Why a multimillion-dollar legal boom is running out of steam

The number of defamation cases filed in Australia has declined sharply since a boom five years ago, in a sign that costly court losses and recent law reforms may be deterring prospective plaintiffs.

The Federal Court, which historically heard almost no defamation cases, emerged in the past decade as the forum of choice for a string of famous litigants, including Oscar winner Geoffrey Rush.

Statistics show a sharp decline in new defamation filings across Australia.Credit: Nathan Perri

In 2020, at the peak of the Federal Court’s defamation bonanza, 67 defamation cases were filed in its registries nationally. Last year, that figure dropped by more than half to 30.

A decline in new defamation filings is also apparent in state courts over the past decade.

In 2014, 58 defamation cases were filed in the NSW Supreme Court, a tally that fell to 14 in 2020 and just six last year. This reflects the shift in cases to the Federal Court.

But defamation filings also declined in the NSW District Court: 58 new cases were filed in 2020, compared with just 15 last year.

The District Court “is the venue of choice for claims of a more modest nature”, Judge Judith Gibson, one of Australia’s top defamation jurists, said in a recent decision.

The Victorian County Court recorded 46 new defamation cases in 2020 and 51 the following year. Last year, 26 defamation matters were filed, returning roughly to the level of a decade ago.

In the Victorian Supreme Court, 16 cases were filed last year, compared with 21 cases in 2020 and 25 in 2014.

Defamation reforms

Defamation laws changed in most states and territories in July 2021, and again in July last year.

Some reforms made it harder for plaintiffs to bring, and win, a lawsuit. This may have reduced the number of cases filed in those jurisdictions, but other factors including the high cost of litigation are also likely to be relevant.

Western Australia, a hold-out, has not passed any of the changes to defamation law that might have contributed to falling case numbers elsewhere.

It has also seen a downturn in cases: 15 cases were filed in the WA Supreme Court last year compared with 28 to 30 in the preceding three years. However, new filings were relatively stable between 2016 and 2019, averaging 16 cases per year.

Costly losses

Among other factors that may discourage would-be plaintiffs are the astronomical cost of litigation and high-profile court losses.

Two of the largest defamation cases in recent years, brought by former Special Air Service soldier Ben Roberts-Smith against The Age and The Sydney Morning Herald, and former federal Liberal staffer Bruce Lehrmann against Network Ten, were dismissed by the Federal Court.

Both resulted in costs orders in the millions.

Appeals have begun in both cases, and Roberts-Smith has sought to expand his appeal to introduce evidence of a “secret recording” involving Age and Herald investigative journalist Nick McKenzie.

Australia mirrors UK

Professor David Rolph, a University of Sydney defamation law expert, said it was “not surprising that from time to time there might be a downturn in defamation filings”.

Defamation has been consistently popular in Australia over the long term, but “there are periods where it is more intensely litigated than others”, he said.

“One observation that might be made, though, is from around 2020-21 in jurisdictions that introduced stage one of the reforms … there has been a decided decline.”

This mirrored the decline in new claims in the UK after the introduction of the 2013 Defamation Act.

“Many of the reforms in [the UK law] were introduced in Australia, such as serious harm and the public interest defence,” Rolph said.

“After reforms are introduced, it is to be expected that there will be a downturn in new filings.

“One way to illustrate this is that filings in Western Australia, which to date has introduced none of the reforms, have remained consistently high, albeit with a significant drop-off in the last year.”

As to the potential impact of recent court losses, Rolph said that “when prominent plaintiffs fail, that itself can have a chilling effect on other prominent plaintiffs suing for defamation”.

Serious harm

Under the serious harm requirement, a plaintiff must show an allegedly defamatory publication “has caused, or is likely to cause, serious harm” to their reputation.

This was designed to discourage lower-level lawsuits, sometimes referred to as “backyard” claims.

“Harm to reputation was previously presumed, which made it very easy for virtually anyone to sue for defamation,” Rolph said. Adding this new obstacle “may deter some claimants”.

A new procedural hurdle

Rolph said a new requirement that a person suing for defamation issue a concerns notice before filing proceedings may also “act as a barrier”.

A concerns notice sets out the allegedly defamatory statements at the heart of the claim. In a trial, a plaintiff “can’t rely on a statement they haven’t put in their concerns notice”.

“The effect of this is to increase the costs of pre-trial steps because specialist practitioners would need to be engaged to draft concerns notices.”

Western Australia

Perth barrister Dr Michael Douglas, a former academic, said it was unsurprising defamation filings in Western Australia had been “pretty consistent” because “the law has stayed the same over here”.

But he said many of the filed cases in Western Australia would not proceed to a trial. Parties to defamation disputes in the Supreme and District Courts were “sent straight to mediation”, even when they are “in intractable positions”, he said.

Douglas said the serious harm threshold effectively “took away the rights of the ‘non-rich’” because it was designed to discourage lower-level cases.

The “missing piece in the law reform conversation”, he said, was a “lower cost” option similar to tribunals, to help ordinary people obtain quicker, more cost-effective remedies when their reputations were damaged.

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