England is Libel Capital of the World

Berezovsky v Forbes Inc and another, Glouchkov v Same (H of L TLR 16 May; NLJ 19 May p741)

By a majority of one the House of Lords has confirmed England as the defamation capital of the world. First, the facts. Forbes magazine in 1996 was sold abroad in small numbers, mainly to expatriate American businessmen. Compared with the 785,000 copies sold in North America, 1,915 were sold in the UK and only 13 in Russia. The claimants are Russians, Boris Berezovsky being secretary of the Commonwealth of Independent States, and reputedly the richest man in Russia, and Nikolai Glouchkov, who is managing director of Aeroflot. The magazine quoted an American businessman as saying “These guys are criminals on an outrageous scale. It is as if Lucky Luciano were chairman of the board of Chrysler”. They wrote: “Behind them lies a trail of corpses, uncollectable debts and competitors terrified for their lives”. The claimants commenced libel proceedings in England and applied for service of the writ on the defendants in the United States on the ground that the case fell within RSC Order 11 as being a claim founded on a tort where the damage resulted from an act committed within the jurisdiction, namely the publication of the article in England and was a proper case for service out of the jurisdiction. Both claimants claimed to have substantial connections with the jurisdiction through visits, business relationships and, in the case of Mr Berezovsky, personal and family. Popplewell J was not impressed. In concluding that the connections of the claimants with the jurisdiction were tenuous he said “There is no English connection in the article. It is an American magazine written in American style and is wholly connected with matters in Russia”. He refused leave to serve out of the jurisdiction. The Court of Appeal thought otherwise. It found that Mr Berezovsky had a substantial connection with this country and an important business reputation to protect here and that Mr Glouchkov’ s connections with England were also significant. It therefore concluded that in all the circumstances England was the appropriate jurisdiction for the trial. Three members of the House of Lords agreed. Because only 19 copies of the magazine were distributed in Russia and on the evidence adduced about the judicial system in Russia it was clear that a judgment in favour of the complainants in Russia would not be seen to redress the damage to the reputations of the complainants in England. Russia could not therefore realistically be treated as an appropriate forum. Nor was the United States an appropriate jurisdiction. The connections of both claimants with the United States was minimal. They could not realistically claim to have reputations which needed protection there. England was the most appropriate jurisdiction.