Tesco v The Guardian

It’s title may sound mundane, but Tesco Stores Ltd v Guardian News & Media Ltd and Alan Rusbridger looks set to raise fundamental questions about free speech and protection of reputation.

It comes as multinational retailer Tesco is also pursuing libel claims in Thailand against two writers and a former Thai MP over criticism of Tesco Lotus’s expansion there.

Tesco’s claim against the Guardian and its editor relates to two investigative reports, a leader column, and a podcast in February this year regarding alleged (but strenuously denied) tax avoidance in connection with the sale and leaseback of properties.

It alleges the coverage, which accused it of avoiding corporation tax using offshore arrangements, was plain wrong and damaged the company’s reputation by inaccurately portraying it as morally and socially irresponsible.

The claim is for damages and an injunction for libel and – unusually – malicious falsehood.

It alleges parts of the coverage were false and that, in view of the company’s clear rebuttals, the publications were malicious because the journalists either “well knew” the tax allegations were false or had “an utterly reckless disregard for their truth of falsity”.

At the time of writing, the paper’s Defence has yet to be filed, but it is likely to assert the coverage is protected by common law qualified privilege on the basis that it is responsible journalism in the public interest.

The Guardian may focus on what one judge called the “liberal wind” blowing from the appeal courts in favour of allowing the media leeway for getting public interest investigative stories ‘wrong’ without being liable.

This liberal trend can be traced back through the well-known cases of Reynolds, Bonnick, Jameel, and Charman.

Where it transpires that a defamatory report is untrue, the basic 3-point test for establishing a qualified privilege defence is now: (i) is the subject matter of public interest? (ii) was inclusion of the defamatory content justifiable, and (iii) were the steps taken to gather and publish the information responsible and fair?

Lord Hoffmann set the tone in Jameel when he said: “The fact that the judge, with the advantage of leisure and hindsight, might have made a different editorial decision should not destroy the defence. That would make the publication of articles which are, ex hypothesi, in the public interest, too risky and would discourage investigative reporting.”

The complexities of tax law form the context of the Tesco case. The quality of the reporters’ investigative journalism in that arena is likely to be scrutinised.
Tesco claims, for example, that following an email from the retailer’s Executive Director of Corporate and Legal Affairs, Lucy Neville-Rolfe, to the paper’s editor in December, which apparently contained denials of the alleged tax avoidance and clarification that the tax arrangements were unobjectionable, there was “no room whatsoever” for any belief that there was any avoidance of corporation tax by Tesco as was being alleged.

The email added: “There really is no story here and I would urge you to look elsewhere for genuine examples of businesses that pay little corporation tax rather than pursuing a leading British business that paid in excess of £1 billion in taxes last year.”

For its part, the Guardian has issued a statement saying its reporting raised legitimate inquiries into the company’s tax affairs and the litigation could “chill public debate”.

It said: “We have never claimed Tesco behaved illegally. These are matters of considerable political importance at present, debated by all parties.”

In the statement, the Guardian claimed that despite putting a series of questions to Tesco pre-publication, it was not given the full explanation that was provided post-publication.

It is understood the paper offered Tesco a right of reply column with a front page trailer but it opted for court action.

With defamation claims running in two jurisdictions, it remains to be seen whether the retailer will achieve its aims in litigation.

If nothing else, however, the Guardian case may provide another useful opportunity for courts to revisit the thorny topic of “responsible journalism” and pronounce which side of the line the paper’s coverage falls in the liberal climate of qualified privilege.

For more information, contact Nigel Hanson

Published 24/04/2008. The author of this article is Nigel Hanson