As Mr. Justice Graeme Mew of the Superior Court of Justice
pointed out in the recent case of Bernstein v. Poon, "defamation
litigation is a high-stakes business". The Bernstein
case was truly a perfect example of defamation litigation being not
only a high-stakes business, but also a very uneconomical one.
In this case, two prominent Toronto diet doctors got into the
ring with each other in a big way.
In 2008, Dr. Bernstein sued Dr. Poon for an injunction to stop
the publication of the book "Dr. Poon's Metabolic
Diet", an injunction requiring the retraction of allegedly
defamatory statements posted on Dr. Poon's diet website, $5
million in damages and $5 million in punitive damages.
By the time of the 7½ day trial, about six years later,
Dr. Bernstein had restricted his claims to damages only.
After the dust had settled, Dr. Poon was ordered to pay Dr.
Bernstein the grand total of $10,000 in general damages for
As the judge indicated, "the amounts spent in this
litigation are truly breathtaking". The plaintiffs
incurred legal fees of almost $550,000. The Defendant spent about
The judge pointed out that the parties in this case were able to
afford to go to trial. But the cost of doing so was exorbitant. In
fact, as the judge pointed out, in defamation cases, the costs
incurred by the parties will often exceed the monetary recovery. A
study of 47 libel and privacy cases in the United Kingdom published
in 2009 found that the costs to plaintiffs averaged 184 percent of
damages and the defendants' costs averaged 124 percent of
It appears that the fight between these parties on the question
of costs was as intense as the fight over the alleged
defamation. Although the judge concluded at the trial that
the case was more about ego than actual harm, Dr. Bernstein
maintained that the action was a genuine attempt to end the
tarnishing of his reputation, that it should not have been
necessary for him to go all the way to trial to stop the behaviour
complained of, and that he should be awarded 100 percent of his
actual costs. This was particularly so, according to him, because
even after the action started, Dr. Poon proceeded to publish yet
another edition of his book and then posted on his website a
Chinese language television broadcast showing Dr. Poon making
defamatory remarks about Dr. Bernstein.
On the other hand, Dr. Poon sought an award of costs
representing a portion of his actual legal expenses, arguing that
given the paltry amount ultimately awarded to Dr. Bernstein, the
entire matter had been dealt with in the wrong court. According to
Dr. Poon, this action should have been brought in the Small Claims
Court which has a jurisdictional limit of $25,000.
Furthermore, Dr. Bernstein's recovery at trial was less than
0.5 percent of the total amount claimed and the claims for
injunctive relief were not pursued.
At trial, the judge found that the case was "more about
turf warfare in the competitive world of diet medicine than about
reputation". In terms of Dr. Bernstein's choice of
court, the judge felt that without question, Dr. Bernstein wanted
the litigation to have the maximum possible impact on Dr. Poon and
bringing the action in Small Claims Court would not have met that
objective. As he put it, Dr. Bernstein tried to use his financial
muscle to wrestle with a competitor. The competitor, however,
stubbornly refused to back down and went on the attack in terms of
the way he carried on his defence in the action.
At the end of the day, Dr. Poon defeated most of Dr.
Bernstein's claims. However, some of Dr. Poon's comments on
which the liability for $10,000 was grounded were made after the
litigation began. Accordingly, rather than making an offer
containing even a modest monetary element, Dr. Poon
"effectively fanned the flames".
In the result, the court determined that as the overall outcome
was close to being a draw, and as the exercise had cost both
doctors a lot of money and used a scarce public resource in doing
so, each party should bear his own costs. Both doctors were
substantially out of pocket, Dr. Bernstein even more so than Dr.
Poon. One can only shake one's head and wonder whether or not,
in retrospect, either one wishes he had done things
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This paper discusses contract law issues including decisions of relevance to commercial lawyers and business leaders giving a snapshot of particular principles of interest that arose in case law over the past 12 months.
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