image: Emmerson via 'Red Alert' (click for link)

My own meagre experience is that a court date focusses the mind of the ‘offending’ party.
‘Out-of-court settlement reached on the courthouse steps’ has acquired cliché status.

So it seems to have been with Cabinet Minister Nick Smith who (finally, after five years) issued an apology to a company suing him for defamation over ‘incorrect’ comments he made about their timber product while still a footloose and fancy free Opposition spokesman.

Apology from Nick Smith read to the court:

“I apologise for having made public statements that did not fully represent the position in relation to TimberSaver. In particular, I now accept I overstated the risks associated with the use of TimberSaver; that the problems were with the marketing of timber, and ensuring the conditions of use were complied with, that were not primarily the responsibility of Osmose and that, as a result, some of the statements I made were incorrect and unfair to Osmose,” Nick Smith said (quoted in MP ‘delighted’ case settled out of court — NZ Herald).

In other words: “I shot my mouth off and didn’t have the facts.” Oops.
Too bad taxpayers had to contribute $209,000 to his ‘defence’. (Bloody ridiculous!)

Lesson learned, do you think? I’m not sure.
We discussed Nick’s slow learner status earlier. I think he’s what you could call ‘a resistant case’… as indicated by this follow-up self-serving gobbledygook statement issued afterwards:

“Although I’ve been very grateful to have received $209,000 of public money from Parliamentary Service, given that the work involved my work as the then opposition spokesperson on building and construction. “The cost to me personally is in excess of what it has cost the public purse. Sometimes that’s the price for standing up for what you believe in,” he said.

“…standing up for what you believe in” — riiiight, Nick.

Oh, and the terms of the settlement are confidential. Surprise me. Why should they be?

Nick Smith is not a hero, in my eyes, however he sees himself. But he is a whistle-blower, so kudos.

The case highlights one of the interesting things about defamation — financial damages.
Why the Osmose case was a defamation action worth pursuing is that it wasn’t just an issue of untrue statements leading to ‘hurt feelings’:

“Osmose … alleged that statements made in July 2005 about the company’s surface-treated timber product, T1.2, destroyed the product’s reputation and the company lost more than $14 million in projected profit.“

So (a) untrue (‘incorrect’ as Nick Smith now admits) and (b) damaging — future profits destroyed by publication of the untrue statements.

If the statements had been TRUE and the profits destroyed — too bad. It was the fact that they were untrue and, I suspect the pugnacious Nick Smith (still clinging to the ‘standing up for what I believe in’ — even if it’s untrue!) apparently until today refused to put it right and issue a correction. (Easy to be gung-ho, Nick, with taxpayer funding — albeit just a subsidy.)

I discussed some related issues with respect to an in-some-ways similar case at PropertyTalk in a post entitled ‘Better to die on your feet that live on your knees‘ which was prompted by threats against a whistle-blower.

The threat is often “defamation proceedings” just as Sarah is facing (the threat, not the action). Defamation is an extraordinarily expensive course of legal action to take, according to most lawyers you’ll talk to — and a real gamble. Even if statements in question are ‘proven’ to be ‘untrue’, the injured party has to prove financial damage as a direct result of their publication.

So for example, while you might at first blush consider it pretty easy for Matthew Gilligan to prove Phil Jones’s negative comments about Gilligan and GRA’s professional competence and ethics around the tax liens argument earlier this year were ‘damaging’ to their reputation … it’s quite a different matter for Gilligan to show a financial loss has resulted. In fact, if I recall, Gilligan posted that GRA had “lost NO clients” as a result of Jones’s smear. (A shot in his own foot?) Although the offensive blog has been removed, pending… what?… the process has been expensive.

So it may be with these business directory wallahs. It’s one thing to say: “Oh those statements are technically untrue and my feelings are hurt”, quite another to show demonstrable financial harm (a drop in sales, cancelled subscriptions etc) as a result of the ‘bad’ publicity or those specific comments. Hence, I guess, the implausible effort by their lawyers to show that Sarah’s comments were somehow ‘made in the course of business’ – i.e. subject to the Fair Trading Act. Grasping at straws, if you ask me. Trying to intimidate her.

Of course, the financial cost of having the argument: instructing lawyers to answer letters, respond to a summons or statement of claim as necessary, and preparing a ‘defence’ can be extremely challenging. It’s too much for most people, especially if, like Sarah, they’re not directly victims but are rather just speaking out as a good citizen.

That’s why it’s common for people to cave in or crumble under the pressure and financial risk. They walk away. I can understand that, can’t you? Choose your battles.

A bit of satire here.