Allegations and denials are the stock-in-trade of journalism but they can be hot to handle under English libel law – as Sir Stelios Haji-Ioannou’s current libel claim shows.

easyGroup founder Sir Stelios is suing serviced-offices provider Regus Group plc, and its chief executive and a director, Tim Regan, over denials made to a journalist about Sir Stelios’s allegation that the defendants had misused confidential information.

His libel claim follows two events: a meeting at a London hotel at which easyGroup’s plan to launch a serviced-offices business, called easyOffice, was discussed, and a subsequent dispute over a trade mark, ‘EASYOFFICE.’

Sir Stelios alleges confidential information disclosed by him at the hotel meeting was misused in relation to Regus’s decision to start catering for the budget end of the serviced-offices market in addition to its established top-quality offering.

He contacted the Financial Times about his allegation and passed various documents to one of its reporters.

The reporter approached Regus’s PR firm for comment. It provided the following statements on behalf of its client, refuting Sir Stelios’s complaint:

“These allegations are completely unfounded and we have absolutely no case to answer. Regus pioneered serviced offices almost 20 years ago and was the original low cost champion offering products from a price as low as £10. Since 2001, there have been a number of meetings when Stelios has picked our brains on this sector.

“There was no detailed business plan presented, just a high level discussion where Regus, with its 20-year experience in the sector, shared their insight and gave advice. There was no confidential information given or used by Regus to its commercial advantage.”

Reporters will recognise the type of wording in the denial as commonplace in such scenarios. The risk, however, is that such a denial means that the person making the allegation is a liar.

The reporter succeeded in writing a balanced report which has not triggered a libel claim against the FT itself – the article having been “crawled over by their lawyers,” according to submitted evidence.

However, Sir Stelios alleges the denial bears the defamatory meaning that he deliberately lied to the newspaper by making a series of wholly unfounded allegations that the defendants had taken unfair commercial advantage of confidential information which he had provided at a meeting. The court has already agreed that the words are capable of meaning that Sir Stelios lied.

The claim is being defended on the basis of justification and ‘reply-to-attack’ qualified privilege, with a costly trial expected to last 5 to 10 days.

Besides filing a defence, the defendants applied to strike out the claim as being an ‘abuse of process,’ broadly on the basis that it is not worth the candle. The defamatory statements were made to just one person (the reporter) and a trial would not yield any tangible advantage compared with the disadvantages of substantial legal costs and use of court time and resources.

However, the judge, Mrs Justice Sharp, said the statements were capable of bearing a very serious defamatory meaning: dishonesty. Moreover, they were made to a journalist for him to pass on to the FT’s readers.

She noted Sir Stelios believes that he has been branded a liar in an attack on his honesty and integrity, and the fact that the statements were made to a journalist at “the leading newspaper in the financial and business world” makes the matter immeasurably worse.

The defendants have said they did not intend to accuse Sir Stelios of dishonesty and would have been willing to acknowledge that publicly, if requested.

Nevertheless, the judge refused to strike out the claim, saying it was possible Sir Stelios might be awarded “substantial” damages at trial. She has, however, stayed the case for a short period to allow time for the parties to try to negotiate a settlement.

The case is a remarkable example of how publishing denials – such as “it’s completely unfounded” – carries a libel risk because of the defamatory meaning such denials can bear.

The risk affects those that provide denials for quotation by reporters, but it also affects the media. A news organisation’s subsequent publication of denials to the world at large could just as easily attract a libel claim against the reporter, editor and publisher.

Defences of justification and qualified privilege may be arguable, but they are unlikely to gain traction until trial, by which time substantial costs – unlikely to be fully recoverable even if a Defence succeeds – will have been incurred.

In reporting claims and denials, the media are often caught uncomfortably in the middle. It is perhaps fortunate that few claimants spot, or utilise, the potential ‘liar’ meaning when their allegations are denied.

No doubt the FT is counting its blessings, and congratulating its reporter and lawyers for keeping the parties happy on this one.