Curb on defamation mega-payouts to celebrities

Chris Merritt                 24 July 2020

Published in the Australian Newspaper

A new defence for public interest journalism and an effective cap on defamation payouts are key features of a national model law that awaits approval on Monday by state and territory attorneys-­general.

The scheme aims to end massive payouts in which celebrities have won more for harm to their reputations than injured workers could win for the loss of a leg.

The changes in the model bill are the result of the first stage of a national defamation reform project now examining defamation responsibilities and liabilities of internet platforms.

NSW Attorney-General Mark Speakman said the reforms contained in the model bill would help “bring spiralling defamation payouts under control”.

They would also unclog the courts from trivial cases, encourage plaintiffs to resolve issues without resorting to litigation and provide an effective limitation ­period for bringing claims based on the date of first publication rather than the date when mat­erial was last downloaded.

Mr Speakman planned to ask his counterparts at Monday’s meeting to agree to introduce a clear defence for public interest journalism.

“This reform, as well as others that the Council of Attorneys-General will consider, will build a defamation regimen fit for purpose and fit for our times,” he said.

News Corp Australasia executive chairman Michael Miller said Australia’s defamation laws had been “left behind in the digital age … We look forward to the implementation of much-needed changes as soon as possible.”

News Corp Australia is the publisher of The Australian.

The model law’s restored cap on damages is aimed at reinforcing the original goal of ensuring defamation awards for harm to a person’s reputation — known as non-economic losses — have a rat­ional relationship to the size of payouts for physical injuries. When the cap was introduced in 2005, it was indexed and now stands at about $400,000.

However, judges have applied it in a way that has allowed them to exceed the cap — in some cases by 100 per cent — which has broken the relationship with compensation for physical injuries.

Actor Geoffrey Rush won $850,000 for harm to his reputation when the cap was just under $400,000; the four Wagner brothers each won $750,0000 from Macquarie Radio when the cap was $398,500; and actress Rebel Wilson and barrister Lloyd Rayner each won $600,000 when the cap was $389,500.

Wilson’s $600,000 payout was at least $100,000 more than the $400,000 to $500,000 a Melbourne factory worker could expect for the loss of a leg, according to a 2018 estimate by Slater + Gordon’s Barrie Woollacot.

The public interest defence, modelled on a British scheme, is a response to the failure of the Australian defence known as statutory qualified privilege, which has never been used successfully by any media organisation.

Mr Speakman said the absence of a successful news media defence using statutory qualified privilege “is a clear sign defamation law is inhibiting publication and discussion of matters of public interest, contrary to the objects of the Defamation Act”.

In Britain, the media can successfully defend defamation claims by showing the material in question concerned a matter of public interest and the publisher reasonably believed publishing it was in the public interest.

Sydney University legal academic David Rolph has pointed out that the effectiveness of this defence depended on the way it was applied by judges.