Scottish Court of Session Decisions

[1] In this action the pursuers and reclaimers seek damages against the defenders on the ground that they have suffered loss, injury and damage by reason of the libellous and defamatory statements of the defenders and respondents. At the time that the statements were made the pursuers were enrolled solicitors and partners in a law firm, Gordon Thomson & Co. Damages are sought both for injury to their feelings and their reputation and for substantial financial loss including loss of their legal business and two related businesses. The defenders are, respectively, the individual who was President of the Law Society of Scotland at the relevant time (the first defender), the Law Society itself (the second defenders) and, as the fourth to ninth named individuals, those individuals who constituted the members of the Scottish Solicitors Discipline Tribunal, which between October 1994 and April 1995 heard two complaints alleging professional misconduct concerning the pursuers' law firm and the partners of it. The statements founded upon relate to the proceedings before the tribunal and to statements made upon the conclusion of those proceedings on 7 April 1995, when the pursuers were ordered to be removed from the roll of solicitors, both for the Tribunal and by the first defender at a press conference held on 7 April 1995.

[2] In the conclusions of the summons the pursuers seek decree against the defenders jointly and severally for payment to the first named pursuer of the sum of £1.5 m. and of a like sum to the second named pursuer.

[3] The action was the subject of a procedure roll debate before the Lord Ordinary. By his interlocutor dated 18 July 2000 he dismissed the action as laid against all the defenders and in doing so, sustained pleas to the competency and relevancy of the action stated by each of the first, second and fourth to ninth defender, reserving the question of the expenses. The pursuers as party litigants have appealed against the Lord Ordinary's interlocutor and have lodged grounds of appeal. These were amended by way of additional grounds added of consent at the hearing before this court.

[4] A motion has been enrolled severally on behalf of each of the first defender, the second defenders and the fourth to ninth defenders, seeking caution in the sum of £50,000 from the pursuers as a condition precedent to continuation of the appeal. For the first and second defenders the motion is made on three grounds, that the reclaimers are vergens ad inopiam, that the reclaimers have failed to pay outstanding legal expenses amounting to £122,306 arising from the original proceedings before the Scottish Solicitors Discipline Tribunal, and that the reclaiming motion has no reasonable prospect of success. For the fourth to ninth defenders in addition to grounds which reflect the above grounds, it is further maintained that the pursuers will have incurred expense to a recent unsuccessful appeal against a decision of the Tribunal and that the appeal is likely to be lengthy, the proceedings in the Outer House having taken two weeks.

[5] At the hearing on the motion in the single bills separate submissions were made on behalf of the first defender, the second defenders and the fourth to ninth defenders. These submissions were in large part common to all the three parties subject only to matters which were peculiar to those parts of the action directed against each party.

[6] In moving for caution, counsel accepted that the impecuniosity of a party to an action is not in itself sufficient to entitle another party to obtain caution, the general principle being that an impecunious litigant was entitled to advance a stateable case. Cogent and compelling factors required to be advanced to overcome that principle (see McTear's Exx. v. Imperial Tobacco Ltd. 1997 SLT 530). Such cogent and compelling factors were present in this case. In the first place, there had been a failure to meet previous decrees for expenses over a period of some four years. It was said, and not disputed by the pursuers, that in relation to the tribunal hearing concluded on 7 April 1995, findings of expenses had been made jointly and severally against the pursuers and an erstwhile partner of their firm in favour of the second defenders in the sum of £199,246 in relation to one complaint and against the pursuers jointly and severally in favour of the second defenders in the sum of £10,160 in relation to the second complaint. Those findings had not been disturbed when the pursuers successfully appealed to this court against the sentence imposed by the tribunal. That sentence was quashed by order of this court dated 12 March 1999 and the matter was remitted back to a differently constituted tribunal for further hearing on the matter of sentence. In April 1996 the second defenders served certain arrestments in execution in relation to these orders for expenses but had recovered only relatively small sums to date. In addition, prior to the first tribunal hearing the pursuers had sought judicial review of the procedure in an action against the second defenders and the Scottish Solicitors Discipline Tribunal. The action had been dismissed and the pursuers had been found liable in expenses which amounted to £1571 payable to the second defenders and to £2588 payable to the Tribunal. Taking account of the sums already paid and apportioning, as the pursuers' liability, two-thirds of the sum for which the pursuers and their erstwhile partner were found liable to pay to the second defenders in respect of the tribunal hearing, the sums presently outstanding to the second defenders is £122,306. As yet the second defenders had taken no steps to sequestrate the pursuers but it was open to them to do so at any time. Since November 1995 a further tribunal hearing had taken place on the matter of sentence. That tribunal also ordered that the pursuers should be struck off from the from the roll of solicitors. There had thereafter been an appeal at the instance of the pursuers to this court against this decision. This appeal had been refused with a finding of expenses against the pursuers. In these circumstances, standing the fact that the pursuers in their pleadings in the present action aver that the debts incurred by them after the statements complained of were made, took them to the brink of bankruptcy and that they continue to repay these debts by small weekly amounts, there was no reasonable prospect that their liability for the prior findings of expenses would be met. To all practical intents and purposes they were bankrupt. A person who was an undischarged bankrupt would normally be required to find caution and would only not be so ordered in exceptional circumstances (see McCue v . Scottish Daily Record 1999 SC 332). Equally, short of bankruptcy there were circumstances in a person might be ordered to find caution. Reference was made to the opinion of Lord Hunter in Will v. Sneddon, Campbell & Munro 1931 SC 16. This case concerned the grant of caution where an undischarged bankrupt who had paid 20s in the £, but who had been charged to make payment of a sum of expenses for which decree had been pronounced against him in a previous action and, having allowed the days of charge to expire without payment, had become notour bankrupt. Failure to pay expenses awarded agains

[7] It is convenient at this point to have regard to the form of the action and, in particular, to the manner in which the legal issues were presented to and determined by the Lord Ordinary. The nub of the action is the prosecution of the pursuers as solicitors and partners in the firm of Gordon Thomson & Co. by the second defenders before the tribunal comprising the fourth to ninth named defenders on complaints alleging professional misconduct on the part of the pursuers. The pursuers say that the proceedings before the tribunal ended with their pleading guilty to a very much reduced set of charges of professional misconduct both in the quantitative and qualitative sense. These pleas were offered to and considered by the procurator for the second defenders before they were accepted by him. In so accepting these pleas the pursuers say that the second defenders' procurator before the tribunal accepted that all charges alleging fraud and dishonesty against the pursuers were withdrawn. The consequence of the acceptance of the pleas was the determination by the tribunal by their interlocutor of 7 April 1995 of the complaints before them in accordance with those pleas, of which they had previously been advised by letter from the second defenders' procurator, and the sentence of the tribunal that the pursuers be ordered to be removed from the roll of practising solicitors. On this same date two separate incidents took place which, the pursuers say, are intimately related and which together caused the loss, injury and damage of which they complain. Firstly, there was the publication of a press release by the tribunal which, the pursuers say, was factually incorrect in that it could only be construed as meaning that both pursuers had been involved in an elaborate legal aid fraud from which they had received £30, 000 and that the sum had been repaid to the Scottish Legal Aid Board. Secondly, there was a statement made by the first defender at a press conference called by the second defenders for the purpose of providing information to the media about the tribunal decision and at which the statements made by the first defender were made in his capacity as President of the second defenders. In the course of the press conference the first defender made a statement about the tribunal proceedings and determination. In the course of it, it is averred, the defenders plainly said that the pursuers "permitted" actings by a staff member thereby giving the impression to the legal profession and to the public that they had wilfully and knowingly defrauded the Scottish Legal Aid Board. The statement made, the pursuers say, was defamatory in that it bore that the pursuers had committed fraud, whereas the acts of professional misconduct which the pursuers had accepted, did not involve them in liability for any form of criminality. This statement was made at a time when the first and second defenders were already aware of the terms of the tribunal's press release.

[8] We note that in his opinion the Lord Ordinary states that if this statement had been the only issue in the case he might have been persuaded to allow a proof before answer if only to set the particular remarks complained of in context. It is clear from what follows in his opinion that he did not take that course because he considered that the statement at the press conference was made in circumstances covered by the plea of qualified privilege taken both for the first and the second defenders. We note that before the Lord Ordinary it was accepted for the pursuers - and we do not understand this to be challenged in the grounds of appeal - that each of the statements made by the first defender as President of the second defenders was uttered on an occasion which was a privileged occasion, that the plea of qualified privilege was to that extent properly invoked and that it was necessary for the pursuers to aver and prove malice. On this part of the case the Lord Ordinary proceeded, as he himself acknowledges, from the references in the pursuers' pleadings to the state of knowledge of the first defender when he made the statement at the press conference and was concerned to determine whether there was within them sufficient material to provide context for proof of malice on the part of the first defender. However, it is important, we consider, to bear in mind that before the Lord Ordinary it was accepted that the action so far as laid against the second defenders proceeded on the basis of vicarious liability for the first defender's actings as President. Thus it is accepted that the first defender was not only representing himself but the second defenders when he appeared at the press conference. The pursuers' grounds of appeal, and this was repeated before us, proceed upon the basis that the pursuers' averments made as to the circumstances in which and the background against which the statement came to be made are relevant to show that the statement complained of at the press conference was made with that degree of wholly reckless indifference to truth which, the Lord Ordinary recognised, the law in cases such as fraud equiparates with positive knowledge of untruth. The pursuers' case is clearly of a kind that must depend upon an inference of malice drawn from the circumstances and background against which the statement came to be made. At this stage it is sufficient, we consider, to note that the determination of such an issue will depend upon the capacity in which the first defender was acting when he made the statement. The Lord Ordinary appears to have held that the pursuer's averments were not sufficient to enable a court to hold, if proved, that there had been such an inadequacy of inquiry prior to the press conference as to the outcome of the tribunal hearing on the part of the first defender that there was the necessary reckless indifference to truth. In doing so the Lord Ordinary founds upon a dictum in the speech of Lord Diplock in Horrocks v. Lowe 1975 AC 135. This conclusion is challenged in the grounds of appeal. Before the Lord Ordinary it was accepted by counsel both for the first defender and for the second defenders, that a complete want of inquiry when taken with other circumstances of ill-will, could provide a basis from which malice might be inferred and it appears that the Lord Ordinary was prepared to accept that certain averments made by the pursuers might yield an inference that prior to the statement the first defender as an officer of the second defenders was persuaded that the pursuers were guilty of serious professional misconduct and on that account was ill-disposed towards them (see paragraph 72 of the Opinion). The Lord Ordinary, in paragraphs 61 and 62 of his Opinion, has held that to overcome qualified privilege, it was necessary for the pursuers to prove that

We consider that a real and stateable argument arises as to whether it is sufficient for an officer representing the party which prosecuted the complaints before the tribunal and which accepted the pleas upon which the tribunal decision was founded and who is making a public statement on that party's behalf at the conclusion of the proceedings, against the general background circumstances averred by the pursuers, to rely upon "a failure to make proper inquiry, however reprehensible" as avoiding a charge of malice albeit that charge be founded upon an offer to prove not actual knowledge but knowledge that "he ought to have been known". We are not therefore persuaded at this stage that it can be said that there are no reasonable prospects of success for the action so far as laid against the first and second defenders.

[9] A different issue arises as regards the fourth to ninth defenders. The case against these defenders is set out in article 5 of the condescendence begins with allegations as to what passed between members of the tribunal on the second day of the hearing. It is said that the language used by one member and its reception by the other members of the tribunal "demonstrated such impropriety as to indicate that the fourth to ninth defenders acted outwith their judicial capacities". Subsequent to the final determination of the determination the tribunal issued on 7 April 1995 there was issued a press release in which, it is said by the pursuers, that there were two matters which were material and factually inaccurate. We do not at this stage detail these matters although they are said by the pursuers to give rise to the same implication of fraud and dishonesty as founded upon in relation to the case laid against the first and second defenders. The grounds of appeal are to the effect that the conduct of the members of the tribunal in the course of the hearing was such as to cause the absolute privilege which would in ordinary course attach to such proceedings to be withdrawn and to taint all that followed, including the public statements issued by the tribunal relative to their determination. There is little doubt that, standing the law relating to absolute privilege founded upon by the Lord Ordinary, nothing that has been averred for the pursuers would serve to remove the absolute privilege attaching to the tribunal and the utterances of members of it in the course of the hearing where such utterances are connected to matters before it. In the recent case of Russell v Dickson 1998 SLT 96 reference was made to a decision of the House of Lords in Re McC 1985 AC 528 in the course of which certain of their Lordships reserved their opinion as to whether the common law liability of justices for acts done within their jurisdiction but with malice and without reasonable cause was obsolete in England. That being so, we consider that there may be some merit in this area of the law being re-considered by a higher court.

[10] The final factor upon which the defenders fixed was in regard to the competency of the conclusion which sought a joint and several decree against all the defenders, notwithstanding the fact that the grounds upon which the action was laid against the first and second defenders were to be distinguished from that laid against the fourth to ninth defenders. In this matter the Lord Ordinary found himself to be bound by the law as stated in Barr v. Neilsons (1868) 6 M 651. The facts in the present case are peculiar since the thrust of the case against each of the parties is to the same effect and the statements of which the principal complaint is made by the pursuers in the press release of the tribunal's decision and in the course of the subsequent press conference related to that decision, were made publicly and directed to the same audience. Moreover there was a peculiar relationship between the parties in the sense that the second defenders were responsible for the prosecution of the complaints which gave rise to the tribunal's decision. It was the public circulation of the allegedly defamatory statements which is said by the pursuers to have given rise to at least a substantial part of the loss, injury and damage claimed by the pursuers. A question may arise as to the relevancy of specific heads of loss which are related to subsequent actings on the part of the second defenders if the pursuers wish to continue to seek a joint and several decree. This does not necessarily detract from a stateable argument that in the particular circumstances a joint and several decree may be appropriate.

[11] We have reached the view that, as matters presently stand, the motions for caution should not be granted. We consider that there is a stateable case made against the first and second defenders and that there is likewise ground for a consideration of the law relating to absolute privilege so far as the case against the fourth to ninth defenders is concerned. Furthermore, we consider that there is a stateable case to be put forward in support of the joint and several decree sought by the pursuers. In these circumstances we do not consider that the action is so wholly devoid of merit that for that reason alone caution ought to be granted. While it would appear that there is good reason to hold that the pursuers are presently wholly unable to pay the sums remaining outstanding by way of payment of expenses to the second defenders, we observe that in Stevenson v. Midlothian District Council Lord Fraser at p. 58 referred, in this context, to "a failure to pay the expenses awarded against him in a previous unconnected action" (our emphasis). But in the present case the principal part of the outstanding expenses of some £122,000 is derived from the prior tribunal proceedings and hence connected with the present action. In addition, we understood that counsel for the first defender accepted (and there was no demur to this on the part of the other defenders) that if the pursuers were to succeed in securing damages in the present case, these could be offset against the outstanding expenses. We would add that, standing the careful and full treatment of the arguments placed before him in the Lord Ordinary's Opinion, we are not persuaded that the time likely to be taken on appeal is as long as suggested by counsel for the fourth to ninth defenders. In saying this we have taken into account the succinctness of submission, and its brevity, of the first pursuer's presentation of argument before us. Accordingly, we are not satisfied that the factors upon which the defenders have founded are so cogent and compelling as to displace the general principle that even an impecunious litigant should be entitled to present a stateable case without finding caution.