An Anomaly: Special Damages for Libel

In July 2011, South Africa’s Supreme Court of Appeal delivered a judgment that ruled, for the first time in South Africa, that special (or pecuniary) damages were not recoverable in a defamation action. In this regard, Media 24 Ltd v SA Taxi Securitisation (Pty) Ltd1 not only wrought a substantial change in South African law, but also supplied the only detailed deliberation on whether such damages are (or ought to be) competent relief for defamation to be found virtually anywhere in Commonwealth jurisdictions. Apart from quantum, the issue of damages for libel has evoked very little controversy in Commonwealth jurisdictions: whether compensatory or exemplary (punitive) their award has been uncontentious, provided a libel has been proved. In this, there has been one curiosity: while damages for pure economic loss were not, until Hedley Byrne v Heller,2 permitted for negligent misstatements, for libellous statements they always were. This is curious because of the courts’ longstanding wariness of extending liability too easily in respect of the written and spoken word. Aside from libel cases, courts recognised that statements can easily and informally be made and then circulated to an unlimited and unquantifiable audience or readership, resulting in virtually unlimited potential damages. This was contrasted with a negligent act or defective product where the damage it might do was almost always limited in circulation and loss.3 This reflected a determination not to open the floodgates to an indeterminate number of claims. The concern was twofold—the difficulty of predicting, at the time of publication of the statement, the extent of exposure to liability, and the possibility of disproportionate exposure in both the number of potential claimants and the quantum of such claims, when compared with the fault of the publisher. Of course libel judges are acutely aware, when assessing general damages, of the mercurial, unpredictable and often indeterminate extent of publication, and so one would expect them to share these concerns. Thus the Supreme Court of Canada has held that ‘a defamatory statement can seep