The award-winning Observer and Guardian journalist Carole Cadwalladr has been ordered to pay significant legal costs to the prominent Brexit backer Arron Banks.
Banks, who donated a record £8m to the pro-Brexit Leave.EU campaign group, originally lost his case against Cadwalladr in his libel action over her remarks in a speech and a tweet.
However, in February the multimillionaire businessman partially reversed her victory at the court of appeal and, after damages of £35,000 were agreed, Cadwalladr has now been told by the court to pay costs running into several hundreds of thousands of pounds.
Guardian News and Media, the global news organisation that publishes the Observer and Guardian, criticised the latest development in the four-year battle between Banks and Cadwalladr for delivering a “chilling precedent” that could inhibit press freedom. “Carole Cadwalladr’s award-winning journalism has prompted worldwide debate about social media, privacy and political targeting,” GNM said.
“The very high costs award made against Carole despite her journalism having been found to be in the public interest is very concerning, and has the potential to stifle freedom of expression in this country.”
The case revolves around comments made by Cadwalladr in a Ted video talk broadcast online in April 2019, during which she accused Banks of lying about “his covert relationship with the Russian government”, with a tweet linking to the speech.
Banks argued her remarks were “false and defamatory” and sought damages and an injunction to restrain the continued publication of the remarks. Cadwalladr abandoned her defence of truth before the main hearing. Then, last June, in a judgment hailed as a landmark victory for public interest journalism, Mrs Justice Steyn found that Cadwalladr had a public interest defence under section 4 of the Defamation Act 2013, which protects journalists who can show that they reasonably believed that publishing the statement complained of was in the public interest.
The judge also ruled that the public interest defence fell away from April 2020, when a statement was issued by the National Crime Agency that there was no evidence Banks had broken the law, but the judge found Banks had not suffered serious harm as a result of the continuing publication.
Banks went to the court of appeal, which partially ruled in his favour, concluding serious harm had been caused by the continuing publication after April 2020. However, he lost on other grounds of his appeal.
Following the appeal decision, the parties agreed he should be paid £35,000 in respect of the damage caused by the continuing publication. The court then ruled on costs.
The GNM statement said: “While the appeal court ruled in favour of Arron Banks on the issue of the continued publication of the Ted talk, the court noted he had lost on the major issue of public interest, which had absorbed most of the time and money [at the initial trial].”
Last week, court documents outlined the legal costs that Cadwalladr has been ordered to pay, stating the appeal court had considered the “relevance of free speech considerations and the potential chilling effect of large costs orders”. It concluded Cadwalladr must pay 60% of Banks’s original trial costs, citing an initial sum of £400,000 to be paid “pending agreement or assessment”.
In addition, she was told to repay £790,634 in costs that Banks paid her after he initially lost the case last year.
Finally, Cadwalladr, who has won awards for her reporting, including on the Cambridge Analytica scandal, was ordered to pay a third of his appeal court costs, listed as £52,000.
The documents state “all the sums [are] payable” by 31 May, although Cadwalladr can apply for extra time to pay.
It is also possible that the legal battle may continue in the form of an appeal by Cadwalladr to the supreme court on the issue of costs.
Cadwalladr, who set up a crowdfunding site to help fund her defence, said she was “hugely disappointed”. Banks has called it “vindication”.
