REFORM TO DEFAMATION LAWS

Freedom of the media is a core element of Australia’s democratic system which ensures that those in power are held responsible and accountable.  It is a keystone of the rule of law.  Additionally, the rule of law requires people to be treated fairly and justly under the law, to be presumed innocent and to be tried in accordance with the law through an independent and impartial court system.  Consequently, there are a number of limitations or boundaries placed upon free speech. 

Defamation is one of those limits.

Summary of Amendments to Defamation Laws

NSW Attorney-General Mark Speakman said the changes would introduce a new public interest defence based on British law. They would also make changes to the provisions governing the way courts decide how much money they should award to successful plaintiffs and to “bring spiralling defamation payouts under control”.

There has been increasing national debate about the need for Australia wide reforms aimed at protecting free speech and concurrently stemming the tide of increasing damages payouts by putting an effective cap on damages for reputational harm.

“When all is stripped away from a person, what remains is their reputation. That is something worth defending. So too, is the ability of those who hold the powerful to account to do so without the chilling effects of having a defence that never works…”

-Mark Speakman, NSW Attorney General

The recent amendments:

• Introduce a new statutory defence of publication of a matter of public interest.  The defence requires a defendant to prove both that the statement was a matter of public interest and the defendant reasonably believed its publication was in the public interest.
• Clarify the cap on damages for non-economic loss; and
• Limit the period for bringing proceedings for online publications

Mr Speakman believes the new defence will restore “balance to ensure reputations are protected while responsible speech is as free as it needs to be to shine lights into the dark corners of our society.”  

Public Interest Defence

The success of these measures will ultimately depend on the way the changes are applied by judges. The effectiveness of the new public interest defence depends on whether a judge considers it reasonable for a journalist to believe it was in the public interest to publish certain material. That material must also concern an issue that is in the public interest.

So while a journalist might believe it was reasonable to publish the material in question, the defence will fail unless a judge also decides that the journalist’s belief was reasonable.

The history of defamation law provides few grounds for optimism about the application of this defence. Another defence that turns on the question of reasonableness, statutory qualified privilege, has never been used successfully by the media. That failed defence had been intended to protect the publication of material whenever journalists conduct themselves reasonably.

Caps on Payouts

The attempt to bring defamation payouts under control gives rise to different considerations. The new scheme overturns judicial rulings that the cap on payouts for damage to a person’s reputation ceases to apply whenever aggravated damage is present.

But while reputational damage – known as non-economic loss – is now clearly capped, the provisions still make it possible for courts to award damages that exceed the cap. This is due to the fact that the cap applies only to non-economic losses. Aggravated damage has now been placed in a separate category and is therefore not subject to the cap.

The explanatory memorandum that accompanies the changes says the provisions require “awards of aggravated damages to be made separately to awards of damages for non-economic loss”.

When the cap on damages for defamation was introduced in 2005, it came soon after the nation’s governments had introduced caps on damages for personal injuries. The aim was to ensure there was a rational relationship between payouts for harm to a person’s reputation and payouts for physical harm.

When Rebel Wilson won her $600,000 payout for harm to her reputation it was at least $100,000 more than the $400,000 to $500,000 that a Melbourne factory worker could expect for the loss of a leg, according to a 2018 estimate by Slater + Gordon’s Barrie Woollacot that has been cited by The Australian.

The intention of the Attorneys-General who signed off on the latest changes was clear: they wanted to bring spiralling defamation payouts under control. Whether they have succeeded will become apparent once the courts have dealt with several cases under the new provisions. There is a risk that capping one category of damage, while leaving another category uncapped, could result in much the same sort of spiralling payouts that were being made when courts were able to disregard the cap.

Serious Harm Test

From 1 July 2021, the serious harm test (section 10A) applies, which changes the elements of the cause of action.  Specifically:

• by limiting the right to sue for defamation to cases where the publication of defamatory material has ’caused, or is likely to cause, serious harm to the reputation of the person’. (Section 10A(1))
• by providing a corporation that can sue (an excluded corporation) can only do so if the publication of defamatory material ‘has caused, or is likely to cause, the corporation serious financial loss’ (Section 10A(2))

The new ‘serious harm element’ of a cause of action for defamation is to be determined by a judicial officer (Section 10A(3).  Even if neither party consents, judicial officers can by their own motion decide when to determine the question of serious harm.  This includes at any time before a trial commences or during the trial.  (Section 10A(4)).