Think twice before airing your dirty linen in public

Year Published: 2013

Court cases can quite often involve allegations of impropriety or misconduct. Whether these are justified or not, this can have a damaging effect on your company or you personally if you are named in the proceedings.

If the allegations about you or your company are untrue, some people might wrongly assume that they can bring a claim in defamation and can ask for the hearing to be held in private. Particularly as you might assume that a private court hearing should protect you from further embarrassment or humiliation, as you state you’re innocence?

Unfortunately you will not have this recourse as there will be a defence, known as ‘absolute privilege’.

Why can’t the court case be heard in private?

The starting position is that the hearing will be in public. The reasoning behind this is the courts must be seen to be providing justice. So in considering any application for the hearing being in private the court has to weigh up the competing interests of maintaining the public interest of open justice and the reputation of the parties. Unless it can be shown that the court case is being abused by making knowingly false allegations then this is going to be a difficult task.

This has recently been confirmed in the case of Global Torch Limited v Apex Global Management Limited and others [2013] EWCA Civ 819.

This case related to a dispute between shareholders and directors in relation to unfair prejudice and as is often the case for disputes of this nature, contained allegations of misconduct.

However, the Court of Appeal refused the application for the hearing to be held in private.

The court stated that it is quite normal for allegations of misconduct to be made in cases of this nature and the requirement to maintain the public interest for open justice outweighed the reputations of the parties involved.

So, if you cannot bring a claim for defamation and it is likely that any application for the hearing to be held in public will fail, what can you do to protect the reputation of your company?

There are alternatives to court action, known as Alternative Dispute Resolution (ADR).

Frankly you should be doing this anyway. It is often quicker and cheaper in any event. However, you will note from above that reputation preservation is just another factor to take into account when considering ADR. For example any mediation will be confidential between the parties.

If you can see a dispute brewing, get early advice as to the best course to take. It is possible to avoid court proceedings that should be a last resort in any event.

If you would like to discuss any possible issues you may have or contemplating how to tackle a dispute, please contact our Dispute Resolution team on 0161 475 7676.

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