03/02/2020 Reachlocal UK Ltd & Anor v Bennett & Ors [2014] EWHC 3405 (QB) (21 October 2014) name in the United Kingdom. By virtue of s.1(1), Defamation Act 2013, a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant; and by s.1(2), harm to the reputation of a body that trades for profit is not 'serious harm' unless it has caused or is likely to cause the body serious financial loss. There is of course a very substantial special damage claim, but it is a special damage claim which flows from publication of words which in my judgment will have been understood to refer primarily to the first claimant, and will have caused damage to the first claimant, rather than to its Netherlands parent company. In the course of his submissions, Mr Singla made clear, very sensibly, that he limited the claim for special damage to the first claimant. But the second claimant has judgment for damages to be assessed, which means such judgment as it appears to the court to be entitled to on the statement of case (CPR 12.11). What is the consequence of the fact that it has judgment? The judgment includes judgment for damages for defamation. It therefore assumes that the second claimant is entitled to damages for the publication of defamatory words, and therefore – because words are no longer defamatory otherwise - that the s.1 serious harm threshold has been passed. Yet but for that judgment, it seems to me that there might be an uphill argument to persuade a court that the threshold had been crossed. It seems to me that the practical (if not intellectually compelling) solution to this difficulty is to award the second claimant a nominal sum by way of general damages. Special damages for defamation 35. The claimants' pleaded case is that they have suffered very substantial loss of business and revenue from customers who, having had notice of the defendants' allegations, no longer wish to make use of the claimants' services. As at the date of service of the particulars of claim, 29 customers had informed the first claimant that they were putting an end to their business relationship with them. That figure is now 71. 36. The first claimant's original position, as pleaded, was that the expected loss of monthly revenue from the 29 customers who terminated their business relationship was £503,525, not including future business. There was also a claim for lost revenue from customers who had been ready, or preparing, to commit themselves to contracts with the first claimant; for the lost potential leads that the first claimant expected would have resulted in signed contracts; and the loss of potential customers who would now not consider the business relationship with the first claimant. In addition there was a claim for lost management time spent in investigating and managing the claim. 37. However, the claim has changed with the passage of time, as the true extent of the claimed loss has become clearer. In his fourth witness statement, Mr Bray relied on an immediate loss of revenue as a result of cancelled campaigns of around £430,705, representing a total loss of profit of some £167,730. However, in his fifth witness statement dated 2 October 2014, and in his oral evidence to me, he explained that the figures claimed for immediate loss of revenue were misconceived, because advertisers paid for each advertising cycle upfront. In fact, the figures which had been stated as representing immediate loss of revenue turned out to be no more than an internal accounting mechanism designed to express the total monthly value, in terms of revenue and profit, of each of the cancelled advertising campaigns. Since the campaigns had been paid for in advance, there was in reality no loss under this head. 38. Mr Bray also relied on loss of future revenue and future profit, based on the number of advertising cycles that the customers in question had signed up to but for which they had not yet paid. Customers complete a form called an Insertion Order, in which they state which services and how many advertising cycles they require. They pay for each cycle before it goes live. Mr Bray's evidence was that the loss of future revenue under this head was around £762,845, and the loss of future profit, net of tax, was about £302,432. That figure excluded the future business that the first claimant expected to win by way of renewals, and by way of further services or campaigns sold to them. 39. A spreadsheet was produced as part of the evidence of Mr Bray, which listed the 71 customers who had decided to do no further business with the first claimant. Of those, some 37 were customers who cancelled not merely their current cycle of advertising but also future cycles to which they had committed but for which they had not yet paid. The breakdown of the loss of future revenue and profit www.bailii.org/ew/cases/EWHC/QB/2014/3405.html 9/14