Karpov v Browder

The background to the claim was the death in 2009 of Sergei Magnitsky in a Russian prison. He was an auditor employed by law firm Firestone Duncan in Moscow who, shortly before his death, had been investigating a tax fraud involving the Hermitage Fund, committed against the Russian federation by a criminal gang.

C was a Russian policeman. D1 was the co-founder and chief executive of D2, the manager of the Hermitage fund. D3 was a company providing investment research to the Hermitage fund, and D4 was a US attorney who managed Firestone Duncan.

The Ds had conducted a campaign contending that a criminal organisation had conspired to take control of the Hermitage Fund, and had succeeded in procuring a large and unlawful tax refund as a result. As part of the campaign, four videos were published on a website, containing material which C said was defamatory of him. C also complained about an interview given by D1 to the BBC, and of an article in foreign policy magazine.

C’s name was included on a list, published under a provision of the US Sergei Magnitsky Rule of Law and Accountability Act of 2012, of those thought to be responsible for Magnitsky’s death (“the Magnitsky List”).

C pleaded that the words and images complained of meant that he was guilty of the torture and murder of Sergei Magnitsky, and had done so to prevent exposure of the fraud involving the Hermitage Fund. C also pleaded that it was alleged that he had been party to a previous case of kidnap and extortion, and that he would continue to commit murder to cover up his crimes.

C had tried and failed to pursue criminal and civil proceedings arising from the Ds’ allegations in Russia in 2010 and 2011. In 2012 he issued proceedings in London. The Ds served a defence pleading defamatory meanings which they sought to justify, as well as that the words or images were substantially true in the meanings pleaded by C. The Ds also relied on a Reynolds defence, a qualified privilege defence, and pleaded that the claim was an abuse.

The Ds applied to strike out or stay the claim as an abuse of process under CPR 3.4(2)(b) and/or under the inherent jurisdiction. C issued his own application to strike out certain parts of the defence.

On the cross applications:

1) Could C show a significant connection with England or a reputation to protect here, and therefore establish ‘a real and substantial tort’ within this jurisdiction?

2) Could C achieve worthwhile vindication in the proceedings given the torrent of international condemnation of Russian officials involved in events leading to C’s death, and his inclusion on the Magnitsky List? Was it an abuse of process to bring such a claim in England and Wales when its admitted purpose was attacking the Magnitsky List?

3) Should certain parts of the defence be struck out?

4) Should C be allowed to bring his claim here when the natural forum had rejected them?

5) Did C have a real prospect of proving loss in relation  to actionable publications?

6) How did the potential costs of a trial affect the claim?

Striking out the claim as an abuse of process and/ or under the inherent jurisdiction:

1) A C’s ability to show a reputation sufficient to demonstrate a real and substantial tort within the jurisdiction in cases where, although he had no reputation at the time, such reputation was created and destroyed by the publication, may arise where he has some prior or imminent connection with the jurisdiction. C’s visits to England in the past and the media interest in his position did not meet this test. His lack of reputation to protect in or connection with the jurisdiction was highly material to whether the claim should be struck out.

2) It may have been relevant to the application to consider the nature of C’s reputation in the light of matters of which no complaint could have been made because they occurred outside the jurisdiction or before the period of the claim. The inclusion of C’s name on the Magnitsky List would not be affected by any finding of an English court. Other damaging allegations made against C other than those of the Ds would not have been affected.

3) C achieved a measure of vindication as a result of the views the J expressed on his application. The Ds’ plea of justification in relation to the allegation that C, himself or through others, caused, and was guilty of, the torture and murder of Sergei Magnitsky, and would continue to commit or cause murder to cover up his crimes,  was unsatisfactory. It focused on motive alone, and did not provide sufficient causal link between C’s involvement in Magnitsky’s arrest, and his subsequent death.

4) Russia was the natural forum for a claim to vindicate C’s reputation, and this was relevant to 1).

5) The court would have been faced with a difficult causation issue arising from the delay in bringing proceedings, and the fact that much of C’s loss arose from publications which were not actionable because of limitation or jurisdiction.

6) The fourteen bundles of documents used on the application indicated the extent of time and costs that would be expended at trial.

Although the claim was struck out, this victory for the Ds was qualified by the fact that their plea of justification in relation to the most serious of the allegations was not allowed to stand. This allowed the C what the judge called a measure of vindication, setting the record straight in relation to the pleadings in the claim, albeit that the door was left open for amended particulars of justification.

The point of most interest in the judgment relates to the ability of foreign claimants to bring proceedings in this jurisdiction. The J accepted that in principle an individual’s reputation within the jurisdiction can be both created and destroyed by the same publication, but held that the test in that situation is whether such an individual can go on to show a prior or imminent connection with the jurisdiction.

This does not close the door to foreign claimants, and the judge made clear that even in the absence of a real and substantial tort, the court may still have regard to proportionality. But where there is a degree of artificiality in seeking to protect a reputation in the jurisdiction, that is likely to be material to an application to strike out.