A reprobate’s best friend – British libel law

Read our article in the Cayman Financial Review Magazine, eversion 

I expect the worst financial scandal in the history of the Cayman Islands to unfold in the coming months. The amount in dispute is likely to exceed half a billion dollars and the ensuing litigation has the potential to clutter up the jurisdiction’s Grand Court for many years.

It is likely to receive widespread publicity around the world, embarrass Cayman on the international stage and, as with the recent global financial crisis, call into question the basic competence of those running major financial institutions. 

You are probably reading this with rapt attention, thirsty for more information and desperate for the full story. Unfortunately, Cayman’s draconian libel law precludes me from providing specifics. And that, not the much more interesting, afore-mentioned impending horror-show, is the focus of this article.

The libel law that the United Kingdom has vomited on its current and former colonies is one of the most repulsive pieces of legislation that exists in the civilised world. I cannot think of a law that is more harmful to society and so consistently produces instances of injustice.

It chills free speech, protects the reputations of reprobates, and allows questionable ventures to continue far longer than they should because the media is too intimidated to even write about them let alone expose them, due to the high likelihood of being successfully sued and bankrupted.

I am telling this sorry tale from bitter experience. Since the first libel complaint was brought in 1998, OffshoreAlert has spent more than half a million dollars on its own legal fees defending seven such actions in the United States, Canada and the Cayman Islands. Two-thirds of that total amount went on defending a single action in Cayman, despite the fact that it is just one of seven cases.

Even though the Cayman action did not go to trial and had but one or two court hearings on trifling preliminary matters, it still cost me more than twice that of a separate case at federal court in Miami that not only went to trial but also to an appeal (which we prevailed in, lest anyone should have any doubts).

The huge price difference can be attributed to two principal factors: The absurdity of the law itself and the equally ridiculous procedural nature of the British legal system.

My criticism of procedure refers to the practice of having solicitors and barristers, which essentially quadruples fees to their poor (literally) clients. When defending libel actions in the US, I speak directly with an attorney and he/she takes the case to trial.

Under the British system, I communicate with a solicitor (single-billing), the solicitor then communicates with a barrister (double-billing) and the solicitor reports back to me (single-billing). Hence, a conversation or correspondence that would cost me a couple of hundred dollars per hour in the US costs me over $1,000 per hour under the British system.

Factor in that important information is inevitably lost in translation in this game of Chinese whispers because the client (ie the pleb) cannot liaise directly with the barrister (ie the master) and I am left with a feeling that I am paying way over the odds for a system that harms my chances of winning. What a racket!

Now on to the actual law. Unlike in the US, where the plaintiff must prove that each disparaging statement is false, the burden in British libel law is on the defendant to prove that each disparaging statement is true.

This arduous task is hindered by interpretations on words, phrases and their meanings by judges that, to me and many others, often seem out of touch with reality and common sense. For example, in 2009, Britain’s then-leading libel judge ruled that an accomplished science author who wrote that the British Chiropractic Association “happily promotes bogus treatments” had to prove not only that the treatments were bogus but that the BCA knew them to be bogus and, therefore, was being deliberately dishonest, something that is virtually impossible to prove.

Fortunately, this absurd ruling was overturned on appeal – but at great cost and anguish to the defendant. You may have noticed that I have not named the judge. This is a deliberate omission on my part out of concern that the Cayman Financial Review might be sued for libel. That’s an example of the chilling effect the law has on journalists. It deters any and all criticism, even that which is responsible and intelligent.

The law is so heavily weighted in favour of plaintiffs and judges/juries so poor in their decision-making that plaintiffs routinely prevail, even those who could reasonably be described as dubious.

Victors in two of the most notorious libel cases in British legal history were author and former politician Jeffrey Archer and US-based fast food giant McDonald’s. In 1987, Archer won £500,000 in damages against The Daily Star newspaper, despite both parties agreeing that Archer had paid a prostitute, with the court ridiculously accepting Archer’s claim that the payment he made was not for sex but out of benevolence. Justice eventually prevailed when, 12 years later, another newspaper exposed that Archer had lied during the libel trial and, in 2001, he was sentenced to four years in prison for perjury and perverting the course of justice.

In the McDonald’s case, the action became so infamous that it was given its own name by the media – “McLibel” – and a movie was made about it. In a nutshell, McDonald sued two penniless environmental activists who were handing out leaflets criticising the company for a number of alleged acts.

The actual trial, not the proceedings but the trial itself, lasted two-and-a-half years, which is ridiculous in itself, and, at the end of it, one of the conclusions of the judge was that “McDonald’s food is not very unhealthy as stated in the leaflet”, something that, I’m sure, most people would accept as silly, particularly bearing in mind the chronic levels of obesity in the US.

British libel law is so draconian that a newspaper in Bermuda was advised by its attorney not to follow up an OffshoreAlert article about a request for judicial assistance filed at federal court in the US regarding a Bermuda-based businessman who was being investigated in the Netherlands for suspected involvement in criminal activity.

Although the document could be downloaded by any member of the public from the US court’s website, the Bermuda newspaper was advised that, because the content of the document had not been read out in court, it was too dangerous to publish. The attorney even advised the Bermudian newspaper against providing a link to the OffshoreAlert article for fear of breaching the local libel law.

British libel law and the way it is enforced has led to plaintiffs all over the world choosing the country as a venue to bring libel actions even when neither the plaintiff nor defendant lives there or has any meaningful connection to the jurisdiction. This practice is known as ‘libel tourism’.

It also led to the US passing the SPEECH Act in 2010 which makes foreign libel judgments unenforceable if they are inconsistent with First Amendment protections of free speech, ie are considered to be repugnant to the US Constitution. British libel law, which is repugnant to anyone with a genuine sense of justice or fair play, clearly falls into this category.

British libel law is merely an extension of that country’s unhealthy obsession with secrecy. The culture is to sweep everything under the carpet and pretend it doesn’t exist, a collective denial of reality, if you will. If Britain was a person, it would long ago have been diagnosed as mentally ill. The less the public knows, the better. That’s the mantra.

I was born and raised in Britain, leaving at the age of 24 for Bermuda and then the US. Like every Brit, I was brainwashed into believing that the British legal system was the best in the world. It took me many years of living overseas and encountering one nonsensical ruling after another in both civil and criminal cases in the UK and its overseas territories before I realised that it does not hold a candle to the US legal system in terms of actually dispensing justice.

There is an upside, however. The fear that British libel law generates among journalists working in jurisdictions like the Cayman Islands and Bermuda is good for OffshoreAlert because it allows us to report information that local journalists are too afraid to cover, thereby giving us a competitive edge.

The next time you read a ripping yarn in OffshoreAlert about alleged wrongdoing by the rich and powerful in Cayman and wonder to yourself ‘Why am I not reading this in the local media?’, you will know the answer: Local journalists and publishers don’t want to lose their shirts.


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David Marchant

David Marchant is a Miami, Florida-based investigative journalist and publisher of OffshoreAlert newsletter (www.OffshoreAlert.com), which has been covering Offshore Financial Centres since 1997, and organiser of the OffshoreAlert Financial Due Diligence Conference, which is held annually in Miami. His work is regularly referenced by the world’s major newspapers, television stations, book authors and regulators.

David Marchant
123 SE 3rd Avenue #173,
Miami FL 33131, USA

+1 (305) 372 6267
[email protected]


OffshoreAlert specializes in reporting about Offshore Financial Centers, with an emphasis on fraud investigations, and also holds an annual conference about OFCs, focusing on products and services, tax and political issues, compliance, money laundering, fraud, asset recovery and investigations.

The company is 100%-owned and managed by David Marchant, a United Kingdom national who has been a journalist since 1984, working in the UK, Bermuda and the USA.

Marchant and/or OffshoreAlert are generally considered to be leading authorities on OFCs and serious financial crime. They are routinely quoted or referenced by news organizations around the world, including The Wall Street Journal, Los Angeles Times, The Washington Post, USA Today, The Miami Herald, Vancouver Sun, The Economist, BusinessWeek, CBS News, BBC Radio, Bloomberg Television, United Press International and many more.

We have also been referenced in non-fiction books such as 'The Sink: Crime, Terror, and Dirty Money in the Offshore World', by Jeffrey Robinson, in 2003 and 'Crime School: Money Laundering: True Crime Meets the World of Business and Finance', by Chris Mathers, in 2004 and in Government reports such as 'Correspondent Banking: A Gateway For Money Laundering' by the U. S. Senate Permanent Subcommittee on Investigations in 2001. Marchant also wrote the 'Money Laundering' chapter of a textbook for financial journalists called 'Covering Globalization: A Handbook for Reporters', which was published by Columbia University Press, in New York, in 2004.

OffshoreAlert's exposés on fraud, tax evasion and money laundering have contributed to the collapse of several international financial groups and criminal charges being brought against their principals.

A testament to the quality of our reporting and our unwillingness to yield to bullying is that Marchant and/or OffshoreAlert have been sued for libel multiple times in the USA, Canada, Cayman Islands, Grenada, and Panama and have never lost, published a correction, issued an apology or paid one cent in legal fees, costs or damages to the plaintiffs.

OffshoreAlert is neither pro- nor anti-OFCs. We are independent. Our only agenda is to provide credible, accurate and useful information so that our clients can make better-informed decisions.


123 SE 3rd Avenue #173,
Miami FL 33131, USA

+1 (305) 372 6267
[email protected]