#5008 - Berezovsky V. Michael - Conflict of Laws BCL

Berezovsky v. Michael

Facts

An American business magazine published an article accusing the plaintiffs, two prominent Russian citizens, of being involved in organised crime in Russia. The article was published in North America, where the magazine had a circulation of over 785,000, Russia, where only 13 copies were distributed, and England, where the magazine had a circulation of just under 2,000 and a total readership of about 6,000. The plaintiffs, who both claimed to have significant connections with England, chose to bring libel actions against the publisher and editor of the magazine in England, rather than in the United States or Russia. In those proceedings, they confined their claims for damages to the publication of the article within the jurisdiction, and sought leave to serve the writs on the defendants out of the jurisdiction. The defendants applied to have the writs set aside and the actions dismissed or stayed, contending that England was not the most appropriate jurisdiction for the trial of the claims. The judge held that Russia was the more appropriate forum and accordingly granted the stay. His decision was reversed by the Court of Appeal, which concluded that both plaintiffs had a substantial complaint about English torts.

Holding

The application to serve outside jurisdiction was based on RSC Ord 11, r 1(1)(f) – the relevant part of the order makes it permissible to serve a writ out of the jurisdiction where “the claim is founded on a tort and the damage was sustained, or resulted from an act committed, within the jurisdiction.”

Global Cause of action argument – rejected

Forbes submitted that the correct approach is to treat multi-jurisdiction cases like the present as giving rise to a single cause of action, and then to ascertain where the global cause of action arose.

There is no support for this argument in English law. It is contrary to the long-established principle of English libel law that each publication is a separate tort. Moreover, it is inconsistent with the policy underlying the acceptance by the Court of Justice of the European Communities inShevill v Presse Alliance SACaseC-68/93[1995] All ER (EC) 289, [1995] ECR I-415, admittedly a convention case, that separate actions in each relevant jurisdiction are in principle permissible.

And, as Hirst LJ observed, the single cause of action theory, if adopted by judicial decision in England, would disable a plaintiff from seeking an injunction in more than one jurisdiction. In the context of the multiplicity of state jurisdictions in the United States there is no doubt much good sense in the Uniform Single Publication Act. But the theory underpinning it cannot readily be transplanted to the consideration by English courts of transnational publications. Rightly, the Court of Appeal rejected this submission.

The English law of libel has three distinctive features, viz (1) that each communication is a separate libel(Duke of Brunswick and Luneberg v Harmer(1849) 14 QB 185, 117 ER 75,McLean v David Syme & Co Ltd(1970) 92 WN (NSW) 611), (2) that publication takes place where the words are heard or read(Bata v Bata[1948] WN 366,Lee v Wilson & Mackinnon(1934) 51 CLR 276), and (3) that it is not necessary for the plaintiff to prove that publication of defamatory words caused him damage because damage is presumed(Ratcliffe v Evans[1892] 2 QB 524 at 529, [1891–4] All ER Rep 699 at 702–703, per Bowen LJ). The rigour of the application of these rules is mitigated by the requirement that in order to establish jurisdiction a tort committed in the jurisdiction must be a real and substantial one(Kroch v Rossell & Cie SPRL[1937] 1 All ER 725).

Reformulated global cause of action theory: “… the correct approach is to treat the entire publication—whether by international newspaper circulation, transborder or satellite broadcast or Internet posting—as if it gives rise to one cause of action and to ask whether it has been clearly proved thatthis actionis best tried in England.

Rejected: If counsel was simply submitting that in respect of transnational libels the court exercising its discretion must consider the global picture, his proposition would be uncontroversial. Counsel was, however, advancing a more ambitious pro-position. He submitted that in respect of transnational libels the principles enunciated by the House inThe Spiliadashould be recast to proceed on assumption that there is in truth one cause of action. The result of such a principle, if adopted, will usually be to favour a trial in the home courts of the foreign publisher because the bulk of the publication will have taken place there.

In any event, the new variant of the global theory runs counter to well-established principles of libel law. It does not fit into the principles so carefully enunciated inThe Spiliada.The invocation of the global theory in the present case is also not underpinned by considerations of justice. The present case is a relatively simple one. It is not a multi-party case: it is, however, a multi-jurisdictional case. It is also a case in which all the constituent elements of the torts occurred in England. The distribution in England of the defamatory material was significant. And the plaintiffs have reputations in England to protect. In such cases it is not unfair that the foreign publisher should be sued here. Pragmatically, I can also conceive of no advantage in requiring judges to embark on the complicated hypothetical enquiry suggested by counsel. I would reject this argument.

Albaforth Presumption – Place where the tort was committed – Contrary to Spiliada?

Counsel for Forbes argued that a prima facie rule that the appropriate jurisdiction is where the tort was committed is inconsistent withThe Spiliada.He said thatThe Spiliadaadmits of no presumptions. The context of the two lines of authority must be borne in mind. InThe Spiliadathe House examined the relevant questions at a high legal of generality. The leading judgment of Lord Goff is an essay in synthesis: he explored and explained the coherence of legal principles and provided guidance. Lord Goff did not attempt to examine exhaustively the classes of cases which may arise in practice, notably he did not consider the practical problems associated with libels which cross national borders. On the other hand, the line of authority of whichThe Albaforthis an example was concerned with practical problems at a much lower level of generality. Those decisions were concerned with the bread and butter issue of the weight of evidence. There is therefore no conflict.

Is there a more appropriate alternate forum?

It was argued that Russia, or in the alternative, USA are more appropriate alternate fora.

Moreover, there are two substantial indications pointing to Russia not being the appropriate jurisdiction to try the action. The first is that only 13 copies were distributed in Russia. Secondly, and most importantly, on the evidence adduced by Forbes about the judicial system in Russia, it is clear that a judgment in favour of the plaintiffs in Russia will not be seen to redress the damage to the reputations of the plaintiffs in England. Russia cannot therefore realistically be treated as an appropriate forum where the ends of justice can be achieved. In the alternative counsel for Forbes argued that the United States is a more appropriate jurisdiction for the trial of the action. There was a large distribution of the magazine in the United States. It is a jurisdiction where libel actions can be effectively and justly tried. On the other hand, the connections of both plaintiffs with the United States are minimal. They cannot realistically claim to have reputations which need protection in the United States. It is therefore not an appropriate forum.

In agreement with Hirst LJ I am satisfied that England is the most appropriate jurisdiction for the trial of the actions.

Lord Hoffmann (Minority)

But without an absolute rule, as inShevill's case, that the courts of this country are obliged to take jurisdiction in every case in which there is publication here of a libel on a plaintiff who is known in this country, I do not see why the judge was not entitled to decide that England was not clearly the most appropriate forum for this action between Russian plaintiffs and an American defendant about activities in Russia.

The respondents say that what makes England the most appropriate forum is that the plaintiffs are claiming damages only for the injury to their English reputations. What better tribunal could there be than an English judge or jury to assess the proper compensation?

But the notion that Mr Berezovsky, a man of enormous wealth, wants to sue in England in order to secure the most precise determination of the damages appropriate to compensate him for being lowered in the esteem of persons in this country who have heard of him is something which would be taken seriously only by a lawyer…. The common sense of the matter is that he wants the verdict of an English court that he has been acquitted of the allegations in the article, for use wherever in the world his business may take him… He does not want to sue in Russia for the unusual reason that other people might think it was too likely that he would win. He says that success in the Russian courts would not be adequate to vindicate his reputation because it might be attributed to his corrupt influence over the Russian judiciary….

The real issue in this case is not about the plaintiffs' reputation in one country rather than another but the general question of...