Confidential
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Summary
Where
they lied, why we are appealing, and what the funds are
needed for
ON April 11, 2000 I lost -- catastrophically -- the
historic libel action I had
been forced to bring against Deborah Lipstadt and
her UK publisher Penguin Books Ltd. The action had lasted
three exhausting months. In the oak paneled courtroom No.
14 of the High Court building, packed with 200
journalists from around the world (and including the
presence of the Israeli ambassador to London, flanked by
armed bodyguards), the judge, Sir Charles Gray
issued a judgment
of 333 pages which was unparalleled in the degree of
venom that it leveled against me.
The defendants under English law are entitled to
recover their costs from me. On this occasion however
their costs had been so high, estimated at around six
million dollars, that I was able to withstand their
application for an immediate order that I pay the full
costs, stated at the close of the hearing by Lipstadt's
triumphant defence team. To their disquiet, Gray allowed
my request that there should follow a separate hearing on
costs.
The hearing
on costs took place on May 5, 2000. No court
reporters were present, but microphones carried the words
of the defendants and of my counsel -- newly hired for
this purpose -- to a tape recorder. The same judge
presided: Gray made plain that Lipstadt was unlikely to
be awarded any of her costs (she was not in fact asking
for them); it had been widely reported
in the press that outsiders (primarily Jewish
billionaires) had picked up her tab, including her lavish
London hotel expenses, and that her law firm (Mishcon de
Reya, a well known Jewish firm) had acted for her
free.
My counsel, Adrian Davies (who is a dedicated
supporter of Real History) argued that
(a) the costs were disproportionate: under
new Rules, all costs have to bear a proper
relationship to the amount claimed. I had privately
offered to drop
Penguin from the action if they paid £500 to a
charity for the limbless in memory of my disabled
daughter, who had lost both her legs three years
before. The amount at stake was therefore £500,
and Penguin could not spend six million dollars
defending it. Gray disagreed, though he did agree that
Penguin's payments
to the expert witnesses were obscenely high and he
was clearly not going to allow all of them.
Davies also submitted that
(b) Penguin had not directly paid the costs
themselves anyway, and were thus not entitled to
recover them any more than was Lipstadt herself.
The day's remaining argument dwelt on this point.
Penguin's counsel, Miss Heather Rogers, of course
stoutly denied that Penguin had not paid the bills
themselves. Davies asked to see the actual cheques
(checks) made in payment. The judge did not want to
adjourn for that, and he was saved by Miss Rogers, who
soon formally gave a categorical assurance, on
instructions from her clients, that Penguin had paid the
bills themselves.
Relieved, Gray accepted this assurance -- barristers
never lie -- and ended the hearing by ordering me to pay
£150,000 on account of a bill to be "taxed"
(properly drawn up and reviewed by the Court) at some
time in the future.
We were furious at this order. Penguin had themselves
told the press (The
Bookseller) that others had paid their bills. The
article was before the Court, exhibited to my own sworn
affidavit. But now they were denying it.
I could not pay this sum.
One month earlier, in April, 2000, Gray had denied
leave to appeal his judgment. We applied
to the Court of Appeal, which refused
permission to appeal, after a five-day hearing in June
2001.
Claiming their "pound of flesh," Penguin Books Ltd
(part of the six-billion pound Pearson Group)
issued a petition in bankruptcy against me for the
£150,000. Refusing to hear any defense arguments,
the Registrar granted the petition in a three-minute
hearing on March 4, 2002.
On Counsel's
advice I appealed. Again we argued that Penguin had
not themselves paid their legal costs, so the order
should not have been made. The appeal was heard on May 21
this year (2002) by Mr Justice Peter Smith, a judge
noticeably more favourably inclined to me than Sir
Charles Gray or the three judges of the Court of
Appeal.
His judgment again
found against me; I was not myself present (I was locked
into a lecture tour on the Pacific North West coast of
the USA) but Counsel Adrian Davies reported
to me that evening, May 21, and later, that at his
request the Judge had taken one unusual step -- he had
ordered the lawyers acting for Penguin Books Ltd (the
highly respected firm of Davenport Lyons) to swear, on
penalty of perjury, an affidavit coming clean ("belling
the cat," he said) on the thorny issue of who had
actually paid their bills.
This suggestion, reported Davies, "caused the huge
Penguin team evident consternation." The judge had
inadvertently knocked over a wasps' nest. Davenport Lyons
first offered a draft witness statement (affidavit) of
two paragraphs, which still ducked answering the actual
question. Davies said that if they did not come clean he
would ask for their senior partner to be put in the
witness box for him to cross-examine. They then very
reluctantly wrote a third sentence:
"3. In practice, the VAT exclusive sums in
relation to bills was (sic) transferred directly to my
firm by Penguin's insurers, and the VAT element of
such bills was paid by Penguin."
There it was: Penguins had not paid any of the bills,
and they had at no time been exposed to this liability.
(The Value Added Tax was reclaimed by them from the
government). Commercial Union, their insurers, are not a
hole-in-corner operation, but one of Britain's biggest
companies. In practice, at an early stage in the
litigation Penguin will have asked their insurers for a
go-ahead, in the absence of which they would settle my
claim out of court; the insurers will have studied the
files, taken Counsel's opinion, and sent them a written
go-ahead in this form: "You defend the action, and we
will meet all the legal costs and any damages awarded."
That is the way it goes.
In my similar libel action against Guardian Newspapers
I was in court before when their lawyer actually came
rushing in and told Master Trench, "We have just
this morning received the written go-ahead from our
insurers, so we shall be defending the action."
At the time of the hearing before Peter Smith J, May
21 this year, my Counsel Davies did not have at hand a
transcript of the hearing two years earlier, where
Penguin had lied to Judge Gray, insisting through Counsel
that they had themselves paid the bills. We have only
recently had this transcript
made.
Peter Smith J denied my appeal, and on May 23, two
days later, my London home -- where I had lived for 34
years -- was brutally seized and Benté and
Jessica were put out on the street. Driving down
through the Giant Redwood forests in California that day,
I was helpless to intervene. My papers, files, equipment,
books etc were all seized at the same time and trucked
away in three removal trucks. (Fortunately I had salvaged
months in advance of this all the archival materials
needed to complete the third volume of Churchill's
War.)
I did not take this result lying down. I instructed my
lawyers, Amhurst, Brown, Colombotti, now to commission
the transcript of the May 5, 2000 costs hearing before
Judge Gray, so that we could expose Penguin's lies: If
the transcript showed that they obtained the order
against me by misrepresentations, we could overturn the
original order.
Life is full of unexpected reverses however. My
lawyers are under serious strain, as a young man who had
plausibly represented to them that he would meet the
entire costs of $50,000 up to that point has very
recently turned out to be a fraud. But they are a
reputable law firm, and they are willing to see this
through to the end; we have now obtained the full
transcripts of both Smith J's judgment
of May 21 this year and the disputed costs hearing two
years ago before Sir Charles Gray.
The latter transcript
(which is posted here for the first time) is still very
fragmentary, but we are working on the tapes to fill in
the gaps. The crucial passages are already clear enough.
They show that Gray J was clearly worried at the prospect
that it might turn out that Penguin's costs had been paid
by insurers or some other third party, and that this
would influence his judgment. He had this to say to
Adrian Davies, my Counsel:
MR JUSTICE GRAY: Yes,
I think you are, if I may say so, and I think all your
submissions, perhaps glossing over what I believe to
be the fundamental distinction between the case where,
if you like, the bills are going direct to some third
party. In other words the litigant is not even
receiving the bill, and cases where the party being
billed by the expert or whoever it may be is the
litigating party, and the litigating then pays, but
then may be is indemnified by an insurer or by a
parent, or by some other corporate entity. And I think
that the authorities show that that is the crucial
distinction.
No wonder Penguin's lawyers were in "consternation" at
Mr Justice Peter Smith's shrewd order on May 21 this year
that they swear the affidavit. No wonder they fought
tooth and nail even then not to include paragraph 3,
until Davies threatened to put them on the witness
stand.
When our ducks are all in a row, as one of our lawyers
put it, i.e., within a very short time, we are going back
into court, before a Lord Justice of appeal, to ask that
he reverse Gray's original order. We expect to make the
application before the end of this month.
If we win that one short round -- it will take less
than half a day in court -- it will result in a
catastrophe for the enemy.
- The Sir Charles Gray order (£150,000) will be
reversed.
- The bankruptcy order will then automatically be
annulled; all my property will have to be restored to
me.
- The petitioners (Penguin and others) will face an
order to pay my entire costs.
- The petitioners will have exposed themselves to a
massive further claim for damages for malicious
petitioning, a very serious offence in English
law.
My own loyal but long suffering lawyers, Amhurst,
Brown, Colombotti, have very rightly asked for cash from
me up front, before the rest of this fight is fought. I
have to pay immediately for the perfecting of the
transcripts. Counsel Adrian Davies also has to be paid to
review and flesh out the "inaudible" gaps. Then we march
back into the Court of Appeal. The total amount needed to
complete this final round is about ten to twelve thousand
pounds.
My own assets, remember, have been seized.
We are already running up against one problem:
technically, we are out of time: we should have appealed
Smith J's order within 14 days, but in Counsel's view we
now have good grounds for the delay.
I do not have to emphasize to you that all of the
above, and the content of the documents in this dossier,
is strictly confidential, indeed some of it is legally
privileged; and should not be shown to others without my
express permission. It is posted here purely for the
purposes of facilitating this litigation.
To make a
substantial one-time contribution to this last battle, go
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or send an email pledging support 
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The total sum necessary is around £15,000 ($25,000);
much has already been paid by our Fund, thanks to
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