Why it may matter in future legal claims who a multi-national company puts up as a spokesperson
20 January 2023 | Applicable law: England and Wales | 3 minutes
In good news for global businesses, in July 2023, the Court of Appeal overturned the High Court decision discussed in our article below.
The Court of Appeal held that in cases where the claimant is identified by reference to a company name that refers to more than one company (eg Dyson in this case), the court should consider what the hypothetical viewer of the broadcast would be deemed to know. The hypothetical viewer who is acquainted with the claimant should not be assumed to be omniscient or to know every possible detail about the claimant.
The High Court judge failed to place enough significance on the references to Dyson being an 'iconic British brand'. His analysis was unduly refined, rather than going into the level of detail at which you would expect the ordinary viewer to understand the broadcast. One would not expect the ordinary viewer to consider that the failings described in the broadcast were the responsibility of another Dyson group company other than the 'British brand' repeatedly referred to.
For all brands which have a corporate group structure, this is welcome news on the ability to protect that brand against reputational damage.
The full Court of Appeal judgment can be found here.
This article is relevant for anyone in the public relations industry, particularly those advising businesses on a corporate media response.
A libel claims brought by Sir James Dyson and two of the Dyson companies gives new significance to how a company responds to a 'right of reply' enquiry.
Channel 4 News broadcast a segment on alleged poor treatment of workers at a company in Malaysia that made parts for Dyson products. By the time of broadcast, Dyson had conducted several audits into the claims and ended its relationship with the specific manufacturing company in question. A libel claim was brought over allegations in Channel 4's broadcast; Dyson's position is that Channel 4's broadcast was damaging and untrue.
The claimant parties were Sir James Dyson, Dyson Technologies Limited ('DTL') and Dyson Limited ('DL'). DL is the UK trading company that sells vacuum cleaners and other products to consumers. DTL is the UK company that holds Dyson's intellectual property and brand rights, employs some of the senior executive team and retains its PR advisers.
Some of the matters about the conditions at the supplier company had been responded to on behalf of Dyson by a corporate spokesperson based in Singapore. Dyson's spokesperson featured in an on-screen interview as part of the broadcast.
It is an essential element of a libel claim that the words complained of should be published "of and concerning" the claimant. Whilst it is not necessary for the claimant to be referred to by name, the hypothetical ordinary reasonable reader must have some way of identifying him/her/them.
The Judge acknowledged that, whilst it is theoretically possible that a publication could libel an entire group of companies – giving each of them a cause of action – such cases are likely to be rare. So the court had to decide which Dyson group company Channel 4 viewers would have had in mind when watching the item. The Judge held that the reader would identify two candidates as the targets of the broadcast; (a) the Dyson company responsible for the "PR operation" (as referred to in the broadcast); or (b) the corporate entity that was trading with the supply chain company in South East Asia.
It was held to be of major significance that the response by the Dyson corporate spokesperson was referred to by the broadcast as a response from Dyson's "PR operation". The court examined precisely what the corporate spokesperson said and even what region of the world it was suggested she was located in during the interview (because of a reference to the time zone it was implicit that she was in Asia).
The court also concentrated on the language used by the corporate spokesperson in the interview, including her repeated use of the word "we", which lead the Court to hold that this would indicate to viewers that the spokesperson was speaking on behalf of the Dyson company who had the (now terminated) commercial arrangement with the manufacturing company in South East Asia. This was a "clear pointer" to the viewer that the Dyson company who had the supplier contract was also the only target of the criticism. This was not either DTL or DL, which had brought the claim. The outcome was that the Channel 4 story was not about them, in spite of it being about how 'Dyson' products that are marketed and sold in the UK were made.
The bizarre practical outcome of this judgment is that it becomes very important to consider exactly which company within a group structure a spokesperson is speaking on behalf of.
This assessment can affect the business's legal options post-publication including the ability to bring any libel claim. The Court may look at the identity of the spokesperson and what they said when deciding who a reader or viewer would have thought that the story referred to. There is therefore a potential hazard to be avoided by putting up a spokesperson or drafting a statement that gives the appearance of responding on behalf of a part of the group that is unlikely to sustain damage to reputation. For example, the spokesperson responds on behalf of Company A which is a non-trading off-shore company that heads the group structure, but when the story appears in The Times it causes a downturn in sales by Company B – the main UK sales company.
Care must be taken to bring any libel claim in the name of the company which would be identified by reasonable readers both as (a) the subject of the allegations made/being targeted by the words; and (b) as the entity which suffers damage as a result of the publication. The two will not always naturally align but it is clear that careful consideration of the corporate functions of each entity referred to by the publication should be made at a very early stage. This will require input from communications and legal functions.
At the pre-publication stage, when formulating an on the record corporate media response to a pre-publication enquiry (broadcast media or otherwise), careful analysis should occur on who is the corporate entity and appropriate corporate spokesperson properly able to comment on the subject matter of the publication. This depends on the nature of the allegations being made and who has the requisite knowledge to talk about those issues, but a group business would also benefit from considering what commercial impact the publication of false claims will have and on what part of the business.
This is incredibly tricky and does tend to overlook the commercial reality of modern global companies. In the hundreds of things to consider when advising a business on an important story before it is published, you can now add to that list a careful consideration of exactly who in the group should reply.
The full judgment can be found here.