By Patrick George -
Snapshot
- The Hockey case provides a wider lesson for those contemplating bringing proceedings for defamation or defending them. It demonstrates the risk of investing substantial amounts of money in an outcome as to the meaning of words, which can be unpredictable.
- One of the more surprising features for media publishers, and more broadly for ordinary people, is the size of the damages award for the two tweets of $80,000.
- Although there were some aspects on which each side won or lost, neither side came out of this a winner.
The Federal Treasurer, The Honourable Joseph Benedict Hockey, was awarded the total sum of $200,000 damages for defamation in a judgment in the Federal Court: Hockey v Fairfax Media Publications Pty Ltd (No 1) [2015] FCA 652. He was also awarded 15 per cent of his costs: Hockey v Fairfax Media Publications Pty Ltd (No 2) [2015] FCA 750.
Financial aspects
The initial media reaction to the award of damages was that Mr Hockey had had a significant victory against Fairfax. It is, in relative terms, a substantial award. Further to that, some sections of the media highlighted that there was a finding of malice against the Editor-in-Chief of the Sydney Morning Herald (SMH), Darren Goodsir, which suggested it had been unwise for Fairfax to defend the proceedings in all the circumstances.
However, on the argument for costs, counsel for Fairfax argued that the case had been a disaster for the Treasurer and that, in the final result, he should pay a substantial proportion of Fairfax’s costs given the ambit of the proceedings.
Following the judgment on costs, in which Mr Hockey was awarded only 15 per cent of his costs, commentators expressed the view that Mr Hockey would be seriously out of pocket from having brought the proceedings. If, for example, his actual costs amounted to $500,000, and if costs had followed the event on a party/party basis, he would be entitled to, say, 60 per cent of his actual costs, ie. a recovery of $300,000. Together with his award of $200,000, that would have left him financially square at the end of the day. However, with a recovery of only 15 per cent of the party/party costs, he would only have recovered $45,000, leaving him out of pocket $255,000 overall. The flip side of the coin, however, is that Fairfax – having also spent, say, $500,000 in defence costs – would be obliged to pay Mr Hockey $45,000 for his costs and $200,000 for the damages award, therefore leaving Fairfax out of pocket $745,000 at the end of the day.
If the sole criteria for winning was financial, then it has to be said that neither party won.
This is an indictment on the process. The cost of defamation proceedings and the financial risk is too great for many people whose reputations are ruined by defamatory publications. It is likewise a great risk for media defendants in defending claims if they believe they are unmeritorious. The prospects of settlement before trial often diminish because media defendants are faced with a plaintiff at the time of mediation who already has incurred substantial costs that need to be paid in order to reach a settlement.
As a result, media defendants can be asked to pay a six-figure sum at mediation to satisfy the plaintiff’s costs alone. This process is in much need of reform.
