DAVID AND GOLIATH 315-DAY LIBEL CASE LEAVES BURGER GIANT TAINTED.

By John Vidal and Alex Bellos.

After a 315-day trial, estimated to have cost McDonald's £10m, Mr Justice Bell ruled that the United States corporation and its British subsidiary had been libelled by most of the allegations in a six-page leaflet first distributed more than 10 years ago. He awarded the company damages of £60,000 against the two defendants, Helen Steel and Dave Morris.

But in a judgment that may haunt the British fast food industry, the judge ruled that the leaflet was truthful when it accused McDonald's of paying low wages to its workers, being responsible for cruelty to some animals and exploiting children in its advertising campaigns.

In an epic David and Goliath battle spread over three years, McDonald's sued Mr Morris, a former postman aged 43, and Ms Steel, a former gardener aged 31, over a long-running campaign by a small anarchist group. The campaign accused the burger giant of, among other things, poisoning its customers, cutting down rainforests, exploiting Third World countries and employing cheap labour.

Both sides claimed victory yeaterday. Paul Preston, the president of McDonald's UK, said that the company had been completely vindicated, while Mr Morris said: "The court of public opinion is much more important that a High Court ruling."

Mr Morris said the activists would take their fight to the European Court of Human Rights, to challenge Britain's "oppressive" libel laws. They had lost the case on a "technicality", he said.

There were immediate calls for McDonald's to review the way it targets young children with a $2bn-a-year marketing budget, and to cease selling chickens that have been cruelly treated. A spokesman for the company said it would consider its position over the next few days.

Mr Justice Bell took more than two hours to read out a 45-page summary of his 800-page judgment. He rejected a counter-claim for damages by Mr Morris and Ms Steel who alleged that they had been libelled by McDonald's in the burger giant's reply to their allegations.

McDonald's said yesterday it would not seek costs or pursue the two activists to the point of bankruptcy.

But in an act of defiance the pair immediately handed out the same pamphlet to crowds outside the law courts, shouting: "Judge for yourselves, read the leaflets. We will not be silenced."

The epic courtroom drama has already been covered in a book and television series and has its own Internet site - which has been accessed by 12m people - where the leaflet has pride of place.

FEW NUGGETS AND
VERY SMALL FRIES.

NOT SINCE Pyrrhus has a victor emerged so bedraggled. True, the fast-food giant McDonald's was declared the official winner at the conclusion yesterday of the longest trial in English legal history. True, the judge concluded that the company had been libelled by the "What's wrong with McDonald's" leaflet distributed by environment activists outside its British burger stores. True, the two defendants, Dave Morris, a former postman and Helen Steel, a former gardener, were ordered to pay £60,000 in damages.

But consider the cost of this pyrrhic victory. Firstly, the judge upheld several important charges made by the campaigners against the company, including cruelty to animals used in its food products and exploiting children in its advertising campaigns. Then there was the criticism of the company's misleading publicity involving the recycled content of its packaging and false nutritional claims for a food that was high in saturated fat and salt. But much more serious was the wide support which the McLibel Two received from the world's media in this epic battle between "the small fries and the burger giant". There is even a site on the Internet - McSpotlight - setting out all 20,000 pages of the transcript of the hearings. Then there are the lawyers' fees facing McDonald's: a cool £10m.

Publicly, McDonald's, which has a notoriously unhealthy litigious appetite, has remained tight-lipped over its pursuit of two unemployed green campaigners with no assets, but someone somewhere in its empire must be asking some awkward questions. As PR fiascos go, this action takes the prize for ill-judged and disproportionate response to public criticism.

If McDonald's wants to waste £10m on a legal suit, that is their affair. But the trial raises important issues of public concern. There is no legal aid for libel so there were no defence costs - the two defendants represented themselves. But the trial tied up a high court - plus its ushers and administrators - for 313 days of hearings spread over two and a half years at a cost of well over £1,000 a day. Here is a classic case to support Lord Woolf's call for the reform of our civil justice system.

His report last year documented the delays, uncertainty over length of hearings, and the obscene rise in legal costs of civil justice. Woolf wanted to divert more cases - medical negligence, personal injury, housing - away from the courts. He wanted alternative ways of resolving disputes, like arbitration, mediation and conciliation. And he wanted much tougher judicial control over cases which went to trial. There was a new Defamation Act last year which is still not implemented in full - and which still falls far short of what is needed. But judges do not need an act to apply firmer control over trials. Even where the accused are defending themselves, they need to set firmer timetables and stricter limits on cross examination.

EMPIRE OF BURGERS.

Helen Steel and Dave Morris, their critics who emerged yesterday after a mammoth court battle, have a combined annual turnover equivalent to about $12,000. This puts them near the financial basement in Europe and on a par with the average wage of an Indian or a Ugandan.

The questions rear up: what was the point of dragging two penniless people without proper access to the law through the libel courts? Was not a company with unimaginable wealth, and well able to command the best legal expertise, bound to have real advantage? Did McDonald's deliberately take advantage of the British libel laws? How can a company which spends $2,000m a year advertising itself be damaged by a few people handing out a few thousand leaflets?

If national and local government cannot be libelled because they are considered by the courts well able to withstand criticism by the public, is there not a massive case now to reform the British libel laws? For a start, should not Parliament consider putting corporations into another legal bracket? Libel has clearly become a game for the rich to play. As such, ordinary citizens now find it perilous to criticise the powerful. Should not legal aid for defamation cases be available in certain circumstances?

Elsewhere they do libel and defamation better. Most of the contents of the offending London Greenpeace leaflet would never even have made it to the American courts. There, companies and public figures must show that the critic knew that was being said was false before they can get to the courts. The long-suffering, monumentally patient Mr Justice Bell, eagerly preparing for life after McLibel, has hinted as much that others should take up the case for reform.

In short, the McLibel trial has made great theatre but a mockery of good sense. It is not surprising to find both sides yesterday claiming victory for diffrent reasons.

Despite claims of total vindication, McDonald's must be devastated. Two-and-a-half significant areas of the case went almost completely to their untutored, unprepared and unresourced critics. The areas where the corporation took a battering - cruelty to (some) animals, expolitation of children via advertising, and low pay - go to the heart of its business. It may have won the majority of the legal points, but the stains on the nature of its business will not go away. There are already calls for a company enquiry into how it treats animals, and the next generation of humans. But the case raises other issues that pass well beyond the remit of the British courts and are much more to do with democracy, corporate accountability and the right to criticise the powerful.

McDonald's is no different from many other corporations in that it has grown exponentially in the past decade with worldwide deregulation of industries, the rise of globalism and the fall of Communism. But where once size had a point, even a limit, it is tempting now to see the corporate world becoming self-referring, culturally out of contact with ordinary people and close to a point where the civil society should be deeply concerned.

New figures emerged yesterday from the New Economics Foundation. The world's top 500 companies, it seems, employ 0.05% of the world's population but control a quarter of the world's economic output. The combined assets of the 50 biggest companies is now 60% of the world's $20 trillion of productive capital. In eight sectors, including cars, aerospace, electronics, steel, armaments and media, the top five corporations now control 50% of the global market. Increasingly the question is: who governs them? And for whom?

This power is no longer merely financial, but also cultural. It is beginning to dictate the fundamentals of life. Ten corporations now control nearly every aspect of the world's food chain. Four control 90% of the world's exports of corn, wheat, tobacco, tea, pineapple, jute and forest products.

McDonald's is a tiddler compared to General Motors, which is financially four times its size. Neverthless one in 10 people in the US get their first job with the company; more people recognise the Arches than the Cross; the company has taken over from the US Army as the West's largest staff trainer; it is the world's largest single buyer of potatoes, beef and chicken. The world has changed immensely in the decade since Steel and Morris started grappling with McDonald's, and it has been uniquely to the corporations' advantage. The motor of global and national politics is now almost exclusively driven by corporate financial priorities.

Effectively corporations now set the agenda for the EU, Nafta, the World Trade Organisation and the Asian "tiger" economies. Their executives fill the advisory committees of the global bodies which sit in secret; they advise the national politicians; they unsparingly lobby the parliamentarians and the policy makers and have easy access to every level of government; and, with next to no social remit, they set an agenda designed purely to maximise the financial returns of the few and to outmanoeuvre the myriad (though increasingly organised and virulent) citizen groups which press for social accountability, monitoring and clear codes of conduct.

IT IS not sleaze in the sense of brown-paper envelopes; but corporate affairs are today fabulously cosy, untransparent and in many cases exist right on the limits of what societies consider ethical. Steel and Morris have risked all to confront one of the most powerful corporations on earth and have done what no other well-resourced group or non-governmental group was prepared to do.

McLibel the trial resembled nothing more than a bizarre public enquiry into a corporation whose sense of broader social responsibility was honed to self-advancement in many areas. The company executives who paraded through the courtroom above all suggested that what was good for McDonald's was good for everyone. There was little or no comprehension that quite legal activities might be unacceptable to the public or even a libel court. It was an extraordinary snapshot of corporate faith and fealty in the 1990s; of how we live today, and how corporations treat people, animals and nature.

It is unimaginable that any company will be so arrogant or so stupid to go through the same experience again. It is equally unimaginable that Steel and Morris, having invested so much of their life in the case, will let it end here. When Paul Preston, the UK president of McDonald's, said just before the trial began that being with McDonald's "isn't a job, it's a life", they began to understand what he meant. We should thank them, warmly.

John Vidal, the Guardian's environment editor,
is author of McLibel (Macmillan, £15.99).