Tescos sues the Guardian

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The Telegraph (amongst others) has reported that:

Tesco is to take legal action against the Guardian newspaper and its editor Alan Rusbridger after a series of articles that claimed it avoided paying £1bn in tax by using an offshore structure for property joint ventures.

The claim is, according to Reuters, for libel and malicious falsehood.Tescos said:

We feel driven to take this action because we cannot allow Tesco's reputation to be so seriously attacked with such wilful disregard for the truth.

Tescos have said that:

the Guardian knowingly misled its readers in a series of articles and a podcast published on Feb. 27 and Feb. 28 by wrongly alleging that Tesco had contrived a tax avoidance structure.

The Guardian has said:

Tesco's actions amounted to bullying and were clearly designed to silence public debate on the important issue of taxation.

They continued:

This looks like a deliberate tactic by Britain's largest retailer to shut down perfectly legitimate inquiries into their methods of tax avoidance. At the same time that two Tesco directors are reported to have lobbied the government in private on matters of taxation, the company is now seeking to chill public debate on the same issues. The articles were in the context of a series of articles on taxation issues in a globalised world. They clearly raised serious matters of public interest in relation to tax avoidance and tax management. We have never claimed Tesco behaved illegally. These are matters of considerable political importance at present, debated by all parties.

Guardian journalists put a series of questions to Tesco over a period of nearly four months. At no point during the pre-publication correspondence would Tesco even admit the offshore structures, still less give the explanation they advanced post-publication. We offered meetings to discuss the allegations; this offer was rejected. We included Tesco's explanation in the articles and have subsequently offered the company the opportunity of a full and prominent right of reply.

Instead of frankly explaining their position and/or engaging in a public dialogue Tesco has taken the extraordinary step of suing for libel in a clear attempt to close down the debate and discourage others from looking too closely.

I can only admit surprise at Tescos action: I remain of the opinion that they did avoid corporation tax as well as stamp duty in structuring the transactions as they did, for the reasons that I gave here. And since they have said:

every company seeks to operate as tax-efficiently as possible, to do so is our duty to shareholders and customers alike

Tescos is now in the position of suing someone who has said that they have done what Tescos says it has a duty to do. That's going to make this a very strange libel case.

Disclosure: I am an occasional paid correspondent for the Guardian. As I noted here, I have not seen the Guardian's papers relating to this case.