Reach plc, the publisher of various national and regional newspapers titles, has settled a libel claim brought by the sports nutrition brand Myprotein over an April 2017 article published in The Manchester Evening News (MEN). The company sought damages of in excess of £1 million.
The article concerned a Myprotein customer who had complained to the company after he found a dead mouse in a packet of Myprotein Impact Diet Whey protein powder. Following laboratory tests on the dead mouse, the customer subsequently accepted that it must have entered the product after he bought it and apologised to the manufacturer for suggesting otherwise. The MEN quickly took down its article and published an apology of its own.
Myprotein issued libel proceedings in April 2018 and the publisher agreed to pay compensation. The manufacturer served a lengthy expert’s report in support of its claim that it suffered lost profits of over £1 million in the weeks following publication of the story, which was also published in various national newspapers. Myprotein claimed the articles were responsible for this financial loss and sought to recover it all from the MEN’s publisher.
Damages claims by corporate claimants in libel proceedings are notoriously difficult to prove, particularly where, as here, the company is a multinational brand with lots of product lines in multiple jurisdictions. The claimant must persuade the court at a compensation hearing that any financial loss it can point to following publication was caused by the article and not any other potential competing factor e.g. internal operational issues, activities by competitors, currency fluctuations, rising costs in raw materials etc.
This essentially requires the claimant to consider every other factor which might affect its bottom line and to persuade the court that they can be disregarded. In practice, this is an incredibly challenging exercise for a large brand. By way of example, in the 2017 case of Optical Express Ltd & Ors v Associated Newspapers Ltd, the corporate claimants advanced a libel damages claim of over £21m supported by forensic accountancy evidence, but ended up settling for only £125,000.
While the agreed compensation sum in these proceedings is confidential, the settlement is further proof of the difficulties corporate claimants face in proving financial loss in libel proceedings.
“Unlike general damages – which are intended to compensate a claimant for damage to their reputation – special damage, representing financial loss, will not be presumed and so must be proved,” explains SMB’s Gordon Clough. “It is not enough for a company to point to a purported fall in sales following an alleged libel. It must prove that any financial loss was caused by the publication and not any other factor. This is no easy task. Companies will often be better served engaging in swift PR and marketing to mitigate the adverse effect of a negative story, rather than bringing complex and expensive libel proceedings.”
Reach plc was represented throughout by SMB Senior Associate solicitor Gordon Clough, Managing Partner Razi Mireskandari, and William McCormick QC of counsel.
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