Theedom v Nourish Training (t/a Recruitment Colin Sewell)

The claimant, Mr. Sam Theedom, was about 25 at the date of the publication of the emails complained of, which was 29^th to 30^th June 2014. At that time, Mr. Theedom had been working for the first defendant firm for about a year. The first defendant is a recruitment consultancy based in Leicester, where Mr. Theedom comes from. No doubt it has clients elsewhere, but a great deal of its work is in that general area of the country.

The claimant began work as a trainee recruitment consultant, but soon moved into working mainly on the employers’, as opposed to the employees’, side of the business and, in particular, on securing new business, mainly by telephone.

In early 2014, two of his fellow CSP employees, Kate Kirszak and Zoe Crutchley, left CSP for a rival firm. Shortly after Kate Kirszak left CSP, in about May 2014, she became the claimant’s girlfriend. This appears to have contributed to a deterioration in the claimant’s relationship with the management of CSP.

On 26^th June 2014, there was a meeting between the claimant and the managing director of CSP, Mr. Karl Purviss. During that meeting, the claimant was accused of leaking confidential information to Miss Kirszak and Miss Crutchley and their employer. It is disputed whether, at that meeting, the claimant was dismissed or, on the other hand, he resigned, but it appears clear that from that date his employment with CSP came to an end.

Pursuant to the confidentiality clause in his employment contract, on 27^th June 2014 the claimant signed an undertaking which, among other things, listed 17 client companies with which he was not to deal for a period of six months.

On 29^th to 30^th of June 2014, the second defendant, Mr. Colin Sewell, who is described as the management partner of CSP and appears to have been, unlike Mr. Purviss, Mr. Theedom’s immediate manager, sent the emails complained of to a total of 124 different email addresses, that is to say different people, working for 102 different companies. Some companies received several emails, others only one. All of the recipients of the email were actual or potential customers of the first defendant; and some, though not all, were companies or persons with whom the claimant had had some dealings on behalf of CSP. I will deal more fully with the content of the email later in this judgment, but suffice it to say that the subject header says, “Dismissed for gross misconduct,” and that the claimant is expressly named as the person who has been dismissed. (I should also note that the defendants have never published any form of correction, retraction or apology.)

Having left the employment of CSP, the claimant had no difficulty in securing several job interviews in the recruitment sector and, on 21^st July 2014, he began a new job of a broadly similar nature in the Leicester office of a recruitment firm called Quest. He still retains that job now, 18 months later. Over that period, his work has been confined to Quest client employers based within the county of Leicestershire.

The claimant had found out about the emails almost immediately, though he did not know until disclosure in this action the precise distribution. After some discussions with CPS about the email, he contacted a firm of solicitors in October 2014, and was put in touch with his present solicitors in March 2015. Proceedings were commenced and, by consent, it was ordered, on 14^th September 2015, that the present preliminary issue should be the subject of a trial and that service of a full defence should be postponed pending the hearing.

Disclosure and exchange of witness statements on these issues, and specifically on the seriousness issue, have taken place, and the preliminary trial has taken place before me over part, though not all, of three court days. This is now the fourth. The claimant and Mr. Purviss gave oral evidence and were cross-examined and other evidence was given in written form. I reserved judgment, save that I had given the parties at the end of Day 2 the defamatory meaning that I proposed to find, in order to assist them with their submissions on the issue of seriousness.

The readers are all business people, reading a business email from the managing partner of a firm known to them, either as an actual provider of their staff or at least as offering them that service.

Specifically, the readers are employers, reading a message from a fellow employer about the gross misconduct of an employee in his employment.

Further, the readers are being told that that employee has betrayed not only his own employer’s confidences, but also those of the employer’s clients, that is the confidences either of the recipients themselves or people in a similar position to themselves.

Finally, the readers are being told that they, themselves, may be approached by the disloyal employee’s associates, to whom he has given that confidential information.

In addition to satisfying all the previously existing requirements of the common law, a defamation claimant must now establish, as a substantive element of his claim, that the statement complained of has in fact caused or is likely to cause serious harm to his reputation.

Under s.1(2), a body trading for profit must, in order to establish that serious harm, show actual or likely serious financial loss; but a natural person, such as the present claimant, does not have to satisfy that further requirement.

Section 1 is concerned only with harm to reputation, not with the other component of defamation damages in cases involving a human claimant, namely injury to feelings; but unless serious harm to reputation can be established, injury to feelings alone, however grave, will not found a defamation claim.

Section 1 requires the claimant to prove as a fact, on the balance of probabilities, that the statement complained of has caused or will probably cause serious harm to his reputation.

Depending on the circumstances of the case, the claimant may be able to satisfy s.1 without calling any evidence, by relying on the inferences of serious harm to reputation properly to be drawn from the level of the defamatory meaning of the words and the nature and extent of their publication.

It is open to the claimant to call evidence in support of his case on serious harm and it is open to the defendant to call evidence in rebuttal, or indeed to demonstrate positively that no serious harm has occurred or is likely to do so.

It will often, though not always, be appropriate, as an exercise in effective case management, to direct that the issue of serious harm be determined as a preliminary issue, together with and immediately following the closely related issue of actual defamatory meaning.

It is important to bear in mind that s.1 is essentially a threshold requirement, intended by Parliament to weed out those undeserving libel claims otherwise technically viable, but which do not involve actual serious harm to reputation or likely serious harm to reputation in the future. Once that threshold has been passed, no useful purpose is served at this early stage of the proceedings by going on to consider evidence which is really material only to the quantum of damage if liability is proved.

There is an unresolved question of law under s.1 as to the date at which the likelihood of future serious harm falls to be assessed. Should it be the date of issue of the claim or the date of the s.1 hearing itself? In Cooke, Mr. Justice Bean favoured the first approach and in Lachaux, Mr. Justice Warby favoured the second. In this case, I do not consider that that question arises and I do not propose to address it. Proceedings in this case were issued more than six months after the last publication complained of and, if the requirement of existing serious harm to reputation cannot be established, then nothing in the facts of this case suggests that future harm to reputation is likely, (as opposed to the future adverse consequences of present harm to reputation).

the inferences of serious harm to his reputation to be drawn from the words complained of and the nature and extent of their publication; and

evidence of specific instances which he says demonstrate directly that such serious harm has in fact occurred.

The defendant challenges those inferences and challenges that evidence. It also advances a positive case: that in fact, when one looks at the claimant’s success in his new employment since the emails, it can be inferred that it is unlikely that he has suffered or will suffer any serious harm to his reputation as a result of the emails.

The publishees. How many of them knew the claimant at the time of publication? How many of them were likely to come across him in his new job? To what extent were the allegations likely to percolate from the original publishees to a wider circle?

Actual responses to the email. What direct evidence, as opposed to inference, is there that any of the publishees were or were not in fact influenced against the claimant by the emails?

The claimant’s subsequent progress. How is the claimant doing in his new job? And what inferences flow from that about the degree of harm, if any, done to him by the libels?

I shall deal with each of those three broad topics in turn.

Although the emails state that they are being sent to all CSP’s customers and companies CSP has previously been in touch with, in fact they were sent to a significantly smaller group of 102 companies. The basis on which this selection was made is not clearly stated in the defendants’ evidence and the writer, Mr. Sewell, has not yet put in any evidence. The recipients include 16 of the 17 close clients of the claimant set out in his severance contract, to which I have referred, but also include many companies with which it appears he had, as yet, had little or no contact while at CSP. (Since the mischief alleged against him is passing information to Miss Kirszak and Miss Crutchley, it may well be that the list also includes some of their former clients, whether or not the claimant himself directly had dealings with them.)

There was a dispute of fact about the extent to which the claimant’s work for CSP had been confined to the “industrial” sector in their parlance, that is to say firms in the world of logistics, warehousing or food production, and the extent to which his work had crossed over into the “technical and engineering” sector. The claimant said that there was considerable overlap, because companies in one sector might require workers in the other. On his own evidence, the claimant had mainly been concerned with the industrial sector while at CSP. So, to the extent that the publishees were outside that sector, it follows that they would be less likely to have known of him at the date of the email. However, as he pointed out, he has a very unusual surname; people who did not actually know him before might remember him in future if he contacted them, and might remember that he was the person referred to in the email.

An important point made by the claimant was that some 75% of the companies to whom the emails were sent are based in Leicestershire, which is where his new job for Quest is focused. The prospect that he might, in future, come into contact with a person who has read or heard of the emails and, for that reason, holds him in low regard is plainly one that has to be taken seriously.

I was less persuaded by the claimant’s proposition that in this case the emails are likely to have percolated more widely around the local business world than just amongst the original circle of recipients. It is, of course, a commonplace that once a defamatory allegation has been put into circulation by the primary publication, it is likely to be spread more widely by secondary repetition, “like ripples on a pond”. This is a natural consequence, for which the primary publisher may be held liable in damages. But for that to happen, there must be a medium of circulation, in the form of some zone of contact between the primary publishees and the secondary publishees to whom they repeat it. The claimant, in his evidence, referred to the world of recruitment consultants as a “gossipy” world, and no doubt he is right.But it is important to note that the emails were not sent to recruiters, they were sent to employers in a variety of different industries, who have no very obvious reason to pass the information on to other companies outside that circle. I would however accept that there is likely to be a degree of percolation within each of the recipient companies. It is noticeable that, though, as considered below, the claimant describes several encounters with people who had received the email from CSP, he has had no contact with people who had not received it but still mentioned it to him. (He was sneered at by one person from CSP, but it appears to me to be at least as likely that the information was passed on to that person within CSP as that person within CSP in fact got the information from an email recipient, so I do not regard that as a material piece of evidence.)

As has always been permitted when assessing libel damages, the parties were not confined to inferences about the reaction of the publishees to the words complained of. They were entitled to rely on direct evidence of written or oral contact with the publishees to demonstrate the actual effect, if any, of the words complained of upon the claimant’s reputation.

The defendants disclosed the direct responses they had received to the emails. The great majority of recipients, it appears, did not respond at all. Two or three recipients expressed general indignation at such disloyal conduct by an employee, but none referred expressly to the claimant.

The claimant disclosed an email from a recipient company called Pallex, who had told him, when he approached them on behalf of Quest, that, due to unforeseen circumstances, they were not able to use Quest. Not surprisingly, the claimant put this forward as evidence of harm done to him by the emails. Subsequent correspondence between CSP and Pallex suggest that it is more likely that what Pallex was concerned about was the possibility that if they dealt with Mr. Theedom they would be abetting him in a breach of his restrictive covenant, rather than with the issue of whether or not he was guilty of gross misconduct.

The claimant also gave evidence of eight direct contacts between himself and various recipients of the email. The defendants were able to obtain a rebuttal, or at least response evidence, from three of them. I will deal first with the five in relation to which no such evidence has been obtained at this stage. The claimant described the following incidents, and I summarise them briefly:

The other three cases relied on by the claimant are those where the defendants have been able to obtain or, at any rate, put before the court, the comments of the claimant’s interlocutors.

To my mind, this is the most formidable part of the defendants’ case in rebuttal of the claimant’s claims of serious harm. Notwithstanding these emails, which according to the claimant were widely circulated among influential people with whom he would wish to do business, the evidence is clear that:

That the claimant was able to get interviews and a job in the recruitment sector may not be very significant to the serious harm issue, bearing in mind that the email had not been sent to recruitment companies. But the fact that the claimant has since done well in a job that involves wide contact with local industry, including, it is to be inferred, many recipients of the email, is certainly a substantial factor to be weighed in the balance on the defendants’ side in deciding whether or not serious harm has been sustained. This is especially so because the libel is confined entirely to his reputation in business. Although a human claimant does not have to prove pecuniary loss, pecuniary loss will often go hand in hand with injury to reputation in business. So this has to be regarded as a strong point on the defendant’s side of the issue.

Neither the Act nor the previous authorities to which I have referred provide much specific guidance in relation to what is meant by “serious” in respect of the requisite level of harm that must be done to one’s reputation to entitle one to bring a defamation claim. Some guidance is gained from the judgment of Mr. Justice Warby in Lachaux, above, especially at paras. 29 and 50. The term ‘serious’ is to be given its meaning as an ordinary word in common usage in the English language. The test imposed by s.1 is more demanding than the concept of substantial injury, as defined in Thornton v TelegraphMedia Group Ltd. [2010] EWHC 1414 (QB) and stiffer than the abuse of process test applied under Jameel v Dow Jones & Co. Inc. [2005] EWCA Civ 75.

Each case will have to be considered in the light of its own circumstances. I consider it entirely possible that similar allegations, similarly published, might lead to different conclusions on “s.1 seriousness” in different cases. A factor of considerable importance is likely to be the circumstances of the particular claimant, since it is the seriousness of the injury to his or her reputation that has to be taken into account. Put another way, the question is not whether the case is a serious one by comparison with other libel actions that might occur; the question is whether it is a serious matter for this individual claimant, so far as the actual harm to his reputation is concerned.

In this case, and perhaps in many others, an important consideration in deciding whether the words pass the threshold of seriousness is whether, assuming them to be false, they would give rise to a reasonable need for an apology or for vindication. In the case of Cooke, referred to above, Mr. Justice Bean viewed the making of an immediate and reasonably thorough and prominent apology as a very important factor in preventing or dispelling serious harm to reputation, even from a publication in a national newspaper. Here there has been no such apology, so the converse question arises: are these emails and their likely effects such that serious harm to the claimant has occurred and will persist if no vindication is obtainable? Apart from compensation for injury to reputation and feelings, libel damages (and/or nowadays a published report of the court judgment under s.12 of the 2013 Act) serve the valuable function that, if the libel should crop up in future, the claimant has something important that he can point to as a vindication, as proof of his innocence. But if the circumstances of a case are not such as to call for that vindication, that may be a clear sign that the level of harm does not cross the threshold of seriousness.

When, as here, one has:

The rebuttal evidence here has established that the claimant has suffered no demonstrable financial loss and that relatively few recipients of the email are positively known to have taken adverse action against him as a result. But, as the Act specifically provides, pecuniary loss is not a requirement for a human claimant, and its absence does not rebut the inferences flowing from the libel itself. Similarly, the fact that few publishees have manifested hostility to the claimant’s face is not a reliable guide to his standing in the eyes of those who remain silent.

No steps have been taken to withdraw or correct the email, let alone to apologise for it, so whatever harm it originally caused is likely to have persisted.

The present trial has demonstrated a further escalation in the conduct of s.1 hearings. In Cooke there was no cross-examination on either side. In Lachaux there was cross-examination of the claimant. In this case, both the claimant and the second defendant have been cross-examined, and there was the prospect of calling further oral evidence to rebut the claimant’s case on serious harm by reference to specific instances relied on by him. In addition, his general credibility was called into question.

The parties’ costs budgets show that the claimant has spent over £100,000 of costs (inclusive of VAT but not success fees and insurance) and the defendants about £70,000, in respect of this phase of the case alone.

In the result, the hearing of evidence has added little or nothing to the conclusions that an experienced defamation judge would have drawn simply from reading the email and considering the agreed distribution list.

The reason for this is that s.1 sets a threshold test; and the threshold is simply that there shall have been serious harm to reputation. Once that level is passed, further evidence goes to quantum only. Throughout this trial, my sense has been that that distinction was in danger of becoming blurred or lost sight of.

Assuming this action now goes to a final trial, there is a likelihood that there will be a wasteful duplication of evidence and cross-examination already carried out before me and/or that the ultimate trial judge will be vexed with submissions about what has or has not been determined in the course of this phase of the trial.

I have already mentioned the difficult position of a judge invited to reach a conclusion on the claimant’s general credibility at this early stage of the proceedings, without being able to consider much relevant evidence one way or another on that issue, which is likely to be before the court at a later stage.

For all these reasons, it appears to me that the Masters considering whether to direct trial of a preliminary issue under s.1 should exercise as much caution as they would in respect of other classes of case, and should decline to do so if the exercise is likely to involve a lengthy evidential dispute or to overlap with other factual issues arising later in the case. Unfashionable as it may appear, I consider that there is much to be said in this area for asking a judge to rule on whether the case is capable of passing the s.1 test, or on the other hand whether the defendant has any real prospect of establishing that it does not. That question could be determined without hearing any evidence, probably alongside the closely-related issue of defamatory meaning. If the court concluded that there was a live issue under s.1 to be decided, the judge would then be in a good position to direct whether it would be better dealt with as a preliminary issue or as a part of the ultimate trial. But if a routine practice develops of listing such preliminary issue trials uncritically, that is likely to increase the overall cost and delay of libel cases, which is the opposite of Parliament’s clear intentions in passing s.1.