White, Sam --- "'Publish and Be Damned': The Unseen Impact of Australia's Defamation Laws" [2023] PrecedentAULA 43; (2023) 177 Precedent 23

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‘Publish and be damned’:

The unseen impact of Australia’s defamation laws

By Sam White

What does defamation cost the Australian media?

A simple response would tally up the bottom line financial cost, including the cost of engaging media lawyers (like me) at both the front and back end. But when one looks behind the curtain, the financial cost is only one part of the broader impact that defamation laws have on the media.

Australian reporters and editors have long bemoaned Australia’s defamation laws. In the journalists’ eyes, our defamation laws are skewed toward plaintiffs. In many cases, they argue, the tort seems easy to establish but difficult to defend.

On the other hand, detractors of the media would say journalists’ complaints are misguided and that the media should take greater care in its reporting. In the words of the Duke of Wellington: the media should ‘publish and be damned’. Those detractors would say that if the media is not able to defend its work to the standard required by the law, they deserve to wear the consequences.

Mercifully, this article will not try to resolve the vexed question of how we might change the law. In truth, from the media’s perspective, satisfactory change would require a fundamental overhaul of hundreds-year-old law, a complex and time-consuming task. Instead, this article considers the impacts of our existing defamation laws on the media. Some, like the financial impact, are obvious. Others, however, are hidden from view.

By merely highlighting these impacts I am in no way suggesting that the media should never have to bear the consequences of its reporting. In some cases, the media should face the consequences where significant errors in reporting defame an individual. The cost of a wholly unrestrained media, as in any industry, could be extreme and negative. But public interest journalism often involves important ideas that warrant debate and dispute. The question is how the scales ought to be balanced.

In recent weeks the Federal Court has released its judgment in the leviathan Roberts-Smith v Fairfax Media Publications Pty Limited (No 41)^[1] (Roberts-Smith). The case, which has been dubbed ‘the defamation trial of the century’, is a suitable study by which to gauge the various impacts discussed below.

DISPROPORTIONATE FINANCIAL COST

All litigation is expensive. However, relative to the damages payout available in most cases, the cost of defamation litigation is wildly disproportionate to many other commercial disputes.

Media reports have estimated legal costs in the Roberts-Smith litigation to be between $25 million and $40 million.

Clearly such a high figure would be commercially justified in cases where the amount of damages sought far exceeds the legal costs. It might make sense to spend $25 million on legal costs in a case worth $100 million.

But commercially, defamation cases are wildly different.

The maximum general damages recoverable by plaintiffs in Australian defamation claims sits at around $400,000. In some cases, plaintiffs can additionally claim and recover aggravated damages or, in rarer cases, special damages.

But even the highest damages awards in Australian defamation history do not come remotely close to the costs estimates of Roberts-Smith. Notably:

● In 2017, Rebel Wilson was awarded $4.7 million in special damages, only to have that figure slashed by $4.1 million on appeal.^[2]

● In 2019, Geoffrey Rush was awarded $2.9 million, an amount that was upheld on appeal, making it the largest award for an individual in Australian history.^[3]

● In 2019, four Queensland brothers were awarded a total of $3.6 million (‘only’ $900,000 each).^[4]

Even in these extreme cases, the commercial realities are almost always the same: it rarely (if ever) makes commercial sense for either plaintiff or defendant to run the case to its conclusion.

So why then do litigants persist? Well, quite obviously, defamation is not simply a numbers game. Peoples’ and mastheads’ reputations are on the line. In some cases, like Roberts-Smith, even more significant issues of public interest are at play. In such cases, media defendants (and defamation plaintiffs) feel they have little choice but to fight the case head on, despite whatever exorbitant and disproportionate costs are involved.

One criticism of the design of our laws is that it commonly forces media defendants to spend these many millions of dollars to defend what, on almost any measure, is worthwhile (even if divisive) public interest journalism. Most people would agree that the Australian public had a right to know about the allegations against Ben Roberts-Smith, even if the reporting uncovered uncomfortable truths. The media knows that cases involving difficult stories may cost vast sums of money to defend, yet some outlets publish anyway. It is, rightly or wrongly, a cost of business.

Add to this the cost of obtaining legal advice pre-publication and the cost of resolving other defamation complaints prior to litigation, and it is quite obvious that defamation laws have a significant financial impact on the Australian media.

Legal costs are significant and disproportionate when compared to the other operating costs of many newsrooms. They take away from what newsrooms would prefer to be investing in: resources, processes and systems that improve the delivery of content to audiences.

TIME SPENT ON LITIGATION IS TIME LOST

A less obvious impact of defamation laws is the sheer amount of time journalists and newsrooms addressing defamation-related issues.

A corollary of this impact is stress and burnout associated with hard fought litigation.

These impacts are demonstrated most obviously when a reporter is forced to spend time responding to a claim. That is time taken away from a journalist’s real job and their craft. It is not just the reporter’s time – others in the newsroom, from editors to audience analysts, are also called on to support the collective effort.

When litigation commences, reporters play a critical role in mounting the media’s defence. They are relied on to gather evidence and, in some cases, to facilitate conferences with witnesses. In practice, this can represent several hours every week where reporters are taken away from their day jobs. It is, in effect, a second job in itself.

Further, the journalist will often be named as a party to the plaintiff’s claim. Other sorts of court actions will name only an employer, however, in defamation cases, the employee (the journalist) is often a separate party. This role and the hands-on involvement required to defend a claim can cause significant added stress.

Nick McKenzie, the award-winning reporter who was a co-defendant in Roberts-Smith, has (since winning the case) said that the years of litigation were some of the most stressful in his life. I witnessed this stress firsthand, as McKenzie was regularly called on not only to clarify factual issues with his own legal team, but also to respond to pressure tactics by his opponents in the litigation and a relentless public relations campaign against his work. McKenzie is no shrinking violet: he routinely writes about organised crime, corruption and political interference, which just goes to show just how considerable the stress on reporters can be.

McKenzie’s co-defendant, Chris Masters, once said litigation has been the biggest frustration of his career.

‘It's death by a thousand courts. It almost drove me out of the game because it almost turned me into a professional witness and defendant.’^[5]

Ultimately, McKenzie and Masters have been vindicated in the most resounding way imaginable. But was it an easy road for them? Certainly not.

THE CHILLING EFFECT

The issues highlighted in the above two sections demonstrate why reporters and editors may be reluctant to publish content with a high defamation risk, notwithstanding the public interest. When wading into these choppy waters, experienced newsrooms know all too well the danger that lies ahead.

And so, to limit or avoid those consequences, newsrooms might consider amending the reporting or, in extreme cases, ‘spike’ stories altogether. This phenomenon is broadly referred to as the ‘chilling effect’ that defamation laws have on reporting. A textbook example of the chilling effect is where a newsroom has prepared content that is deemed to be in the public interest, but after receiving legal advice on the risk involved, the newsroom decides not to publish. That is to say, the story is ‘spiked’.

There are also more subtle examples. They range from newsrooms deciding to tinker with the language of a publication to lower defamation risk, or to restructure it completely to avoid identifying a potential subject. In some cases, certain angles of stories are truncated or cut-off altogether. These are all examples of how defamation laws interfere with journalistic craft.

Even more pervasive can be a journalist’s decision not to pursue a subject for fear of what may lie five or ten steps ahead. Such a decision might be made because of the wealth, status or even reputation of an individual (for example, if they are known to be litigious). These decisions are troubling and demonstrate just how insidious the chilling effect can be.

One other manifestation of the chilling effect to consider is how defamation claims stymie or halt the discussion of matters of public interest. Often, politicians, public figures or organisations choose not to engage in public debate on a subject because those matters have become the subject of defamation litigation. The catch cry is something to the effect that ‘it would be inappropriate to comment on how to respond to war crimes allegations while the Roberts-Smith matter is before the courts’. Once the Roberts-Smith matter was launched, many politicians used the litigation as a shield to avoid answering uncomfortable questions on allegations of war crimes by Australian soldiers. It restricted public debate on the subject at a time when it was needed most.

IMPACT ON CONFIDENCE IN THE MEDIA

Finally, it is important to acknowledge the impact that defamation cases have, at a high level, on the reputation and the legitimacy of the media as an institution.

Whatever one might think of certain corners of the media, there are other corners that are an essential part of the democratic function and social and corporate accountability. Of course, just as a properly functioning and diverse media can reflect the good democratic health of a society, conversely, a dysfunctional media can reflect the opposite. This is why public impressions of the media as an institution are so important: they can, in an incremental manner, affect public confidence in other institutions. If the media is seen as biased or as a puppet of the government of the day, the government too loses credibility and public confidence.

A masthead’s reputation is built on its reliability and legitimacy. It is critical to establishing and maintaining trust with its audience. Collectively, these reputations maintain public confidence in the media as an institution.

It is often acknowledged that editorial decisions or direction can ‘damage the masthead’, meaning they can tarnish the reputation of a particular media outlet. But just as editorial decisions can damage the masthead, so can other external attacks, including adverse outcomes in defamation cases.

Irrespective of the merits of any particular case, if a plaintiff is awarded damages, if a defence is struck out, if an apology is published, the public will understandably read that news and think less of the outlet that lost the case. The masthead is damaged; its legitimacy undermined. Such loss of confidence might sometimes be justified, however, there are other times when a loss in a defamation case should not, in and of itself, be a marker of failed journalism. The fact is that defamation cases can easily be lost on technical grounds even when the content of the impugned article is substantially true or, in any event, is clearly in the public interest.

While a loss in one defamation case might be a minor blemish on one masthead’s reputation, a series of losses, or a significant loss, can lead to greater erosion of the public’s confidence of media generally. As a collective, if the media is constantly seen to be losing defamation cases, not only will the broader masthead and institution be damaged, but it has the potential to irreversibly impact upon public confidence in the media.

CONCLUSION

The impacts of defamation laws and losses suffered in a defamation litigation go well beyond the bottom line dollar figures that media companies pay their lawyers. These impacts are wide-reaching and range from the impact on an individual journalist forced to spend time worrying about legal risk when planning an article to the potential loss in public confidence in the entire institution of media itself.

Sam White is a media lawyer at Nine Entertainment Co, publisher of The Age, The Sydney Morning Herald, The Australian Financial Review, The Nine Network and other publications. Prior to joining Nine, Sam was a Senior Associate at MinterEllison in the media team.

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^[1] [2023] FCA 555.

^[2] Bauer Media Pty Ltd v Wilson (No 2) [2018] VSCA 154.

^[3] Nationwide News Pty Ltd v Rush [2020] FCAFC 115.

^[4] Wagner v Nine Network Australia [2019] QSC 284.

^[5] See S Molitorisz, ‘Chris Masters quits Four Corners’, The Sydney Morning Herald (November 10, 2008) <https://www.smh.com.au/entertainment/chris-masters-quits-four-corners-20081110-gdt2as.html>.