A Warning Shot For Media Lawyers To Know About

Australian bilionaire Kerry Stokes has been ordered to pay AU$13.5 million in legal costs to the media outlets that successfully defended themselves in failed defamation proceedings.

The order caps a bruising and expensive saga that has exposed not only the limits of defamation law but also the sheer financial risk of funding litigation on behalf of someone else.

Bn Roberts-Smith, a decorated but disgraced former soldier, launched proceedings in 2018 against The Age, The Sydney Morning Herald and The Canberra Times over reports alleging he committed war crimes in Afghanistan and bullied fellow soldiers.

Justice Anthony Besanko found, on the balance of probabilities, that Roberts-Smith was complicit in the murder of four unarmed Afghan civilians, engaged in bullying and intimidation, and that the newspapers’ reporting was substantially true. Appeals to the Full Federal Court and the High Court both failed.

The costs order was made against Stokes’s private company, Australian Capital Equity (ACE), which bankrolled Roberts-Smith’s legal fight. The agreement to pay indemnity costs leaves ACE liable for the near-total legal bill of the newspapers, a punishment for backing what the courts ultimately viewed as a hopeless case.

The decision provides a sharp lesson in the dangers of third-party funding in defamation litigation. For media lawyers and defendants, it is also a landmark moment as the courts have reaffirmed truth as the most potent defence and shifted the balance away from wealthy plaintiffs looking to intimidate publications with deep-pocketed legal campaigns.

For Kerry Stokes, it means writing a cheque that underlines one of the most expensive miscalculations in Australian legal history.