Neutral Citation Number: [1996] EWHC 380 (QB)
IN THE HIGH COURT OF JUSTICE 
QUEEN'S BENCH DIVISION
(DIVISIONAL COURT)

Royal Courts of Justice
Strand
London, W.C.2

Date:Friday, 28th June, 1996.

Before:

MR JUSTICE FRENCH

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BRITISH COAL CORPORATION   Plaintiffs

v.

NATIONAL UNION OF MINEWORKERS AND ANOTHER              Defendants

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Handed Down Transcript of the Judgment:
Smith Bernal Reporting Limited, 180 Fleet Street,
London, EC4A 2HD
Tel:  0171 831 3183
Official Shorthand Writers to the Court)

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MR. PATRICK MILMO Q.C. and MR ANDREW MONSON (instructed by Nabarro Nathanson) appeared on behalf of the Plaintiffs.

MR. GEOFFREY ROBERTSON QC and MR. MANUEL BARCA (instructed by Bindman & Partners) appeared on behalf of the Defendants.

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J U D G M E N T (as approved by the Court)

MR JUSTICE FRENCH:
In this case the plaintiffs, British Coal Corporation, claim damages for libel against the National Union of Mineworkers (Yorkshire area) and also against one of the union's senior officials. The alleged libel was published in the "Yorkshire Miner", a monthly magazine distributed by the NUM, and the issue in question was that for April, 1992.
The allegedly defamatory words included the following:
"UDM helped British Coal steal 450 million from our pensioners"; "British Coal have stolen another 450 million from the mineworkers' pension fund with the help of the UDM", and certain other expressions to a similar effect.
At or towards the end of the plaintiffs' case, the defendants have taken the point that the plaintiffs cannot, as a matter of law, bring any action in respect of defamation. For reasons which I need not elaborate, it was proper and reasonable for the defendants to take the point at that stage rather than to do so at the start of the hearing.
The authority on which the defendants principally rely is the case of the Derbyshire County Council v. The Times Newspapers Limited [1993] A.C. 534. The headnote of the report reads as follows:
"The plaintiff, a local authority, brought an action for damages for libel against the defendants in respect of two newspaper articles which had questioned the propriety of investments made for its superannuation fund. On a preliminary issue as to whether the plaintiff had a cause of action against the defendants, the judge held that a local authority could sue for libel in respect of its governmental and administrative functions, and dismissed the defendants' application to strike out the statement of claim. On appeal by the defendants, the Court of Appeal held that the plaintiff could not bring the action for libel.
On appeal by the Plaintiff:-
Held, dismissing the appeal, that since it was of the highest public importance that a democratically elected governmental body should be open to uninhibited public criticism, and since the threat of civil actions for defamation would place an undesirable fetter on the freedom to express such criticism, it would be contrary to the public interest for institutions of central or local government to have any right at common law to maintain an action for damages for defamation; and that, accordingly, the plaintiff was not entitled to bring an action for libel against the defendants, and the statement of claim would be struck out".
In his speech Lord Keith, with whose reasons the four other Law Lords agreed, said this at page 547 at letter B:
"The authorities cited above clearly establish that a trading corporation is entitled to sue in respect of defamatory matters which can be seen as having a tendency to damage it in the way of its business. Examples are those that go to credit such as might deter banks from lending to it, or to the conditions experienced by its employees, which might impede the recruitment of the best qualified workers, or make people reluctant to deal with it. The South Hetton Coal Co. case [1984] 1 Q.B. 133 would appear to be an instance of the latter kind, and not, as suggested by Browne J., an authority for the view that a trading corporation can sue for something that does not affect it adversely in the way of its business. The trade union cases are understandable upon the view that defamatory matter may adversely affect the union's ability to keep its members or attract new ones or to maintain a convincing attitude towards employers. Likewise in the case of a charitable organisation the effect may be to discourage subscribers or otherwise impair its ability to carry on its charitable objects. Similar considerations can no doubt be advanced in connection with the position of a local authority. Defamatory statements might make it more difficult to borrow or to attract suitable staff and thus affect adversely the efficient carrying out of its functions.
There are however, features of a local authority which may be regarded as distinguishing it from other types of corporation, whether trading or non-trading. The most important of these features is that it is a governmental body. Further, it is a democratically elected body, the electoral process nowadays being conducted almost exclusively on party political lines. It is of the highest public importance that a democratically elected governmental body, or indeed any governmental body, should be open to uninhibited public criticism. The threat of a civil action for defamation must inevitably have an inhibiting effect on freedom of speech. In City of Chicago v. Tribune Co., (1923) 139 N.E. 86 the Supreme Court of Illinois held that the city could not maintain an action of damages for libel. Thompson C.J. said, at p. 90:
'The fundamental right of freedom of speech is involved in this litigation, and not merely the right of liberty of the press. If this action can be maintained against a newspaper it can be maintained against every private citizen who ventures to criticise the ministers who are temporarily conducting the affairs of his government. Where any person by speech or writing seeks to persuade others to violate existing law or to overthrow by force or other unlawful means the existing government, he may be punished ... but all other utterances or publications against the government must be considered absolutely privileged. While in the early history of the struggle for freedom of speech the restrictions were enforced by criminal prosecutions, it is clear that a civil action is as great, if not a greater, restriction than a criminal prosecution. If the right to criticise the government is a privilege which, with the exceptions above enumerated, cannot be restricted, then all civil as well as criminal actions are forbidden. A despotic or corrupt government can more easily stifle opposition by a series of civil actions than by criminal prosecutions ...'
After giving a number of reasons for this, he said, at p. 90:
'It follows, therefore, that every citizen has a right to criticise an inefficient or corrupt government without fear of civil as well as criminal prosecution. This absolute privilege is founded on the principle that it is advantageous for the public interest that the citizen should not be in any way fettered in his statements, and where the public service or due administration of justice is involved he shall have the right to speak his mind freely.'
These propositions were endorsed by the Supreme Court of the United States in New York Times Co. v. Sullivan (1964) 376 U.S. 254, 277. While these decisions were related most directly to the provisions of the American Constitution concerned with securing freedom of speech, the public interest considerations which underlaid them are no less valid in this country. What has been described as 'the chilling effect' induced by the threat of civil actions for libel is very important."
Further, from the foot of page 548 to the middle of page 549 Lord Keith said this:
"It is of some significance to observe that a number of departments of central government in the United Kingdom are statutorily created corporations, including the Secretaries of State for Defence, Education and Science, Energy, Environment and Social Services. If a local authority can sue for libel there would appear to be no reason in logic for holding that any of these departments (apart from two which are made corporations only for the purpose of holding land) was not also entitled to sue. But as is shown by the decision in Attorney-General v. Guardian Newspapers Ltd. (No. 2) [1990] 1 A.C. 109, a case concerned with confidentiality, there are rights available to private citizens which institutions of central government are not in a position to exercise unless they can show that it is in the public interest to do so. The same applies, in my opinion, to local authorities. In both cases I regard it as right for this House to lay down that not only is there no public interest favouring the right of organs of government, whether central or local, to sue for libel, but that it is contrary to the public interest that they should have it. It is contrary to the public interest because to admit such actions would place an undesirable fetter on freedom of speech. In Die Spoorbond v. South African Railways 1946 A.D. 999 the Supreme Court of South Africa held that the South African Railways and Harbours, a governmental department of the Union of South Africa, was not entitled to maintain an action for defamation in respect of a publication alleged to have injured its reputation as the authority responsible for running the railways."
Lord Keith quotes from the judgment of Schreiner JA with approval, and I do not think I need continue the citation by quoting it myself.
It is noteworthy that in the passage from page 547 of the Derbyshire case from which I have quoted, Lord Keith used the expression, "It is of the highest public importance that a democratically elected governmental body", the following words were used by him, "or indeed any governmental body, should be open to uninhibited public criticism."
The observations of Lord Keith seem to me, with respect, to be directly in point in the instant case. It is true that the British Coal Corporation is not a democratically elected body but, in the first place, Lord Keith (as I have just emphasised) does not confine his reasoning to democratically elected governmental bodies and, in the second place, the provisions of the relevant statutes show how close is the control exerted by or on behalf of the minister, himself a member of a democratically elected government, over the activities of the National Coal Board now the British Coal Corporation.
While what I am about to say forms no part of my reasoning in this case, I reach the conclusion stated with little regret because, offensive though the words used by the "Yorkshire Miner" in the article in question were, there is, as it seems to me, an element of unreality about this action. By the end of 1997 the plaintiffs will have ceased to exist. There is nothing whatsoever in the papers to suggest that the plaintiffs have suffered any damage, financial or otherwise. For about a year and a half this action was at a complete standstill. No doubt the plaintiffs had other pressing preoccupations. I accept that but, nonetheless, this claim must have ranked very low in the plaintiffs' priorities.
In my judgment, the statement of claim in this action must be struck out.
Judgment accordingly.