Lachlan Murdoch could well have won his Crikey lawsuit, so why did he drop it?

Late last week, Lachlan Murdoch dropped his defamation claim against key figures behind online publication Crikey.

Murdoch had a strong case. So why would he choose to drop it?

Read more: Why Fox News’ settlement with Dominion Voting Systems is good news for all media outlets

The facts of the case

For those under a rock: Lachlan Murdoch is Rupert’s son. He is an Aussie-American-Brit leading News Corp and Fox Corporation. His empire includes Fox News in the US and Sky News in Australia.

Murdoch complained about June 2022 article about the January 6 uprising in the Capitol. The piece called Donald Trump a “traitor” and Lachlan Murdoch Trump’s “unindicted co-conspirator” — a reference to The treatment of Richard Nixon by a grand jury regarding the Watergate scandal.

The underlying claim was that Fox News Trumps “Big liethat the 2020 US presidential election was stolen, leading to the uprising; and that Lachlan Murdoch was responsible for Fox’s role in spreading the Big Lie.

After the article was published, Murdoch sent Crikey’s publishers a “Notice of Concern”, essentially threatening to sue them.

In response, the publishers Murdoch almost dared to sue. They even went so far as to place an ad in The New York Times. According to Murdochthose behind Crikey used his defamation threat as part of a marketing campaign to boost subscriptions.

Challenging a billionaire to a libel fight may not have been the smartest move. In September 2022 Murdoch procedure started at the Federal Court of Australia. He sued Crikey’s corporate publisher, the editor and author of the article. Later he too sued the chairman and chief executive of that company.

Crikey’s defense may have failed

The Crikey respondents defended the case on a number of points. Each of these defenses is based on legal principles that justify the publication of defamatory content for other important interests.

Perhaps their strongest defense was a new one: a legal defense of “publication of matters of public interest”. The defense became law in 2021. It means that a defamatory publication is defensible if two conditions are met.

First, the publication must address a “matter of public interest” – which the Crikey article clearly did. Second, the publishers must have “reasonably believed” that the publication of the matter (the article) was in the public interest.

The case may relate to this second element of the new defense. What did the publishers believe? Was their belief about the public good, or about driving subscriptions to Crikey? There was quite a risk that a court would have gone for the second option and the defense would have failed.

If the defense had failed, Murdoch would have won. So why would he choose it stop his case?

The background to the Dominion v Fox case

Just days ago, Murdoch’s Fox arranged what one of the greatest libel case of all time. Dominion Voting Systems had sued Fox in the US and demanded damages of no less than $ 1.6 billion.

It is extremely difficult to succeed in a libel suit against a media company under US law. But if ever there was a case where it could happen, this was it.

Through pre-trial procedures, Dominion had uncovered a wealth of evidence from people at Fox, including Tucker Carlson And Rupert Murdoch himself.

There was enough ammunition for Dominion to claim that Fox was deliberately spreading lies about Dominion, which would have been necessary for Dominion to succeed.

Just before the trial was to begin, Dominion agreed to end the case in exchange for a Payment of $787.5 million from Fox.

This was a high price for Fox to pay, but a loss would have cost significantly more in damages. And it would have cost more than money.

Had the case gone to trial, it would have done massive damage to the Fox brand and that of its talking heads, further alienating the audience they depend on. The evidence already discovered was ugly, but it was about to get even uglier.

Dropping the defamation case was a good decision

If Lachlan Murdoch continued the Crikey case, all the dirty laundry to be aired in the Dominion case could have been aired in Australia.

According to the principle of open justicethat evidence would have been heard in a public courtroom, under the watchful eye of the global media.

Fox’s main advantage of the Dominion settlement – making the story disappear and not having to uncover further evidence – would have been destroyed. It would have been a huge own goal.

It is likely that Lachlan Murdoch would have been cross-examined himself.

There are other reasons why Murdoch would want the case closed now

Suppose the case went ahead and Lachlan Murdoch won. This would mean that the Crikey respondents have failed in their appeal to the legal defense of “publication of matters in the public interest”.

The resulting ruling could set a precedent and undermine the value of the new defense.

It is ultimately in Lachlan Murdoch’s best interest that the defense remains strong: it will protect News Corp’s rags from publishing defamatory articles, to which they are prone. By laying down his arms now, that scenario is avoided.

And there’s a reason Lachlan Murdoch has himself given for ending his case: he no longer wants to give Crikey ammunition for a marketing campaign to attract subscribers.

Murdoch insists he was confident he would have won his case. He may have won damages for libel, but he could have lost a lot more.

Murdoch will ultimately have to pay the Crikey Respondents’ legal fees. But this case was never really about money. As the judge said a few weeks ago, it was more about “ego and overconfidence”. That’s a lot of libel cases.

Read more: Murdoch v Crikey highlights how Australia’s defamation laws protect the rich and powerful