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Court of Appeal Substantially Reduces Award of Damages for Defamation from €10 million to €250,000

AUTHOR(S): Sharon Daly, April McClements
PRACTICE AREA GROUP: Defamation and Privacy, Commercial Litigation and Dispute Resolution
DATE: 19.03.2019

The Court of Appeal, in the landmark judgment of Kinsella v Kenmare Resources plc & Anor (1) delivered on 28 February 2019, has set aside an award of damages of €10 million as being disproportionate, unjust and unfair in the circumstances.  This had been the highest award of damages for defamation in Ireland until it was set aside.  The Court of Appeal substituted the original jury award of €10 million (€9 million in compensatory damages and €1 million in aggravated damages) for an award of compensatory damages of €250,000.

Matheson was instructed by the Defendants in relation to the appeal.

Facts

In 2010, a High Court jury found a press release issued by Kenmare Resources plc to be defamatory of the plaintiff. The jury awarded the plaintiff €9 million in compensatory damages and €1 million in aggravated damages. Kenmare appealed the jury determination on a number of grounds, including that the damages awarded to Mr Kinsella were so unreasonable as to be incapable of being upheld on appeal.  While the Court considered four distinct issues, (2) the present update deals with the question of damages only.

Decision

The Court of Appeal (Irvine, Whelan and Baker JJ) unanimously found the award of compensatory damages of €9 million was disproportionate, unjust and unreasonable in circumstances where no reasonable jury could have considered that an award of that magnitude was necessary to compensate the plaintiff in respect of the injury he sustained and in order that he might establish his reputation.

The Court of Appeal held that, notwithstanding the fact that an appellate court should be slow to usurp the role of a jury in assessing damages for defamation, the award of compensatory damages should be set aside, having regard to the following factors:

  1. The award was approximately seven times greater than any previous award of damages made or upheld by the Supreme Court in a defamation action, with the award in Leech (3) being the highest at €1.25 million.
  2. The award was disproportionate when considered against awards granted to individuals that have suffered the most severe personal injuries as a result of negligence, which serves as a good moral compass as to what is a proportionate and fair award for defamation.
  3. The €9 million award, if allowed to stand, potentially would not even represent the ceiling to be applied in defamation actions. Awards of this magnitude for defamation had the potential to chill free speech and to be deemed offensive to public opinion.
  4. The gravity of the libel and its effect on the plaintiff was of a significantly lesser magnitude than in previous defamation proceedings in the state, including those in Leech, De Rossa (4) and O'Brien (5).
  5. The extent of the publication of the libel was not, in this case, a significant factor as the plaintiff was not a well-known public figure. In contrast, the extent of publication was a much more damaging to the respective plaintiffs in O'Brien and De Rossa.
  6. Awards of damages in defamation proceedings must be fair to the parties and the Court was cognisant that the second named defendant was a natural person and is jointly and severally liable for the award.  The award of damages was wholly unfair to the defendants and an “unjustifiable windfall” for the plaintiff.
  7. The Court was conscious of the judgment of the European Court of Human Rights in Independent Newspapers (Ireland) Ltd v Ireland (6) which held that appellate courts have a role in safeguarding against disproportionately large awards of damages in defamation actions and, in particular, are obliged to scrutinize carefully awards which appear 'unpredictably high'.

The Court of Appeal also held that the award of aggravated damages of €1 million should be fully set aside. In coming to this conclusion, the Court had regard to the fact that the purpose of an award of aggravated damages is to compensate a plaintiff for some additional injury sustained as a result of the motivation or conduct of the defendant beyond the libel the subject matter of the proceedings. The Court of Appeal held that, on the evidence before the High Court, there was no basis to justify the trial judge leaving open to the jury the possibility of an award of aggravated damages. The Court of Appeal further held that, even if the issue did fall to be determined by the jury, the award of €1 million for aggravated damages, which was almost as large as the highest ever award made in the State for defamation, would have to be set aside as disproportionate, unjust and unfair in all the circumstances.

Once the Court of Appeal determined that the damages award should be set aside it had two options: (1) refer the matter back to the High Court for a further trial to assess appropriate damages or (2) substitute in its own award of damages. The Court concluded that this was a case in which a substituted award would be appropriate as over 11 years had passed since the events which were the subject matter of the proceedings and there was a strong incentive towards bringing finality to the litigation.

In assessing the damages, the Court reiterated that it did not view the defamation in the present case to be as serious as that in Leech, O'Brien or De Rossa. It did, however, view the defamation as being more serious than that in the recent decisions of Christie v TV3 Networks Ltd (7) or Speedie v Sunday Newspapers Ltd (8). Having assessed the scale of damages across these cases, the Court concluded that an award of damages of €250,000 would be just and fair compensation for the plaintiff.

The Court of Appeal also made findings in relation to qualified privilege and the aspects of a Jury determination that can be successfully challenged on appeal.

Should you have any queries arising from this decision, please do not hesitate to contact Sharon Daly, April McClements, Darren Lynch, Thomas Turner or your regular Matheson contact.

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  1. Kinsella v Kenmare Resources plc & Anor [2019] IECA 54
  2. The four grounds being: (1) defamatory meaning; (2) qualified privileged; (3) malice; and (4) damages.
  3. Leech v Independent Newspapers [2014] 2 IR 214
  4. De Rossa v Independent Newspapers [1999] 4 IR 432
  5. O’Brien v Mirror Group Newspapers [2000] IESC 70
  6. Independent Newspapers (Ireland) Ltd v Ireland [2017] ECHR 28199/15
  7. Christie v TV3 Networks Ltd [2017] IECA 128
  8. Speedie v Sunday Newspapers Ltd [2017] IECA 15

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