English Courts In The Dock On "Libel Tourism"

By FINANCIAL TIMES | by Michael Peel and Megan Murphy
Wednesday, April 2nd, 2008 @ 5:47AM

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Rinat Akhmetov, a Ukrainian energy tycoon ranked by Forbes magazine as the world’s 214th richest billionaire, is no stranger to England’s libel courts. He has launched successful actions in London over the past year against Kyiv Post and Obozrevatel, two Ukrainian internet journals. Laura Tyler, his lawyer, says Mr Akhmetov went to England because he has a reputation and business links there, and because its court rulings are internationally acknowledged as “just and fair”.

“He doesn’t want to have a judgment that people will wave around and say, ‘You paid for that,'” she says. It is the kind of argument derided by growing numbers of international critics of Englandメs strict defamation laws. Whatever the merits of Mr Akhmetov’s actions, critics say, they provide a quintessential example of “libel tourism” by rich public figures who use courts in London to pursue cases that have their roots elsewhere.

Hugh Tomlinson, QC, a London-based libel barrister, says of Mr Akhmetov’s case against Obozrevatel: “This is a Ukrainian attacked in a Ukrainian newspaper in Ukrainian in Ukraine.” US critics argue that libel tourism is a spreading disease that harms free speech around the world, preventing legitimate reporting on public figures ranging from powerful tycoons to alleged financiers of terrorism.

Rachel’s law

The New York law passed this week to combat so-called libel tourism is a response to the defamation saga involving Rachel Ehrenfeld, an author who lives in the state. The rule was drafted after Ms Ehrenfeld failed to obtain a court order in New York preventing Khalid Bin Mahfouz, a Saudi Arabian businessman, from pursuing her for damages over a libel judgment he won against her in London. Although libel lawyers say such a damages claim would have been highly unlikely to succeed, supporters of the new legislation – dubbed “Rachelメs law” by at least one commentator – say it gives Ms Ehrenfeld and other writers an extra degree of security.

This week legislators in New York passed a “libel terrorism protection act”, aimed at preventing writers resident in the state from having assets seized under libel judgments obtained in England or other nations with fewer free-speech safeguards than the US. Rory Lancman, one of the lawメs sponsors, says England should “really take a look at how its courts are being misused by foreigners, and the impact that’s having on citizens of other countries”.

he criticism stems mainly from a series of English lawsuits targeting Americans investigating alleged terrorist financing. Sweet & Maxwell, the British legal publisher, says the number of English libel cases involving allegations relating to terrorism rose from three in 2005-6 to eight in 2006-7, even though the total number of defamation actions fell from 74 to 64.

In perhaps the most high-profile case of the past few years, the author Rachel Ehrenfeld lost a 2005 action brought by Khalid bin Mahfouz, a Saudi Arabian businessman whose family she accused in a book of sponsoring al-Qaeda and other terrorist groups. The High Court in London found for Mr bin Mahfouz in part because 23 copies of Ms Ehrenfeld’s book had been bought in England and because the first chapter of it was available online.

Critics of the English system say libel tourists exploit rules heavily weighted towards claimants, allowing them to win cases in London they would lose in the US. Unlike in America, the burden in an English libel case is on the defendant to prove their allegations are true. A second criticism is that London courts are too ready to take jurisdiction both over plaintiffs who have few links to England, and over publications that barely register in the country.

In February Iceland’s Kaupthing Bank won an apology and damages from Ekstra Bladet, a Danish newspaper. Kaupthing had argued that a number of the paper’s articles in both Danish and English were downloaded and read in England and Wales. But libel tourism is not merely an English phenomenon. Other jurisdictions are accused of providing even readier forums for roving defamation claimants.

Both Ireland and Northern Ireland have become hotbeds of libel litigation, due in part to the high payouts available Paul Tweed, an Irish libel lawyer who has acted for singers Britney Spears and Jennifer Lopez, says he has US celebrity clients who “just want an apology” they cannot secure at home. This raises the question of whether libel tourism is partly sustained by the US stance of making it almost impossible for public figures to sue successfully – even when they have legitimate grievances.

So, despite the new act in New York, libel judgments in countries with tight rules are likely to continue echoing around the world. They are a chastening reminder to writers that the ease of electronic publication and retailing has made defamation a global business. As Ms Tyler, Mr Akhmetov’s lawyer, puts it: “It’s no longer your news stand that contains the libel. It’s accessible everywhere internationally.”


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