Individuals outside of the sphere of dispute resolution law are often shocked at the aggressive and adversarial tone adopted by most litigators. A question came before the Court in the case of Coghlan and another v Lexlaw Ltd [2023] as to whether a letter written by a law firm to an opposing law firm could be defamatory.
Coghlan & Anor v Lexlaw Ltd [2023] EWHC 1453 (KB)
Case background
The Claimants had instructed Lexlaw to represent them in respect of a professional negligence claim against a number of Defendants. The underlying facts of that case are not important for the purposes of this blog.
What is important is that the Claimants dis-instructed Lexlaw before trial. Lexlaw had been acting for the Claimants on a no-win no no-fee agreement. Upon termination of their retainer, Lexlaw wrote to the opposing law firm in the dispute and:
- Confirmed the existence of the no-win no no-fee agreement;
- Set out the basis that Lexlaw expected to benefit from the fruits of the litigation;
- That the Defendant therefore had an equitable lien over the costs of the proceedings; and
- Confirmed that, if the opposition in the professional negligence claim paid over money directly to the Claimants without first discharging the sums due to Lexlaw, Lexlaw would be entitled to pursue the opposition for those sums.
The Claimants issued proceedings against Lexlaw alleging that the letter sent by Lexlaw to the opposition, the content of which is summarised above, was defamatory of the Claimants, as the Claimants’ case was that it implied and therefore would be understood by the reasonable reader that the Claimants had not paid sums due to Lexlaw and that they were most likely not going to. The Claimants’ claim was set out on the basis of defamation, misuse of private information, breach of data protection, and breach of fiduciary duty. The Court conducted a preliminary issue trial, conducted on paper without the parties being required to attend, to determine the natural and ordinary meaning of the words written and whether those words could be defamatory.
On the natural and ordinary meaning, the Claimants set out that they believed that a reasonable reader would understand that the Claimants had failed to pay sums that were due and that there was a significant probability that they would not do so. The Claimants said that this is a classic example of a “Chase level 2 meaning”, namely that there are reasonable grounds to suspect that the Claimants are guilty of the act identified.
In dismissing the defamation part of the claim, HHJ Lewis confirmed as follows:
“24. I am satisfied that the natural and ordinary meaning of the Letter is that: The claimants had entered into a conditional fee agreement with the defendant. As a result of this agreement, the defendant has an equitable lien in the “fruits of the litigation” between the claimants and BLM Law’s clients. BLM Law were therefore required to discharge the defendant’s fees – at that time £93,259.62 plus interest at 8% per annum over base – from any settlement sums before paying these to the claimants. If BLM Law did not do so, the defendant would seek to enforce its lien against the claimants.
- The Letter contained statements of fact.
- The Letter was not defamatory of the claimants at common law. It said nothing about the claimants’ character and would not have lowered or tended to lower the claimants in the estimation of right-thinking people generally.”
The case proceeds on the other arguments levelled. The judgment contains in the schedule a full draft of the letter. Having read it, the writer of this blog could not understand how the Claimants believed that it was defamatory of them. It was plainly on its face a letter by a lawyer to another lawyer with a view to protecting Lexlaw’s position in respect of costs. There is nothing unusual about that in the circumstances of that case. The outcome of the case is therefore not surprising. That is not to say that a letter from a solicitor’s practice to another firm could not be defamatory. In the right circumstances, it clearly could be. That was just not the case here.
It does however highlight that the Court will not shoehorn in a meaning that is not there and accordingly early expert advice is advisable so as to avoid significant wasted costs pursuing a claim with limited prospects.
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Kevin Modiri is a Partner in our expert Dispute Resolution team, specialising in commercial disputes, insolvency, inheritance disputes, data breach claims and defamation claims.
If you have any questions concerning the subjects discussed in this article, please do not hesitate to contact Kevin or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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