Blog by John Miller

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Not a good try

It's unfortunate that the first time a jury got to consider Canada's new "responsible communication" defence for libel, it did not involve a journalist but a former journalist, and one who unwisely decided to act as his own lawyer.

It did not turn out well: Shareholder rights activist Bob Verdun has been ordered to pay $650,000 to a bank director after a jury decided he had defamed him. The amount included $400,000 for aggravated damages, which is believed to be one of the largest such awards in Canadian history.

The verdict ends a five-year legal battle between Verdun and Robert Astley, whose appointment to the Bank of Montreal's board of directors he opposed, as the old saying goes, with extreme prejudice.

It helps to know a little about Bob Verdun. As founder-editor of the Elmira Independent weekly newspaper from 1974 to 1999, he was known for fearless news coverage -- his paper won the prestigious Michener Award in 1990 -- and confrontational editorials. According to an article in Law Times, he transferred that manner to the business world, turning up at annual general meetings for various corporations to demand greater transparency in board affairs.

It's not clear what prompted him to go after Astley, former president and CEO of Clarica Life Insurance Company, and former president of Sun Life Financial Canada. But in 2004, Verdun wrote to David Galloway, the Bank of Montreal’s chairman, opposing Astley’s appointment on grounds that he was "unethical, greedy, and narrowly-focussed." He followed that up by speaking for 35 minutes at the bank's annual meeting, calling Astley a "stain on this board" without integrity or ethics.

These and other moves prompted a stern defence of Astley from the bank and a warning letter from his lawyers asking Verdun to stop. But Verdun took the bank to the Ontario Securities Commission, again repeating that Astley "lacked the integrity" to serve as director.

Astley’s lawsuit, filed in May 2006, sought $1 million in damages. It alleged Verdun had deliberately held Astley up to "public scandal, ridicule, and contempt." Unhappily for Verdun, who should have known better, the case ended up before a civil jury, and he chose to act for himself.

"It’s rare for a defamation action to go to trial and it’s even rarer for them to go to trial in front of a civil jury and for you to get to the end," said Brian Radnoff, one of Astley’s lawyers. Verdun attempted to raise the defences of qualified privilege and fair comment as well as the newly created defence of responsible communication. But the jury rejected all of them and found he had acted with malice.

Because civil jury trials are such a rarity, Radnoff believes this is the first time one has heard the responsible communication defence since the Supreme Court of Canada created it in December 2009.

I have blogged before about the usefulness of this defence to journalists, but Verdun was not acting as a journalist here and no journalist would have waged such a defamatory campaign with such reckless disregard for the stipulations laid down by the Supreme Court.

In its ruling, the court gave
writers, broadcasters and bloggers greater legal protection in reporting on matters in the public interest – even if they can't prove the truth of allegations against individuals who believe their reputation has been harmed. But it says the new libel defence cannot allow people to "publish with impunity" and the right to free expression "does not confer a licence to ruin reputation." Thus, the new defence is only available to those who can demonstrate they took specific steps to verify the facts.

Let's hope Bob Verdun's comeuppance does not impair the ability of responsible journalists to persuade courts in the future that the public interest sometimes requires that journalists have the "right to be wrong."