect of publications by individuals who reside within the jurisdiction of this court.
7. There has been vigorous debate on the internet about Mr Smith and his actions arising primarily from his role in running a shareholder action group in connection with a company called Langbargh International Limited. It has been alleged that shareholders' interests have been damaged as a result of large-scale fraud. The merits of this dispute and the detailed factual background do not need to be considered for the purposes of the present application. It is nonetheless obvious that feelings have been running high.
8. It is central to Mr Smith's claims that he has "suffered a sustained campaign of vilification and defamation" by a considerable number of people using a financial website known as ADVFN. It is also said that "the same offenders have even spread the alleged defamations to other financial websites".
9. The strategy adopted by Mr Smith, aided by his solicitors, has been to try to pick off the "offenders" one by one by threatening proceedings for libel and by suggesting payments by way of damages and/or costs. Many of the people concerned are, as I understand it, impecunious or of modest means and there is clearly the hope that they will collapse and comply with these demands at an early stage. Somewhat surprisingly, demands have been made of potential defendants even after 25 April and yet without telling the recipients of these threats that the Senior Master had imposed a stay on that date. I was told by Mr Smith this morning, having asked the question, that the solicitors Edwin Coe were informed by him of the stay as soon as he knew about it, which I understand was on 28 April. A partner was informed of the stay but it is a matter of some doubt, as I understand it, whether or not that information filtered through to the relatively junior member of staff issuing the letters. I look forward with interest to a full explanation from the solicitors as to why there were communications after the date of the Master's stay without informing the recipients. There may be a perfectly innocent and understandable explanation, but I think it is fair that I should have it as early as possible.
10. At the very least it is possible to conclude, even at this stage, that the strategy of "divide and rule" is inappropriate, as I have explained to Mr Smith this morning and as he is already aware. This is especially so in libel proceedings because, if they are appropriate at all, damages can only be assessed in the round (that is in the context of the overall picture). In particular, any distress and hurt feelings suffered by Mr Smith would have to be compensated by reference to the totality of the publications and not on the artificial basis of the sum total of the impact upon his feelings by one individual publication; otherwise there would, as I think he understands, obviously be a significant risk of overcompensation.
11. I am now asked to lift the stay and let the strategy to which I have referred take its course. It seems to me to be a matter of basic fairness that each of the defendants (or proposed defendants) should have the opportunity to be heard on this application insofar as his or her interests are to be affected by the outcome. There may, for example, be arguments to be advanced in any given case that the words complained of are not actually defamatory. An argument has been raised by Mr Smith that the matter has already been considered on Norwich Pharmacal applications and that they must be taken to be at least arguably defamatory for that reason. But this would not give rise, in my judgment, to res judicata, and the matter would be open for argument by any individual who wished to raise it. It is the case that some of the allegations would appear on their face to be defamatory -- allegations of dishonesty or criminality, for example. Others might fall into what is generally known in the context of slander as being "mere vulgar abuse", as opposed to genuine examples of defamation. For example, Mr Smith has been described by some as a "destructive twerp", as a "bulletin board bully", as "suffering from megalomania", as "suffering from bipolar disorder" (schizophrenia), and one allegation was to the effect that, even if his mother told him he had been a naughty boy, he would sue for defamation of character. Others have referred to him as "exercising silly, bully-boy tactics". Another allegation is that "his actions to date are disgraceful and the actions of Edwin Coe are equally as bad". It has been suggested that he is trying to "bully hard-earned cash out of people" and that he has "made himself a laughing stock". Some of these allegations in their context may ultimately be held to be defamatory. Others may be taken to be "mere vulgar abuse", which would not necessarily be taken by reasonable readers to be intended to be accurate and therefore may not be defamatory. It depends on the circumstances. These are arguments which people are entitled to raise insofar as they are applicable to their particular case. There may also be arguments that one or other of the traditional defences in defamation is bound to succeed -- for example, fair comment, or qualified privilege, or may be (for all I know in some cases) justification.
12. On the point of qualified privilege, Mr Smith is well aware of this potential argument, although he thinks it weak and that it will be overcome in all cases by his proving malice in due course if appropriate. But he describes (in the Particulars of Claim, for example, in action HQ07X02620) the bulletin board as "a community of those who have an interest in the company" (ie Langbargh). That is obviously the foundation for a potential argument on qualified privilege. These are all matters which may need to be considered very carefully in due course after the benefit of full argument insofar as people wish to raise the arguments.
13. It may also be necessary to consider the principles addressed by the Court of Appeal in the case of Jameel (Yousef) [2005] QB 946, and in particular at paragraphs 54 and 69-70 on abuse of process. It may be necessary in some cases to ask, as it was there put, whether "the game is worth the candle".
14. In at least one other case I am told by Mr Smith in his evidence there has already been an attempt to strike out the action in October 2007, which failed at that stage. All of this emphasises the need to consider these cases individually, although I have every anticipation that, insofar as they survive that stage, they will need to be case managed together for the reason I gave earlier. They need to be considered carefully because different considerations may apply in some cases from others.
15. Another jurisdiction to be considered is that relating to the Civil Restraint Order regime now under CPR 3.11 -- a matter to which express reference was made in the Senior Master's order of 25 April. He thought it appropriate for me to consider to what, if any, extent it would be right to restrain Mr Smith from continuing or commencing his libel litigation. Mr Smith has drawn to my attention this morning communications from various potential defendants making reference to vexatious litigation. That is a jurisdiction which, as everyone knows, is to be exercised, if at all, by the Attorney General. That is a quite separate and distinct regime from that now generally known as the Civil Restraint Order jurisdiction. That jurisdiction has been developed significantly over the last five years or so for the purpose of giving the court flexibility in how it controls those who resort to its processes for reasons of litigiousness rather than seeking a genuine remedy for wrongdoing. That flexibility is needed because there is an infinite number of circumstances in which the matter may have to be considered.
16. The moment for the exercise of that jurisdiction has not yet come, if it will arise at all in this case, because I am not in a position at this stage to say that any of the claims is "totally without merit", although I will certainly entertain any submissions to that effect by any defendant who wishes to make them.
17. For the moment I will keep the Master's stay order in effect in respect of all the litigation, although it may very well be that it is inappropriate ultimately to keep it in place in some of the cases. However, the application will be adjourned so that Mr Smith can notify all the relevant defendants (or potential defendants) and give them an opportunity of being heard either in an oral hearing, which can be arranged in due course to suit everyone's convenience, or, if they prefer, they can make their submissions in writing, as some already have. I have this morning given Mr Smith copies of those written submissions which I have already received. They were sent to the court, as everyone understands, under the cloak of absolute privilege. So the matter will stand adjourned for the time being with all other questions such as costs reserved correspondingly. Are there any other matters you wish to raise at this stage, Mr Smith?

THE APPLICANT: Yes, my Lord. One matter is the matter of the application request under CPR 7.7 from the defendant known as "Wing Pierce", who has requested a copy of the claim. As I mentioned to your Lordship in my argument, were I to serve those documents with the stay order in effect, I would be in contempt of court.

MR JUSTICE EADY: Well, subject to any order of the court, of course. It seems to me right that he should have the opportunity to see what is alleged against him and I would therefore grant that application.

THE APPLICANT: Thank you, my Lord. I am grateful.

MR JUSTICE EADY: That disposes of all matters, does it?

THE APPLICANT: The only other matter, my Lord, is: would I be able to set an early date for the oral hearing?

MR JUSTICE EADY: I have indicated that it is desirable that this matter should be dealt with as soon as possible, but I think it is right that the defendants should have notice of what is to happen and an opportunity of dealing with it. So I think it should be not too immediate.

THE APPLICANT: I was thinking really of the end of term coming up -- the end of July.

MR JUSTICE EADY: Do you mean the end of July or the end of May?

THE APPLICANT: I was hoping that if we gave them a month....

MR JUSTICE EADY: Yes. Certainly it should be possible to arrange a hearing before the end of July and I would hope that listing will take into account the convenience of all concerned so far as possible.

THE APPLICANT: Thank you, my Lord.

MR JUSTICE EADY: Thank you very much.

THE APPLICANT: Thank you, my Lord.

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