The House of Lords dismissed an appeal by the council from the Court of Appeal's decision (the Independent, 21 February 1992; (1992) QB 770) that a local authority cannot maintain an action for libel.
Articles appeared in the Sunday Times on 17 and 24 September 1989 which questioned the propriety of certain investments made by the council in administering its superannuation fund. They alleged that the council leader, David Bookbinder, was a prime mover in deals made with a 'media tycoon', Owen Oyston. The council, Mr Bookbinder and Mr Oyston brought actions for libel against the publishers of the Sunday Times, its editors and the journalists who wrote the articles. Mr Oyston's action was settled by an apology and payment of damages and costs.
The council claimed that it had been injured in its credit and reputation and had been brought into public scandal, odium and contempt and had suffered loss and damage. The preliminary point of law was whether a local authority is entitled to maintain an action for libel for words which reflect on it in its governmental and administrative functions.
Charles Gray QC and Heather Rogers (Kingsford Stacey) for the council; Anthony Lester QC and Desmond Browne QC (Biddle & Co) for the Sunday Times.
LORD KEITH said that there were only two reported cases in which an English local authority had sued for libel: Manchester Corporation v Williams (1891) 1 QB 94, which decided that the statement of claim disclosed no cause of action, and Bognor Regis Urban District Council v Campion (1972) QB 169, where the council was awarded damages.
The authorities established that a trading corporation was entitled to sue in respect of defamatory matters which could be seen as having a tendency to damage it in its business. Defamatory matter about trade unions might adversely affect the union's ability to keep members or attract new ones. Similar considerations could no doubt be advanced in connection with the position of a local authority.
There were, however, features of a local authority which might be regarded as distinguishing it from other types of corporation, whether trading or non-trading. The most important was that it was a governmental body. Further, it was a democratically elected body, the electoral process nowadays being conducted almost exclusively on party political lines.
It was of the highest importance that a democratically elected governmental body, or indeed any governmental body, should be open to uninhibited public criticism. The threat of a civil action for defamation must inevitably have an inhibiting effect on freedom of speech. 'The chilling effect' induced by the threat of civil actions for libel was very important.
Quite often the facts which would justify a defamatory publication were known to be true, but admissible evidence capable of proving those facts was not available. That might prevent the publication of matters which it was very desirable to make public.
A number of departments of central government in the United Kingdom were statutorily created corporations, including the Secretaries of State for Defence, Education and Science, Energy, Environment, and Social Services. If a local authority could sue for libel there would appear to be no reason why any of those departments was not also entitled to sue.
But there were rights available to private citizens which institutions of central government were not in a position to exercise unless they could show that it was the public interest to do so. The same applied to local authorities.
In both cases, it was right for the House of Lords to lay down that not only was there no public interest favouring the right of organs of government, whether central or local, to sue for libel, but that it was contrary to the public interest that they should have it. It was contrary to the public interest because to admit such actions would place an undesirable fetter on freedom of speech.
In the case of a local authority temporarily under the control of one political party or another it was difficult to say that the local authority as such had any reputation of its own. Reputation in the eyes of the public was more likely to attach itself to the controlling political party, and with a change in that party the reputation would change.
A publication attacking the activities of the authority would necessarily be an attack on the body of councillors representing the controlling party, or on the executives who managed its affairs. If any individual reputation was wrongly impaired by the publication, any of those could himself bring proceedings for defamation. Further it was open to the controlling body to defend itself by public utterances and in debate in the council chamber.
The conclusion must be that under the common law of England, a local authority did not have the right to maintain an action of damages for defamation. There was no difference in pirnciple between English law on the subject and article 10 of the European Convention on Human Rights. It followed that Bognor Regis UDC v Campion was wrongly decided and should be overruled.
LORD GRIFFITHS, LORD GOFF, LORD BROWNE-WILKINSON and LORD WOOLF agreed.
Ying Hui Tan, Barrister
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