The false estate: Did property journalists mislead investors?

Irish investors who claim they were misinformed may sue journalists, says Matthew Bell

If the British property market resembles a shrivelling party balloon, in Ireland it looks more like the aftermath of the Hindenburg disaster. The bubble that started growing in the 1990s and accelerated out of control after 2002, when Ireland joined the euro, eventually burst spectacularly in 2008, and has yet to show any signs of recovery. Since the crash, those who lost a fortune or who have been left with unsellable property have been looking for someone to blame.

Now a hate figure has emerged in the form of the property journalist. Although a case has yet to be lodged, a number of aggrieved investors are said to be consulting Dublin lawyers about launching a case against certain journalists who, they believe, were responsible for misleading them into investing in developments that failed to deliver promised returns.

"Journalists fear they may be made legally liable for misleading readers who followed their advice and bought properties abroad, suffering major losses," says Richard Compton Miller, a property journalist himself. "There's a lot of anger among investors."

If such a case were brought, it would raise questions about the responsibility of journalists who use supposedly impartial editorial space to promote commercial developments. It may be understood among journalists that the editorials of glossy property supplements follow a less rigorous code of impartiality than conventional journalism – they are essentially vehicles for advertising – but to the consumer such a distinction may not be so clear.

Articles recommending holiday homes abroad are particularly contentious, says Compton Miller. "Journalists would go on trips to places like Bulgaria and recommend it as a place to buy a holiday flat. Now, places like Bulgaria have fared very badly, and people are feeling angry with the journalists who promoted it."

Property journalists have already fallen victim to the crash as newspapers have cut budgets and downpaged – or axed – their property supplements, because of loss of advertising. But many lawyers are sceptical about how strong a case against journalists could be. "The idea that any investor could sue a property journalist is barking mad," says Simon McAleese, a Dublin lawyer. "Though it wouldn't surprise me: people have been getting desperate to find someone to blame."

Even if it would be hard to prove that property journalists had deliberately misled readers, it is easy to see why investors might feel cheated. Property journalism has exploded over the past decade in line with the boom. But it has always been fraught with questions of independence, as developers use offers of lavish trips abroad to entice journalists to write about their projects.

"There are a huge number of freebies," says journalist Graham Norwood. "One top agent offered me cash to write a nice piece about aproperty. But part of the problem with international property is that the only way we can see a development is if the trip is paid for. Newspapers can't afford to send us, and we can't afford to send ourselves."

Because of this, it is rare to find developments getting a negative press. "If we don't like a development or property, we don't run an article," says one editor. This approach has led to certain supplements earning reputations for only running good-news stories, which investors might argue is misleading.

But, says Norwood: "Developers can be aggressive about coverage. They have threatened to sue newspapers if they publish negative editorial."

Among the victims of Ireland's property crash are newspaper groups themselves: at the height of the boom in 2006, The Irish Times bought property search website Myhome.ie for €50m, a sum it would now be unlikely to fetch. And with papers investing in the property market, the impartiality of property supplements became even more questionable. "There were certainly some journalists who were notorious for only writing good-news stories, and of questionable partiality," says one writer, who wishes to remain anonymous. "But most are like any journalists, they try to be fair and accurate."

Whatever a story's angle, the burden of due diligence would always rest on an investor, says McAleese. "Proving professional negligence is difficult at the best of times," he says. "But the argument here would be impossible to stand up. It is buyer's remorse gone mad. It's like the mad murderer's argument: you knew I was mad, you should have put me in a padded cell."

But McAleese does not rule out such a case being lodged. "We've had the most bizarre excuses trotted forward in the Irish courts for commercial naivety. The English have a much more stoical approach, they just say tough luck, and get on with it. Here we're still casting around for someone to blame."

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
Arts and Entertainment
<p><strong>2008</strong></p>
<p>Troubled actor Robert Downey Jr cements his comeback from drug problems by bagging the lead role in Iron Man. Two further films follow</p>
filmRobert Downey Jr named Hollywood's highest paid actor for second year running
Life and Style
Dale Bolinger arranged to meet the girl via a fetish website
life
Property
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
Life and Style
tech
News
The Commonwealth flag flies outside Westminster Abbey in central London
news
Arts and Entertainment
Struggling actors who scrape a living working in repertory theatres should get paid a 'living wage', Sir Ian McKellen has claimed
theatre
Extras
indybest
News
Skye McCole Bartusiak's mother said she didn't use drink or drugs
peopleActress was known for role in Mel Gibson film The Patriot
Arts and Entertainment
tvWebsite will allow you to watch all 522 shows on-demand
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Graduate Sales Executive

17.5k + Commission (£18.5k after probation period): ESI Media: You will be res...

PPC Account Managers

£25k - £30k (DOE): Guru Careers: Two expert PPC Account Managers are needed to...

PPC Manager

£30,000 - £35,000: Sauce Recruitment: PPC Manager urgently required for indepe...

Content Manager - Central London

£35000 - £40000 per annum + Benefits: Ashdown Group: Content Manager - Central...

Day In a Page

Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor