Tesco Stores Ltd v Guardian News & Media Ltd and Rusbridger

Tesco (T) brought claims in libel and malicious falsehood against the publisher of the Guardian (G) and its editor (R) in respect of articles which alleged T had set up a £1bn off-shore corporation tax avoidance scheme. G & R admitted that the story was false and made an offer of amends which at the date of the hearing T had neither accepted nor rejected. G & R applied for an order compelling T to either accept or reject the offer within 8 days of the hearing (ie before service of the Reply or disclosure) and that the malicious falsehood claim be stayed. T argued as a matter of statutory construction that it was entitled to keep the offer open as long as it wished. G & R also applied to amend their defence to include allegations of corporation tax avoidance, albeit in a lower sum and of a different kind.

(1) Should T be compelled to elect to either accept or reject the offer of amends?
(2) Should the malicious falsehood claim be stayed as serving no useful purpose?
(3) Should T & R be permitted to amend their defence?

(1) T must elect whether to accept or reject the offer. It was inconsistent to keep open the option of accepting the offer while going ahead with alleging malice. The decision to accept or reject must be taken within “a reasonable period” depending on the particular circumstances of the case. It would not be reasonable to delay for the purposes of obtaining disclosure on matters relevant to the issue of malice.

(2) The malicious falsehood claim should be stayed: it could not afford any substantive remedy in respect of reputation – any damages could be recovered in the defamation action. T’s dual claim appeared to be tactical. The circumstances in which a claimant could succeed on malice in malicious falsehood but fail under the OOA procedure were remote.

(3) The correct approach to the proposed amendment at this stage was to err on the side of generosity and to allow the amendment, subject to the trial judge.

On the construction of the offer of amends provisions, the decision contradicts that of Lady Paton in Moore v Scottish Daily Record & Sunday Mail Ltd [2007] CSOH 24. Plainly they cannot both be right. The logical implication of the decision would appear to be that an offer of amends, if not accepted, will generally be deemed to have been ‘rejected’ within a matter of weeks of being made, even where a Reply has not yet been served. As to the stay of the malicious falsehood claim, if a claimant with a viable cause of action in malicious falsehood also sues in libel, and if the defendant then makes an offer of amends, he is now liable to have his malicious falsehood claim stayed even before he has made his election.

Harry Counsell - Transcribers of the judgment