LORD KEITH OF KINKEL

My Lords,

This appeal raises, as a preliminary issue in an action of damages for libel, the question whether a local authority is entitled to maintain an action in libel for words which reflect on it in its governmental and administrative functions. That is the way the preliminary point of law was expressed in the order of the Master, but it has opened out into an investigation of whether a local authority can sue for libel at all.

Balcombe L.J., giving the leading judgment in the Court of Appeal, summarised the facts thus:

"The facts in the case are fortunately refreshingly simple. In two issues of 'The Sunday Times' newspaper on 17 and 24 September 1989 there appeared articles concerning share deals involving the superannuation fund of the Derbyshire County Council. The articles in the issue of 17 September were headed 'Revealed: Socialist tycoons's deals with a Labour chief and 'Bizarre deals of a council leader and the media tycoon': that in the issue of 24 September was headed 'Council share deals under scrutiny.' The council leader was Mr. David Melvyn Bookbinder; the 'media tycoon' was Mr. Owen Oyston. It is unnessary for the purposes of this judgment to set in any detail the contents of these articles: it is sufficient to say they question the propriety of certain investments made by the council of moneys in its superannuation fund, with Mr. Bookbinder as the prime mover, in three deals with Mr. Oyston or companies controlled by him. Excerpts from the articles giving the flavour of the allegations made will be found in the judgment at first instance [1991] 4 All E.R. 795 to which those interested may refer. The council is the 'administering authority' of its superannuation fund under the Superannuation Act 1972 and the Local Government Superannuation Regulations 1986 (S.I. 1986 No. 24) made thereunder."

Following the publication actions of damages for libel were brought against the publishers of The Sunday Times, its editor and the two journalists who wrote the articles by Derbyshire County Council ("the appellants"), Mr. Bookbinder and Mr. Oyston. Mr. Oyston's action was settled by an apology and payment of damage and costs. The statements of claim in this action by the appellants and in that by Mr. Bookbinder are for all practical purposes in identical terms. That of the appellants asserts in paragraph 6 that there were written and published "of and concerning the council and of and concerning the council in the way of its discharge of its responsibility for the investment and control of the superannuation fund" the words contained in the article of 17 September, and paragraph 8 makes a similar assertion in relation to the article of 24 September. Paragraph 9 states:

"By reason of the words published on 17 September 1989 and the words and graph published on 24 September 1989 the plaintiff council has been injured in its credit and reputation and has been brought into public scandal, odium and contempt, and has suffered loss and damage."

No special damage is pleaded. On 31 July 1991 French J. refused an application by the appellants to amend the statement of claim so as to plead a certain specific item of special damage.

The preliminary point of law was tried at first instance before Morland J. who on 15 March 1991 decided it in favour of the appellants (1991 4 All E.R. 795). However, on appeal by the present respondents his judgment was reversed by the Court of Appeal (Balcombe, Ralph Gibson and Butler-Sloss L.JJ.) on 19 February 1992 [1992] Q.B. 770. The appellants now appeal, with leave given in the Court of Appeal, to your Lordships' House.

There are only two reported cases in which an English local authority has sued for libel. The first is Manchester Corporation v. Williams [1891] 1 Q.B. 94: 63 L.T. 805. The defendant had written a letter to a newspaper alleging that "in the case of two if not three departments of our Manchester city council, bribery and corruption have existed and done their nefario