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Squire Sanders settles libel claim over letter before action

Squire Sanders has settled a libel claim against the firm over the contents of a letter before action (LBA) after a judge rejected its application to have the claim struck out, finding that the LBA could be interpreted as meaning the recipient was guilty.

The top 20 firm was sued for libel by Patrick Hodgins, a former director of Squire Sanders’ client Solym Holdings and subsidiary Solym Carriers, after it sent Hodgins a LBA in January, copied to his new employers, notifying him that Solym were bringing an action for breach of his fiduciary duties, including the duty not to accept benefits from third parties.

In June, the 1257-lawyer transatlantic firm – represented by James Price QC of 5 Raymond Building – made an application to strike out the libel action under the Civil Procedure Rules practice direction 53, claiming that the words complained of in the libel action were ‘incapable of bearing the meaning pleaded in the claim’.

In a hearing in the Royal Courts of Justice before Mrs Justice Sharp, Price QC argued on behalf of Squire Sanders that the letter alleged Hodgins guilt but could not on any reasonable interpretation be taken as asserting that he was as a matter of fact guilty of the allegations.

However, arguing on behalf of Hodgins, Andrew Caldecott QC of One Brick Court, instructed by Reed Smith, claimed that the letter conveyed the impression that Hodgins was guilty and Mrs Justice Sharp, summarising his position in her judgment in August on the application to strike out, said that ‘the letter does not suggest the putative claimants merely suspect the malpractice alleged, still less that they are raising questions to be answered in order to establish whether it happened or not. It is an outright assertion that it did happen, and this will found the basis of the threatened claim.’

Caldecott QC also drew attention to the fact that the email was not marked ‘private’ or ‘confidential’; that ‘there could be no possible purpose in copying the letter to the claimant’s employer and the Danaos board unless it were to suggest that the claimant was guilty of the malpractice alleged, and was unfit to be employed; and that the email was given weight by the fact it was from a partner in a ‘well-established’ firm.

Mrs Justice Sharp agreed that the LBA could be interpreted as meaning Hodgins was guilty, denying Squire Sanders’ application to strike out the claim.

A spokesperson for the firm confirmed that the claim was settled in the last month but declined to comment further.