## Facts

- National newspapers published prominent reports stating that City police/Fraud Squad were inquiring into the affairs of a company chaired and managed by J. Lewis.
- Lewis and the company sued for defamation, alleging readers would understand the publications to mean they were guilty of, or at least suspected of, fraud or dishonesty.
- The newspapers admitted the publications were defamatory in their ordinary meaning but pleaded justification limited to the truth that a police inquiry was occurring, and denied any meaning imputing actual guilt.
- At trial, the judge ruled the words were capable of bearing a meaning of guilt of fraud and left that meaning to the jury.
- Juries returned plaintiff verdicts and awarded very large damages, suggesting acceptance of a “guilt” imputation.
- The Court of Appeal set aside the verdicts and ordered new trials due to misdirection on meaning and excessive damages.
- The plaintiffs appealed to the House of Lords, seeking restoration of the verdicts.

## Issues

1. Whether reports that police were inquiring into the company’s affairs were capable, in their natural and ordinary meaning to the ordinary reader, of imputing that the plaintiffs were guilty of fraud.
2. What roles the judge and jury have in determining the meaning of allegedly defamatory words, including implied meanings.
3. Whether the damages awards, including to a corporate claimant, were impermissibly excessive given the nature of compensable harm.

## Decision

- The House of Lords dismissed the appeals and upheld the orders for new trials.
- The publications were not capable, in their natural and ordinary meaning, of stating or implying that the plaintiffs were guilty of fraud; they conveyed only that an inquiry was occurring.
- The trial judge misdirected the jury by permitting a “guilt of fraud” meaning that was not reasonably open on the words.
- The Court of Appeal was entitled to intervene given the excessiveness of the awards, particularly where no special damage was pleaded and proof of specific financial loss was limited.

## Legal Principles

- Meaning in defamation is assessed by the natural and ordinary meaning the reasonable, ordinary reader would take from the publication, including reasonable implications but excluding strained or speculative interpretations.
- The judge must decide, as a matter of law, which defamatory meanings the words are capable of bearing; only those meanings may be left to the jury.
- The jury decides, as a matter of fact, which meaning within the permissible range was actually conveyed.
- A report of a police inquiry or investigation does not, without more, necessarily impute guilt of criminality; it may convey only that the subject is under inquiry or suspicion.
- A company may recover for defamation only for economic injury (including harm to goodwill), not injury to feelings.

## Conclusion

The House of Lords held that reporting a police inquiry into a firm was not capable of meaning the plaintiffs were guilty of fraud, faulted the trial judge for leaving an impermissible “guilt” meaning to the jury, and upheld new trials due to misdirection and excessive damages, reaffirming that corporate defamation damages are limited to economic loss.


Lewis v. Daily Tel. Ltd., [1964] A.C. 234 (H.L.)