McDonald's Left To Chew Over 10 Million Legal Bill


Scotsman; 20th Jun 1997

McDONALD'S, the world's biggest hamburger chain, left the High Court in London yesterday with a 60,000 damages award it can never collect and an outstanding legal bill estimated at 10 million.

At the end of the longest trial in British history, Mr Justice Bell ruled that the corporation had been defamed by two "penniless" activists, who circulated a leaflet attacking the company in the late 1980s.

But Dave Morris, 43, and Helen Steel, 31, claimed they were the real victors of the 314-day trial, which vastly increased the circulation of their anti-McDonald's views.

Last year, the pair set up an Internet site called McSpotlight which allowed people around the world to access the proceedings of the trial.

While the judge ruled against the activists on most points and awarded damages against them, the case was being seen as a landmark libel ruling.

Representing themselves against the $30 billion (18 billion) corporation, the "McLibel Two" won favourable rulings in two of the seven key points of dispute in the leaflet, What's Wrong With McDonald's?

McDonald's was found "culpably responsible" for cruelty to animals for restricting the movement to laying hens and broiler chickens.

The judge also ruled that the corporation exploited children in its advertising to encourage them to pressure their parents into visiting McDonald's.

McDonald's had made it clear from the start that it did not expect to recover any substantial damages or its huge legal costs.

It was concerned to stop the campaign against it and vindicate its reputation. "In terms of what McDonald's set out to achieve, they have achieved nothing," said Keir Starmer, a barrister who advised the activists on points of law.

"It is the hardest 60,000 McDonald's ever won and one of the lowest libel awards ordered by the courts in the past ten years," said Mr Starmer.

As soon as the ruling was handed down, the pair were handing out the same pamphlet that prompted the libel action, shouting: "Judge for yourselves, read the leaflets. We will not be silenced."

Mr Morris also pledged to take his fight to the European Court of Human Rights to challenge Britain's "oppressive" libel laws.

The campaigning barrister Michael Mansfield, QC, said the outcome represented a major victory for Ms Steel and Mr Morris.

"The British public owe a debt of gratitude to these two people. They have dared to tread where no others have dared to tread, where those with resources have not dared to go, to raise issues that matter to us all."

The judge had said McDonald's was entitled to compensation for damage to its trading reputation and goodwill and to vindicate its good name.

But Mr Justice Bell, whose whole career at the High Court has so far been taken up by the case, did not grant an injunction forbidding further publication of the leaflet.

He said that any further orders, including legal costs, would be dealt with at a later date.

Paul Preston, the chairman and chief executive officer of McDonald's Restaurants Ltd (UK), welcomed the judgment. He said the company is "broadly satisfied with the judgment.

"For the sake of our employees and our customers we wanted to show these serious allegations to be false and I am pleased that we have done so."

Mr Justice Bell took more than two hours to read out a 45-page summary of his three-volume, 800-page judgment, which had taken him six months to prepare.

The risk of food poisoning from eating McDonald's products was minimal, said the judge, and the allegation that customers were exposed to residues of antibiotic drugs, growth promoting hormones and pesticides was not true.

On other health aspects of McDonald's food, he said the leaflet said it was high in fat, sugar, animal products and salt and low in fibre, vitamins and minerals.

The risk of heart disease, he said, was only true in relation to customers who ate there several times a week over a period of years. The risk of bowel cancer might be increased to some extent but there was no evidence in relation to breast cancer.

On employment practices, the judge said McDonald's restaurants did pay its workers low wages, thereby helping to depress wages in the catering trade in Britain.

But it was not true that the company was only interested in recruiting cheap labour and that it exploited disadvantaged groups, particularly women and black people.

It was true that sometimes crew members were sent home early and not paid for the remainder of their shift if the outlet was quiet.

"This practice is most unfair as it deprives crew, mostly young, of pay for time which they have set aside to earn money at McDonald's," said the judge. It did not happen often, but it should not happen at all, he said. But conditions of work, other than pay, were not generally "bad", he said. "The success of the restaurants has relied on smart, cheerful staff providing brisk service and it seems to me that it is inherently difficult to achieve this unless crew are reasonably happy at their work," he said.

With a vast public relations budget at its disposal, the corporation might have better countered the activist's allegations through advertising. When the National Lottery came under fire, Camelot mounted a successful media campaign. But the corporation chose to resort to the courts because the leaflet contained "a wholesale attack on almost every aspect of McDonald's business," Richard Rampton, QC, told the courts.

The company had to defend its reputation for "uniform excellence" in the quality of its products, the well-being of its customers, the welfare of employees - including equal opportunities for women and ethnic minorities - and respect for people and the environment.

Before the trial McDonald's issued a leaflet of its own saying: "This action is not about freedom of speech; it is about the right to stop people telling lies." This led Mr Morris and Ms Steel to counter-claim for libel. But the judge dismissed their claim.

McDonald's has acknowledged that it will never be able to claim its costs or damages from the "unwaged" pair whose whole lives for the past three years have been taken up studying law and preparing for each day's hearing without the aid of a legal team.

Because legal aid is not available for fighting libel cases, the pair mounted their own defence in a case which has already been described by Mr Mansfield as "the trial of the century".

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