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David MarchantEditor at OffshoreAlert
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Fraudster Tim Schools turns to a reprobate's best friend - British libel law

November 22, 2012 by David Marchant 1 Comment

Today's libel complaint by Axiom Legal Financing Fund fraudster Timothy Schools against me and OffshoreAlert at the U.K. High Court is as predictable as it is ineffective.

In 2010, U. S. President Barack Obama signed into law The SPEECH Act, which renders British libel judgments unenforceable in the United States on the grounds that British libel law is "repugnant", which is a view shared by many people around the world, particularly journalists.

The libel law that the United Kingdom has vomited on its current and former colonies is one of the most repulsive pieces of legislation that exists in the civilized world. I cannot think of a law that is more harmful to society and so consistently produces instances of injustice. It chills free speech, protects the reputations of reprobates, and allows questionable ventures to continue far longer than they should because the media is too intimidated to even write about them let alone expose them, due to the high likelihood of being successfully sued and bankrupted.

I am telling this sorry tale from bitter experience. Since the first libel complaint was brought in 1998, OffshoreAlert has spent more than half a million dollars on its own legal fees defending seven such actions in the United States, Canada and the Cayman Islands. Two-thirds of that total amount went on defending a single action in the Cayman Islands, despite the fact that it is just one of seven cases.

Even though the Cayman action did not go to trial and had but one or two court hearings on trifling preliminary matters, it still cost me more than twice that of a separate case at federal court in Miami that not only went to trial but also to an appeal (which we prevailed in, lest anyone should have any doubts).

The huge price difference can be attributed to two principal factors: The absurdity of the law itself and the equally ridiculous procedural nature of the British legal system.

My criticism of procedure refers to the practice of having solicitors and barristers, which essentially quadruples fees to their poor (literally) clients. When defending libel actions in the US, I speak directly with an attorney and he/she takes the case to trial. Under the British system, I communicate with a solicitor (single-billing), the solicitor then communicates with a barrister (double-billing) and the solicitor reports back to me (single-billing). Hence, a conversation or correspondence that would cost me a few hundred dollars per hour in the US costs me four times as much under the British system.

Factor in that important information is inevitably lost in translation in this game of Chinese whispers because the client (i.e. the pleb) cannot liaise directly with the barrister (i.e. the master) and I was left with a feeling that I was paying way over the odds for a system that harmed my chances of winning. What a racket!

Now on to the actual law. Unlike in the US, where the plaintiff must prove that each disparaging statement is false, the burden in British libel law is on the defendant to prove that each disparaging statement is true.

This arduous task is hindered by interpretations on words, phrases and their meanings by judges that, to me and many others, often seem out of touch with reality and common sense. For example, in 2009, Britain's then-leading libel judge ruled that an accomplished science author who wrote that the British Chiropractic Association "happily promotes bogus treatments" had to prove not only that the treatments were bogus but that the BCA knew them to be bogus and, therefore, was being deliberately dishonest, something that is virtually impossible to prove.

Fortunately, this absurd ruling was overturned on appeal – but at great cost and anguish to the defendant.

The law is so heavily weighted in favour of plaintiffs and judges/juries so poor in their decision-making that plaintiffs routinely prevail, even those who could reasonably be described as dubious.

Victors in two of the most notorious libel cases in British legal history were author and former politician Jeffrey Archer and US-based fast food giant McDonald's. In 1987, Archer won £500,000 in damages against The Daily Star newspaper, despite both parties agreeing that Archer had paid a prostitute, with the court ridiculously accepting Archer's claim that the payment he made was not for sex but out of benevolence. Justice eventually prevailed when, 12 years later, another newspaper exposed that Archer had lied during the libel trial and, in 2001, he was sentenced to four years in prison for perjury and perverting the course of justice.

In the McDonald's case, the action became so infamous that it was given its own name by the media – "McLibel" – and a movie was made about it. In a nutshell, McDonald's sued two penniless environmental activists who were handing out leaflets criticising the company for a number of alleged acts.

The actual trial, not the proceedings but the trial itself, lasted two-and-a-half years, which is ridiculous in itself, and, at the end of it, one of the conclusions of the judge was that "McDonald's food is not very unhealthy as stated in the leaflet", something that, I'm sure, most people would accept as silly, particularly bearing in mind the chronic levels of obesity in the US.

British libel law is so draconian that a newspaper in Bermuda was advised by its attorney not to follow up an OffshoreAlert article about a request for judicial assistance filed at federal court in the US regarding a Bermuda-based businessman who was being investigated in the Netherlands for suspected involvement in criminal activity. Although the document could be downloaded by any member of the public from the US court's website, the Bermuda newspaper was advised that, because the content of the document had not been read out in court, it was too dangerous to publish. The attorney even advised the Bermudian newspaper against providing a link to the OffshoreAlert article for fear of breaching the local libel law.

British libel law and the way it is enforced has led to plaintiffs all over the world choosing the country as a venue to bring libel actions even when neither the plaintiff nor defendant lives there or has any meaningful connection to the jurisdiction. This practice is known as 'libel tourism' and directly led to The SPEECH Act being passed unanimously by both the Senate and the House of Representatives in the US, which is a rare feat.

British libel law is merely an extension of that country's unhealthy obsession with secrecy. The culture is to sweep everything under the carpet and pretend it doesn't exist, a collective denial of reality, if you will. If Britain was a person, it would long ago have been diagnosed as mentally ill. The less the public knows, the better. That's the mantra.

I was born and raised in Britain, leaving at the age of 24 for Bermuda and then the US. Like every Brit, I was brainwashed into believing that the British legal system was the best in the world. It took me many years of living overseas and encountering one nonsensical ruling after another in both civil and criminal cases in the UK and its overseas territories before I realised that it does not hold a candle to the US legal system in terms of actually dispensing justice.

There is an upside, however. The fear that British libel law generates among journalists in the UK and its overseas territories is good for OffshoreAlert because it allows us to report information that local journalists are too afraid to cover, thereby giving us a competitive edge.

Finally, the passage of The SPEECH Act is just another reason for me to be thankful to the United States. What a truly great country this is. I could not do my job anywhere else and, for that, I gladly pay all of my taxes.

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  • TowerHill
    By TowerHillon Wednesday, December 11, 2013 11:00:21 AM

    Brilliant !