It was shaping up to be one of the biggest defamation trials in American history, but at the eleventh hour, Fox News and Dominion Voting Systems reached a settlement, with the former agreeing to pay the latter US$787.5 million ($1.2 billion).

Dominion had sued the media giant over its coverage of the US presidential election in late 2020, in which various hosts of Fox News shows promoted falsehoods and conspiracy theories about voting machines helping steal the election away from now-former president Donald Trump.

The company was seeking US$1.6 billion from Fox as a result of the claims being made on air.

In a statement, Fox noted it was pleased to have settled the dispute with Dominion.

“We acknowledge the court’s rulings finding certain claims about Dominion to be false,” it said.

“We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”

In a press conference, Dominion chief executive John Poulos said: “Fox has admitted to telling lies about Dominion that caused enormous damage … nothing can ever make up for that.”

VIEW ALL

A lawyer for Dominion, Justin Nelson, added that “the truth matters” and that “lies have consequences”.

“Today’s settlement … represents vindication and accountability,” he said.

Mr Nelson added a warning: “Misinformation may not go away, it may only get worse. This litigation cannot solve all problems — all of us remain ever vigilant to find common factual ground.”

‘Rupert’s waterloo’

Reflecting on the settlement, Company (Giles) principal Patrick George mused that the amount of money to be paid to Dominion was too good for the voting systems company to refuse, and for Fox, he said, “this should be seen as Rupert’s waterloo”.

Mark O’Brien Legal founder and director Mark O’Brien called the settlement payout “stratospheric”.

“No matter how it is dressed up, a payment of $1.2 billion would lead the ordinary person in the street to think this was a crushing defeat for Fox. It is the highest known payout for defamation in US history,” Mr George outlined.

“It is likely to lead ordinary persons to think that any reputation Fox had for honest and responsible journalism is irretrievably lost.”

According to Hall & Wilcox special counsel Hamish McNair, the fact that a settlement was reached in this case “illustrates just how far Fox knowingly strayed beyond the truth, with significant commercial consequences for Dominion supporting a massive claim for damages”.

Differences between Australia and the US

However, O’Brien Criminal & Civil Solicitors senior associate Stewart O’Connell argued, “there has never (and will never) be a settlement in Australia that comes close” to the amount agreed to in the Fox-Dominion dispute.

In fact, he pointed out, Dominion wouldn’t have even been able to pursue defamation action in Australia, as s9 of the Defamation Act precludes a for-profit company or a company with over 10 employees from suing in defamation.

“And even if they could, the cap on defamation damages in Australia means that no one thinks in such extraordinary numbers,” he said.

In Australia, Mr George said, proceedings can instead be brought for injurious falsehood, where “it would need to prove the material was false, Fox knew it was false, and Dominion suffered financial loss”.

Injurious falsehood — in which plaintiffs need to establish falsity, malice and actual harm — is “a potentially significant weapon for plaintiff companies in these extreme scenarios”, Mr McNair said, especially given that such claims have a limitation period of six years, rather than one year for defamation actions.

Why settle?

Mr O’Connell outlined that the main difference between defamation laws in Australia and the United States is that, in the US, the plaintiff has to prove that the defamatory material was false and that it was published with actual malice or a reckless disregard for the truth, whereas in Australia, it is the defendant who has to prove that what they wrote was true and that that they acted reasonably.

“The bar is much higher in the US,” he said.

The reason Fox would have settled, Mr O’Connell suggested, is that the company “would have known that Dominion was likely going to satisfy that high bar, that the publicity around a losing trial would significantly damage the Fox brand and the high-profile people associated with that brand who would have had to give evidence, that a court would likely have ordered an even higher amount in damages, and that they would also incur a huge amount in legal fees”.

These reasons for settling, he continued, are not dissimilar in Australia, and it is also not unusual for settlement to take place just before trial.

“It is at that time that most of the arguments, defences, issues, and evidence are known, and all the bluffs have been exhausted. The stakes are always high, and it is at this time that the parties are forced to make a choice, risk having a court make an adverse finding against you, incur huge legal fees, and risk being ordered to pay a significant sum, or find a resolution,” he explained.

“It may not look like it, given the huge amount of the settlement, but I have little doubt that Fox made a sensible decision.”

Moving forward

Looking ahead, Mr McNair noted that if, as a publisher, “you are making false statements about a person or product which you know to be false, or you are making recklessly or for an ulterior purpose, then this case should serve as a salient warning”.

Fortunately, he said, “persons and companies conducting themselves in this way in Australia are exceedingly rare”.

Fox is still facing defamation proceedings from US voting technology company Smartmatic, which is seeking $2.7 billion from the media giant.

Judge Eric Davis, for his part, praised the two defence teams that acted for Fox and Dominion for their efforts leading up to the now-aborted trial.

“I’ve been on the bench since 2010, and I think this is the best lawyering I’ve had, ever,” His Honour mused.

“I just want to say, I would be proud to be your judge in the future.”