When does s3(1) of the Defamation Act *not* apply in malicious falesehood cases?

Question

To successfully bring a claim for maliicous falsehood in the UK, one has to show that one has suffered "special damages", which are actual damages suffered as a direct consequence of a malicious, false statement.

However, one does not have to do this if s3(1) of the Defamation Act 1952 applies. This is below:

In an action for slander of title, slander of goods or other malicious falsehood, it shall not be necessary to allege or prove special damage—

(a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form; or

(b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication.

But surely this section of the Act would always apply. The loss suffered as a result of a statement is always going to be economic (e.g., lost investment, sales, etc.) and the statement being malicious means that it was intended to cause damage when it was made.

Thus, whis this section of the Act considered to be an exception to the general rule, when in fact it would seem to apply in all cases?

Answer 1

Pecuniary and special damages are different types of damages

Under UK law, a court can award:

• Special damages: "quantifiable financial losses up to the date of trial". These have to be proved.
• General damages: "This term covers all losses which are not capable of exact quantification, and are further divided into pecuniary and non-pecuniary damages."
  • Pecuniary damages: "The major head of pecuniary damages is future loss of earnings" - this is what s3(1) is primarily aimed at. In personal injury cases, it also covers future care costs - this could be relevant if the defamation caused mental harm.
  • Non-pecuniary losses: Pain and suffering, Loss of amenity, and damages for the injury itself. Unlikely to be relevant in a defamation case.
• Provisional damages: "The general rule is that only one award of damages can be made. If damage turns out to be more serious than was anticipated at the time of the award, there is no further action available to the claimant. This can cause obvious hardship in personal injury cases. Under the terms of the Supreme Court Act 1981 (s.32a) the court has power to make a provisional award that allows the claimant to return to court should further anticipated serious deterioration occur."

Answer 2

The section exempts the plaintiff from having to prove or even plead special damages when they instead plead and prove that the words were intended to cause pecuniary (even if not yet realized) damages

This statutory exception has also been adopted in Canadian jurisdictions and they have turned to U.K. jurisprudence to understand its meaning (Almas et al. v. Spenceley, [1972] 2 O.R. 429 (C.A.)):

The Court was referred to a number of cases under the law as it then stood whereby it was strictly required that special damages be set forth in the pleading and whereby no plea of general damages would be entertained. This was changed in England by the Defamation Act, 1952 (U.K.), c. 66, s. 3 (1), and here by a similar section, s. 19(a) of the Libel and Slander Act, 1958 (Ont.), c. 51 ...

The Ontario Court of Appeal quoted from Clavet v. Tomkies et al., [1963] 3 All E.R. 610 (Lord Denning) (emphasis mine):

All I would say is that, as I read s. 3 of the Defamation Act, 1952, it gives a benefit to a plaintiff in that it is not necessary to plead or prove special damage if the words are calculated to cause pecuniary damage.

This means that special damages (actual and provable pecuniary losses up to the date of trial) need not be proven nor even pleaded if the words are calculated (meaning intended to) cause pecuniary damage (which might have not yet occurred, but might be proven as likely future damages at trial).

Brown on Defamation confirms that generally:

there must be an express allegation that the plaintiff has suffered some particular special damage as a result of the slander, unless there is some special statutory provision foregoing an allegation of special damages where the words are calculated to cause pecuniary damage with respect to an office, profession or trade.

This is not redundant with the maliciousness element

Malice need not be the intent to cause pecuniary loss. Malice can be made out by any improper motive, including spite, or an intention to cause pure reputational harm with no regard for pecuniary damages.

In my view, this section has the greatest effect at the pleading stage. I agree that in many (although not all) malicious falsehood cases, proof of malice will double for proof of an intention to cause pecuniary damages.