In the case of Cannell v George [2024] UKSC 19, 12 June 2024, the UK Supreme Court has offered important guidance on the elements required to prove the tort of malicious falsehood and the criteria for awarding mental distress damages in such cases.

Brief factual background

A former recruitment consultant sued her previous employer for libel, slander, and malicious falsehood after accusations of breaching restrictive covenants.

First Instance Judgment

The first-instance judge dismissed all the claims due to insufficient proof of harm. Saini J held that while the claimant proved that the statements complained of were false and published maliciously, due to the fact that the claimant failed to prove special damage pursuant to s.3(1) of the Defamation Act of 1952 (the “Defamation Act”), the claim for malicious falsehood was dismissed.

Court of Appeal

The claimant appealed the decision, and the main point of the appeal revolved around the correct interpretation of s.3 of the Defamation Act. The Court of Appeal, in upholding the appeal, held the following:

1. Correct Test: The forward-looking test is the correct interpretation of s.3 of the Defamation Act, which is consistent with Parliament's intention.
2. Nominal Damages: Only nominal damages would be awarded for general damages, excluding emotional distress.

Supreme Court

The defendants appealed to the Supreme Court, which upheld the Court of Appeal’s judgment. The Supreme Court provided guidance on the meaning of section 3(1) of the Defamation Act 1952, which stipulates that “it shall not be necessary to allege or prove special damage” if the words upon which the action is founded “are calculated to cause pecuniary damage.” The Supreme Court concluded:

1. Forward-Looking Test: s.3(1) of the Defamation Act requires a forward-looking test.
2. Presumption of Loss: Satisfying s.3(1) creates an irrebuttable presumption of some financial loss but not substantial financial loss, entitling the claimant to nominal damages.
3. Knowledge Requirement: It is an essential part of a claim for malicious falsehood that the defendant knew or should have known that their words were likely to cause the claimant financial loss.
4. Proof of Loss for Substantial Damages: The claimant needed to prove the amount of their loss to recover more than nominal damages.
5. Mental Distress Damages: Compensation for injured feelings could only be recovered if it was a consequence of significant financial damage. In this case, the claimant was only able to recover nominal damages​

Relevance to Cyprus

This judgment is particularly relevant in Cyprus, in the sense that s.25(1) of the Civil Wrongs Law (Cap. 148) also requires proof of special loss for malicious falsehood claims. The decision reinforces the necessity of demonstrating actual financial loss to pursue damages for emotional distress in such cases, impacting how similar cases may be approached under Cypriot law.