Michael Arrington snared in libel verdict: lessons for us all

The UK's High Court of Justice has ruled that Michael Arrington and Interserve Inc libeled Sam Sethi (see above.) The original plaint claimed that Arrington/Interserve engaged in a:

"...sustained campaign of character assassination against the Claimant alleging fraud; bank forgery and other crimes; including threats to murder a business associate; of being psychotic; pathological; threatening; despicable; disreputable; deceitful; and a cheat."

Arrington/Interserve sought to air this in public through various blog posts, the most recent of which provides the history as they see it here. Critically, they say:

This letter follows up on our March 18, 2009 letter to you, in which we explained that TechCrunch is not susceptible to the jurisdiction of English courts and the proper forum for your client’s claims would be the State of California.

In other words, both Arrington/Interserve attempted to move the case from Sethi's home ground to another jurisdiction. The UK courts thought differently.

It is my understanding that neither Arrington nor Interserve chose to defend the case in the UK courts and having given notice that they would not do so are precluded from raising a viable appeal. This means that under UK law, Arrington/Interserve are liable for any final monetary damages and costs the court chooses to award. Sethi tells me that his costs are of the order of £30,000 and the plaint calls for monetary damages of up to £50,000.

Further since this will constitute a debt to the court, should Arrington attempt to enter the UK without first having settled the matter, he might be liable to immediate arrest and incarceration. That has yet to be tested but represents a risk that Arrington will need to consider for the future.

This case raises interesting topics for enterprise generally. The UK is sometimes cast as being 'claimant friendly' in libel matters with the onus being on the defendant to make their case. Even then it is not as simple as it sounds. Here is an example:

In the UK, if someone thinks that what you wrote about them is either defamatory or damaging, the onus will be entirely on you to prove that your comments are true in court. In other words, if you make the claim, you've got to prove it!

For example, if you said Peter Sutcliffe had never paid his TV licence in his life that would not be defamatory - or it is very unlikely to be. However, if you said the same about TV boss Greg Dyke, that would be.

Why? Because Peter Sutcliffe's reputation will not be damaged by the TV licence revelation (he is after all a mass murderer). Of course, his lawyers would still be free to bring the case to court, but it is very unlikely they would succeed.

Greg Dyke, on the other hand, runs the BBC , so to say he wilfully doesn't pay his TV licence could have a seriously detrimental effect on his career. He could be fired or his reputation damaged (note:Dyke has now left the BBC).

It is not for the judge or jury (at the outset) to decide how damaged he is - they just have to confirm that such accusations are false and damaging. Then the judge and/or jury decide on monetary damages.

The fact Arrington/Interserve chose not to defend in the UK courts means that regardless of the veracity of their claims, they lose by default. It doesn't matter whether Arrington/Interserve are 100% accurate in the statements they made, they have been considered answerable to a valid plaint under UK law and having chosen to stay silent, they gave up their right of defense. Put simply: don't try to say the law doesn't apply to me and expect that to be a viable defense in all jurisdictions. By default, the judgment recognizes that Arringon/Interserve are in a position of power where what they say carries weight to a large audience and can be considered damaging.

The fact that Arrington/Interserve chose to air this in the public domain makes it worse because they cannot dispute what they have said. Worse still, by eliciting comments to the libel, they are opening the door to compounding the libel by others. How well that stands up has not been thoroughly tested although a recent ruling suggests that defamatory bulletin board comments are more likely slander.

I am all in favor of change in media and the blogosphere has opened the Pandora's Box for speaking publicly about matters anyone considers important. I give Arrington full credit for attempting to 'change the media game' and using his right to freedom of speech as a way of articulating what he believes to be true. This is an ongoing debate that will be carried well into the future. However, that has to be tempered by understanding that you cannot make the rules up and expect that jurisdictions will ignore the laws that apply in their lands. As this case shows, it doesn't work that way, regardless of how any one individual views the situation. UK law may be viewed as quirky but that doesn't matter.

In the US, it is widely assumed that freedom of speech means just that: say what you wish more or less without impunity. This case shows that while that might be true in the US, you cannot make the same assumptions elsewhere. Put bluntly - don't use your position or power to oppress others and expect you can do so without recourse. As someone who has to navigate different interpretations of software licensing, I can understand the frustrations many feel at what they see as frivolous, vexatious or just plain wrong. But the law is what it is whether any of us like it or not.

Enterprise will look at this and consider how well they have framed their public policies concerning employee blogging such that they are protected in different territories. My reading suggests that while policies might be fine in one place, they will need to be reviewed for others. My hope is that common sense will prevail and we won't see a general clamp down on the expression of honestly held opinion.

In the past, Arrington has made much of the fact that no-one has successfully sued and won. On the basis of this decision, that claim has now been shattered.

In a telephone conversation with me, Sethi pondered whether Arrington/Interserve will settle whatever the court awards. According to the plaint:

"The Claimant only wishes to restore his good reputation and will give all of any award to charity and/or the family of the colleague who suffered a fatal heart attack (Mark Orchant) and/or, to contribute towards unpaid salaries of those editors involved in the failed website, Blognation.com."

From a PR standpoint, Arrington/Interserve are in a difficult position. Do they stand back and do nothing, even though the financial onus for dealing with the Blognation.com debacle would now seem to sit squarely on their shoulders by virtue of the wording in the plaint? Or do they accept what has happened and pay whatever the court awards? Neither route is easy to navigate successfully.

Anyone who reads this blog knows I am no stranger to irreverance so as an amusing aside, when Arrington recently hired Paul Carr, Carr said:

To Michael’s credit, he didn’t hesitate in agreeing to the editorial independence (”but if you suck, I’ll fire you”) and to two of my other three demands.

Does this now mean that Arrington sucks and that he has to fire himself? In the meantime it will be interesting to see how Arrington/Interserve respond.

UPDATE: it seems in true TechCrunch fashion, they've already responded. Doesn't change what's happened in the courts. That's the point.