Case Summary and Outcome

The High Court of Justice Queen’s Bench Division dismissed a libel action on the grounds that there existed no serious harm to the reputation of the claimants under the Defamation Act of 2013. Alexander-Theodotou brought the action in relation to a Facebook Post and webinars that allegedly implied her law firm failed to protect the best interests of her clients who were victims of a real-estate scandal in Cyrus, one of whom had committed suicide after losing his life savings in the scheme. Due to the publications, she claimed she had been personally exposed to “hate, contempt and ridicule,” and that she had lost clients resulting in serious financial losses. While the Court found the meaning of the Facebook post was “unquestionably defamatory,” evidence failed to prove serious harm.  After assessing the gravity of the statements and the context of the publication, the Court concluded that not many of the readers of the Facebook post could have identified the claimant and those that could have, were already “dissatisfied ex-clients” or others who had a poor impression of the law firm prior to the post.

---

Facts

The libel action was attributed to two online publications alleged to have been made by the defendant, George Kounis, in and after 2017.  Kounis worked formerly for a solicitors’ firm called Maxwell Alves, but at the time of the action he worked independently.

The claimants included Dr. Katherine Alexander-Theodotou, a solicitor qualified to work in the UK and Cyprus through her UK firm, the Highgate Hill Solicitors and her Cyprus based firm, K Alexander Theodotou LLC.

The first publication complained of was a Press Release on a Facebook Page called “Cyprus Property Legal Action – Resolution and Collaboration”, hereinafter referred to as “the Facebook Post”. The post discussed a case surrounding a property investment scandal in Cyprus where numerous investors lost significant amounts of money. One of the investors, Phillip Davies, committed suicide after losing his life savings in the scheme. The post stated that Phillip Davies’ wife blamed the UK legal system for allowing predatory practices that fed “on the plight of victims,” and that she and her husband had lost 30,000 GBP on legal fees before a London firm breached the contract leaving them to find alternate representation. The overall implication was that certain legal firms failed to protect the best interest of their clients. Although, the post did not name any of the claimants, Alexander Theodotou alleged that it referred to her firms.

The second publication at issue was a “webinar” link sent via email on 18^th and 19^th of February to all the clients of the Cyprus Property Litigation service of Maxwell Alves. The webinars allegedly claimed that Alexander-Theodotou’s firms had been charging exorbitant fees with low success rates and it encouraged people to find better legal representation.

Due to these publications, Alexander-Theodotou claimed that she had been personally exposed to “hate, contempt and ridicule,” her reputation had been seriously harmed resulting in clients “shunning” or “avoiding” her, and that her UK and Cyprus firms were likely to suffer serious financial losses.

Kounis denied that the Facebook post referred to Alexander-Theodotou, was defamatory and disputed the alleged meanings attributed to it. He further required that Alexander-Theodotou prove that the publication caused serious harm to her reputation and resulted in serious financial loss. [para.10] Kounis also denied responsibility for the webinar, and that the impugned publication could even be classified as a webinar.

---

Decision Overview

The Honorable Mr. Justice Warby delivered the opinion of the Single Judge Court.

The court had three preliminary issues to address. First, whether the impugned statements referred to Alexander-Theodotou or her law firms. Second, whether the actual meaning of the impugned publications were defamatory and third, if they were defamatory, whether they were likely to cause serious harm to Alexander-Theodotou’s reputation within the meaning of Section 1 of the Defamation Act 2013 (Act). After resolving the preliminary issues, the Court had to decide whether to allow Alexander-Theodotou to amend her claim to include damages for inducement of breach of contract, among others.

The Court began by observing that assessing serious harm as a preliminary issue at trial was not common but that the ordinary rules as to the burden and standard or proof would apply. It referenced Lachaux v Independent Print Ltd. to establish the parameters for addressing serious harm at a meaning hearing. Following Lachaux, if the meaning of an impugned statement is found to be seriously defamatory, then “it would be proper to draw an inference of serious reputational harm.” [para. 35]  In the present case, the trial would therefore first have to “include the issue of whether and if so to what extent the Facebook Post complained of referred and was understood to refer to the claimants or any of them.” [para. 42] In order to do that, the Court would have to decide whether  “a reasonable reader would have understood that the words referred to the claimant,” and if so “whether a sufficient number of people who read the words did in fact understand the words to refer to him such that serious harm to reputation had been, or was likely to be, caused.” [para. 38, citing Gatley on Libel and Slander 12th ed at paragraph 7.3 A]

The Court then turned to the first preliminary issue, whether the impugned statements referred to either the first or second claimants. Relying again on the legal principles established in Lachaux, in defamation actions, the published words must be “of” the claimant. The claimant does not necessarily need to be named directly but if they are not named, then the circumstances of publication must lead “persons acquainted with the claimant to believe that he was the person referred to.” [para. 44] In the present case, the Facebook Post did not refer directly to the claimant and the identifying information was so sparse that “only a very limited class of people” might recognize the claimant. Hence, Alexander-Theodotou had to prove a case of “reference innuendo: that one or more reader knew certain special facts which would lead a reasonable person in their position to understand the words complained of” referred to the claimant. [para. 45] Here the Court found that the evidence allowed for reference to be established but on a very limited basis.

Next, the Court addressed the meaning of the words, and whether an “ordinary reasonable reader” of the impugned Facebook post would believe that failures by Alexander-Theodotou and her law firm had contributed to “driving Mr. Davies to suicide.” The Court found that they could not have had that impact. However, the Facebook post was not “a frivolous or transitory piece” on a personal Facebook page. It did make serious allegations blaming UK institutions, mainly the developer, the bank and an unnamed “London legal firm”. Hence, the Court determined that the natural and ordinary meaning to be:

“[t]hat the first and second claimants exploited the vulnerable position of Mr. and Mrs. Davies, victims of the Cyprus property mis-selling scandal, by charging them almost 30,000 GBP in fees to help them and then failing to protect their best interests, and forcing them to fund alternative representation.”

Relying on Thorton v Telegraph Media Group Ltd and Lachaux, the Court established the meaning of the words need only have a “tendency” to lower the estimation or attitude of right-thinking people towards the claimant. Based on those standards, the meaning of the Facebook post was “unquestionably defamatory.”

The Court then had to assess the claim of serious harm. According to s 1 of the Defamation Act 2013, “harm to the reputation of a body that trades for profit is not serious harm unless it has caused or is likely to cause the body serious financial loss.” [para. 57] The Act increased the threshold from substantial harm to serious harm, which is determined from the gravity of the statements published and the context of the publication. It also discarded mere tendency as a test. Further, Section1 requires proof, whether by evidence or inference, that a reasonable person would have understood the statements referred to the claimants and that a sufficient number of people read the publication to justify serious harm was caused.

Based on evidence provided by both the claimant and the defendant, the Court determined that serious harm could not be proved on the grounds that not many of the readers of the Facebook post could have identified the claimant and those that could have, were already “dissatisfied ex-clients” or others who had a poor impression of them prior to the post.

Finally, the Court turned to the amendment application introduced by the claimants for permission to amend to plead a claim in inducement of breach of contract. The Court refused to grant the permission on the grounds that it failed to have a prospect of success. The amendments were constitutive of two main elements, first, regarding a new allegation that the defendant had operated under an alter ego named “Guy Fawkes” and second with respect to concerns related to the webinars.

With respect to the first element, the claimants alleged that the defendant had been operating under the pseudonym Guy Fawkes, using an email address “rutrulyscrewed@gmail.com,” to encourage victims of the Cypriot property mis-selling scandal to break their contracts with the claimants. The Court, however, found this allegation to be “fanciful” and lacking sufficient evidence.

The second element pertained to two the webinars. The amendments proposed that by virtue of the webinars, the defendant induced the clients to breach the contract with the claimants by convincing them that they had been overcharged. The claim, however, failed to link the content of the webinars to the attendees who terminated their contracts and hence the Court held that there existed no causal link between the statements and lost income or profit.

In conclusion, the Court dismissed the amendment application and hence the action, but suggested that Alexander-Theodotou start a new action should she wish to pursue a claim for damages for inducing a breach of contract.

---