A law meant to protect the exercise of free speech from abusive libel lawsuits has been turned on its head, with powerful groups attempting to use it as a licence to smear reputations, Ontario’s top court said in a ruling on Tuesday.
The law, enacted by Ontario in 2015, stressed the public interest in open debate, and was aimed at protecting critics of the wealthy and powerful from drawn-out, costly defamation lawsuits, or the threat of them.
In unusually strong language, the Ontario Court of Appeal said the law is being misused by the wealthy and powerful, who are exploiting it to wield the threat of exorbitant legal cost awards against parties whose reputations they may have damaged. In those circumstances, the law effectively protects defamation, not free speech.
“The new framework was not a ‘carte blanche’ to defame,” Justice Sarah Pepall wrote Tuesday in the 3-0 decision, which rejected a funeral home operator’s request for the court to toss out a defamation suit against it.
Supreme Court ruling stresses right to sue to protect reputation
Free-speech advocates call that framework an anti-SLAPP law, because it is meant to put a stop to frivolous defamation suits intended to shut down criticism, which are sometimes known as strategic lawsuits against public participation.
The idea is to allow those sued for defamation to ask a judge to throw out blatant attempts to intimidate and silence them. British Columbia enacted a similar law in 2019, and several U.S. states have such laws. The legal process is supposed to be fast – the Ontario law calls for courts to hear these cases within 60 days – and cheap.
Instead, that process has become an expensive marathon. The Ontario Court of Appeal seems determined to rescue the anti-SLAPP law. In the past two years alone, it has handled 15 anti-SLAPP appeals. And it has not liked what it has seen.
What has happened, the court said in Tuesday’s ruling, is that powerful interests seeking to protect their ability to defame others are using the prospect of expensive litigation strategically – the reverse of what the law intended.
And the case before the court illustrated the point.
Canada’s largest funeral home enterprise, Park Lawn Corp., had used the anti-SLAPP law to try to shut down a defamation lawsuit over comments made by its chief executive officer, Bradley Green, in an industry newsletter. Mr. Green had alleged dishonest business dealings on the part of Kahu Capital Partners Ltd., an investment manager. Kahu denied the allegation and sued for defamation.
The case was first heard by a lower-court judge, to whom Park Lawn delivered an outline of its legal costs, which amounted to $376,000. Under the anti-SLAPP law, a party seeking to shut down a defamation suit is entitled to its costs if it wins. The party on other side – the one seeking to protect its reputation through a defamation suit – is not presumed entitled to costs if it wins.
That legal twist has been an incentive to file anti-SLAPP lawsuits, even where the true characteristics of such lawsuits are missing, the appeal court wrote, citing a study by University of New Brunswick law professor Hilary Young of anti-SLAPP cases in Ontario and B.C.
From here on, the appeal court said, legal cost awards should normally be capped at $50,000 in anti-SLAPP cases. And it upheld a lower-court judge’s decision to award Kahu partial legal costs of $31,000 from Park Lawn, even though Kahu was not the party that brought the anti-SLAPP case. The court said this was justified because of Park Lawn’s misplaced strategy in filing the anti-SLAPP suit. (Park Lawn lost at the lower court, too.)
“The cost of litigation is a plague that has infected our system of justice and serves to undermine its efficacy,” Justice Pepall wrote, supported by Justice Gary Trotter and Justice Julie Thorburn.
Joseph Groia, a lawyer representing Kahu, praised the court for setting a $50,000 limit on legal cost awards, and for instructing lower courts that they should do their best to stick to the 60-day time limit set out in the anti-SLAPP law for hearing cases. In the lower court, the case took eight months to be heard.
“These are both incredibly important steps,” Mr. Groia said. Lawyers should now understand that anti-SLAPP lawsuits “have to be reasonable and proportionate, and people trying to defend them should not be worried about a big law firm spending a million bucks.”
Robert Staley, a lawyer for Park Lawn and its CEO, did not reply to a request for comment.
Prof. Young said the appeal court is “palpably frustrated with the anti-SLAPP regime and how it’s being misused. It notes the irony of a tool that was supposed to improve access to justice instead being used to cause delay and ramp up costs.”
She said the ruling will be influential in British Columbia courts, adding: “It will be interesting to see whether this chills anti-SLAPP motions – and if so, if it chills the right ones.”
Sean Fine