‘Doom’ is for the unprepared

“Is National Review doomed?” asks Damon Linker (The Week). “It’s doubtful that National Review could survive” losing Michael Mann’s libel lawsuit, or having to settle it out of court. “National Review may be fighting for its life.” The “magazine has now been placed in jeopardy.” (All these quotes, in context, are referring to financial doom and jeopardy.)

But both fear (for those who want to see the National Review thrive) and hope (for those who want to see it fold) are premature, and for reasons that have nothing to do with the merits of Mann’s case or with big-picture First Amendment issues. Rather, the reason, which the article in The Week doesn’t discuss, is libel insurance.

My sense is that most mainstream publications, such as the National Review, have libel insurance. The National Review says it has libel insurance, and I have no reason to doubt it.

To be sure, in theory it’s possible that there will be a damages award beyond the policy limit, but in practice, as I understand it, that is vanishingly rare. And there remain expenses — such as deductibles, and the cost of lawyers above what the insurer is paying. (Many policyholders don’t want to rely on insurer-provided lawyers, but instead hire their own, who can be quite expensive.) The National Review has said as much, estimating the amount at “a couple hundred grand” “[a]nd maybe more.”

Still, talking about “doom,” threat to “surviv[al],” and “fighting for [its] life,” without at all considering the function of insurance in preventing precisely this sort of business threat, strikes me as mistaken here. Say what you will about the merits of the lawsuit, but the National Review‘s financial solvency is quite unlikely to be in jeopardy here, unless their management has been cutting some very foolish corners in its insurance budget.

Many thanks to my lovely insurance-lawyer wife, who among her many other merits has sensitized me to the basic principle of civil litigation: The first thing you should do is think about insurance.

CORRECTION: I originally wrote that the University of North Carolina student newspaper has libel insurance (through the UNC School of Journalism), but I misread the article — the libel policy covers journalism school projects, and the student newspaper is independent; I’ve therefore removed that sentence. This doesn’t affect the rest of the analysis, but I’m sorry about the error. Thanks to Dave Ruddell for pointing this out.

Eugene Volokh teaches free speech law, religious freedom law, church-state relations law, a First Amendment Amicus Brief Clinic, and tort law, at UCLA School of Law, where he has also often taught copyright law, criminal law, and a seminar on firearms regulation policy.

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