Blogger fails in appeal over libel counterclaim brought by chief executive

Jacqui Thompson had sued Carmarthenshire County Council and its chief executive, Mark James, over comments he made to another blog in 2011.

However, Mr Justice Tugendhat rejected Thompson’s claim in its entirety in March 2013.

The High Court judge also ordered her to pay £25,000 in damages after concluding that James’ counterclaim should succeed. The chief executive claimed the blogger had defamed him by accusing him of corruption, misuse of council funds and lying.

The Court of Appeal refused to give Thompson permission to appeal in her libel claim. However, she did receive permission to appeal part of the counterclaim, namely in relation to the meaning given by Mr Justice Tugendhat to one of her blog posts.

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The post in question said: “I also hear a rumour that Carmarthenshire Council staff are going to be asked to take a 10% pay cut. It wouldn’t surprise me. Isn’t it lucky that Mark James and his cronies had the foresight to finance various deals (this for example), just before all this budget nonsense came along and, of course, the council has to keep its slush fund nicely topped up ...”

Mr Justice Tugendhat held that the posting was fact not comment and held further that the meaning of the posting was that James was unlawfully and corruptly using public money for the benefit of himself and his cronies. It was not suggested that this was a true fact so the counterclaim succeeded.

Before the Court of Appeal, Thompson argued that the meaning accepted by the judge that the posting accused James of unlawfully and corruptly using public money for himself or his cronies was unsustainable or was, at any rate, not the true meaning of the posting in its context (which included a side bar attacking a libel indemnity given by the council to the chief executive).

In Thompson v James [2014] EWCA Civ 600 Lord Justice Longmore, who gave the judgment of the court, rejected the appeal. He said the court would not lightly interfere with a trial judge’s decision on meaning and would not do so unless quite satisfied that he was wrong.

The Court of Appeal judge said: “I am not so satisfied. The natural meaning of ‘slush fund’ is that money is either being used for improper purposes or, at the very least, for purposes which the provider of the funds is not prepared publicly to acknowledge because he fears that legitimate criticism of use of such funds can be made.

“In the context of local authority expenditure, the ordinary reader would regard the use of the term ‘slush fund’ as an imputation that the provider of the funds is acting corruptly. The purpose of using the word ‘slush’ as part of the term ‘slush fund’ is to imply that the money is dirty money.”

The judge said the presence of the side bar made no difference to this conclusion. “It provides a particular context namely the libel costs amendment, but it is still headed ‘Mark James and the Council Slush Fund’. The word ‘corrupt’ does not appear in the side bar but, as I have said, it is already implicit in the word ‘slush’ in the term ‘slush fund’.”

Lord Justice Longmore acknowledged that that no fund existed “in the sense of money deposited in a bank and ring-fenced for the purpose of enabling council members and staff to sue for libel, but (if that is an inaccuracy) it was (as [Mr Justice Tugendhat] said….) an immaterial inaccuracy”.

The gist of the allegation, the judge said, was that funds would be made available for that purpose as and when required and that those funds constituted a slush fund. “It is still dirty money.”

The Court of Appeal meanwhile rejected a submission from Thompson’s counsel that the test set out in the eight principles in the case of Jeynes v News Magazines [2008] EWCA Civ 130 at [14] and [15] needed amplification in cases where local authority officers or servants of central government brought defamation proceedings because of the importance given by Article 10 of the European Convention on Human Rights to the need for healthy debate in a democratic society.

“Article 10 has already been taken into account in the formulation of the principles in Jeynes and need not be taken into account in some separate or different way when government officials are defamed,” Lord Justice Longmore said.

“Of course the court should not be too astute to assume defamation of a government officer when it is the government itself that is being criticised but that is a different matter and for the purposes of this case is dealt with separately [in the judgment],” he added.

In the latter respect, the judge said he could not accept a submission that any defamation by Thompson was defamation of the council and not of James personally.

In relation to the council’s funding of libel proceedings, the Court of Appeal pointed to the Local Authorities (Indemnities for Members and Officers) (Wales) Order 2006 (SI 2006/249) (“the 2006 Order”), which prohibits local councils from funding defamation claims brought by local authority members or officers but permits funding for such members’ or officers’ defences against defamation allegations.

Lord Justice Longmore pointed out that in spite of this provision Carmarthenshire altered its own constitution to allow its Head of Paid Services (namely its chief executive) to authorise the initiation (and funding) of proceedings for defamation by council officers (excluding himself) provided that such initiation was supported by counsel’s advice and similarly to allow the Head of Administration and Law and the Director of Resources to authorise the initiation and funding of proceedings by the Head of Paid Services if supported by counsel’s advice. (The ‘Libel Costs Amendment’).

“The lawfulness of this constitutional amendment was the subject of much consideration by Mrs Thompson in her blogs but the funding of Mr James’s counterclaim was in fact authorised by a committee of elected councillors (rather than the officers named in the Amendment) on the basis, as the court has been informed, that the 2006 Order did not remove a council’s power, to indemnify one of their officers bringing libel proceedings, under s.111 of the Local Government Act 1972,” Lord Justice Longmore said. “I, of course, make no observation on the lawfulness of that proposition.”

Carmarthenshire has been involved in a long-running standoff with the Wales Audit Office over the lawfulness of the indemnity granted to the chief executive to bring a counterclaim.

Responding to the Court of Appeal ruling, Thompson repeated her view that she had been a miscarriage of justice which she could not accept but would “have to live with”.

In a statement issued to the BBC via the council, Mark James said: "I am obviously pleased that Mrs Thompson's appeal was dismissed completely, and that the court agreed with the original judgement and views of the judge. They also awarded her to pay further costs for the appeal.”

He added: "It is time Mrs Thompson finally realised that she has done wrong, has been found by the High Court and Court of Appeal to have done wrong and cease her pointless campaign against the council and its officers."