6.  The first applicant was born in 1953 and lives in Mosfellsbær, the second applicant was born in 1980 and lives in Reykjavík and the third applicant was born in 1980 and lives in Seltjarnarnes. At the material time the first and second applicants were on the editorial board of the newspaper DV and the third applicant was a journalist for DV.
7.  On 30 September 2010, an Icelandic private limited company, (hereafter “the company”), was declared bankrupt. The company was established in 1960 and is one of the leading industrial companies in Iceland in the production of plastic packaging material.
8.  In October 2010 the liquidator of the bankruptcy estate hired an accountancy firm to investigate the company’s accounts.
9.  On 31 January 2011 the accountancy firm finalised a report indicating a suspicion of criminal misconduct by the board members. The chairman of the board, A, who was also one of the owners of the company, was an assistant professor at the University of Iceland at the time.
10.  The liquidator reported the suspected criminal misconduct to the police. A holding company and a bank also reported the company and A to the police.
11.  On 14 March 2011 DV published a picture of A on its front page under the headline “Black report on [the company]: Police investigate Assistant Professor”. An article on the matter was printed on pages 2 and 3. The third applicant was identified as its author. The headline of the article read “Assistant professor entangled in police investigation” and another picture of A appeared beside the headline. The article was based on information from the accountancy firm’s report. It is not known how the applicants knew about the report and its contents. The article discussed inter alia A, who was a board member and one of three owners of the company and the former supervisor of the MBA programme and assistant professor of business studies at the University of Iceland. The article described the company´s situation with reference to the accountancy firm´s report. It stated that the report had concluded the company had paid for the A´s expenditures, which were unlikely to be connected to the company´s operations. The report had also indicated that A and one of his co-owners had known about the grave financial situation of the company long before it had been declared bankrupt in 2010. The report had concluded that the company´s assets had been partly expended when it was clear that it was insolvent. These assets had in fact been transferred to another company, owned by the A´s co-owner.When the company was declared bankrupt on 30 September 2010 the company owed approximately 1,100,000,000 ISK (approx. 7,150,000 euros at the time) to a large bank in Iceland. The amount had increased significantly after the financial crisis in 2008.
12.  On 16 March 2011 A’s lawyer received an email from a police prosecutor confirming that the liquidator’s complaint had been received and was being “examined” and that two other complaints received by the police were also under consideration. He stated that no formal decision had been taken to instigate a police investigation. A’s lawyer sent this email to the first applicant and requested correction of the impugned statements. The first applicant refused his request.
13.  On 28 April 2011 A lodged defamation proceedings against the applicants and DV before the Reykjavík District Court and requested that the statements published by DV, “Police investigate Assistant Professor” and “Assistant Professor entangled in police investigation”, be declared null and void and that the applicants be ordered to pay compensation, including expenses for publishing the final judgment.
14.  The applicants and A were heard and the email of 16 March 2011 from the police prosecutor to A’s lawyer was submitted as evidence.
15.  By a judgment of 5 March 2012 the District Court found that both disputed statements had been defamatory and ordered the applicants to pay 200,000 Icelandic Krónur (ISK) (approximately 1,600 euros (EUR)) to A in compensation for non-pecuniary damage, plus interest, ISK 200,000 for the cost of publishing the judgment and ISK 500,000 (approximately 4,200 EUR) for A’s legal costs before the District Court. The statements were declared null and void.
16.  The judgment contained the following reasons:
“... According to Article 73(1) of the Constitution everybody has the right to freedom of opinion and belief. However, Article 73(3) of the Constitution allows certain restrictions on the freedom of expression. It states that freedom of expression may only be restricted by law in the interests of public order or the security of the State, for the protection of health or morals, or for the protection of the rights or reputation of others, if such restrictions are deemed necessary and in agreement with democratic traditions. In Chapter XXV of the Penal Code, freedom of expression is restricted in the interest of the rights and reputation of others. When deciding the limits of freedom of expression, the possibility of a public debate has to be guaranteed.
[The applicants] claim that the statements are true and refer to the principle that they cannot be held liable for true statements. It is undisputed that, before the newspaper coverage, [the police] had been informed by the liquidator of a reasonable suspicion of criminal acts by the company’s board members, of which A was one. It is also clear that the information given by the liquidator was based on [the accountancy firm’s] report of 31 January 2011. An email of 16 March 2011 from [the prosecutor] to [A’s] lawyer stated that the liquidator’s report was being “examined” [“til skoðunar”]. Furthermore, it was stated that two other entities [had reported, inter alia, A] to the police and that those reports “were also being considered” [litið til framangreindra kæra]. However, it is stated that no formal decision has been taken about a police investigation nor possible criminal acts defined.
[The applicants] base their defence on the fact that nothing in their statements, which [A] wants declared null and void, indicates that a formal decision had been taken to start [a police] investigation and that the wording of the statements should not be interpreted more widely than its general meaning indicates. Here it has to be taken into account that in general the media are required to base coverage on thorough research of the facts. Taking this into account, and having regard to [the absence of a formal decision by the police to investigate] [the company] and its board members, including [A], the court cannot accept [the applicant’s] arguments. No police investigation had been instigated against [A], thus the statements “Police investigate Assistant Professor” and “Assistant professor entangled in police investigation” were factually wrong, but both statements did in fact have the same meaning. It was not unreasonably difficult to verify whether such an investigation had in fact been opened. The wording of the statements was of such a nature as to make the reader believe that [A] was a suspect in a police investigation because of his criminal and punishable acts. This damaged [A’s] reputation. Therefore, the court has to agree with [A] that [the applicants] violated Article 235 of the Penal Code No 19/1940 (Almenn Hegningarlög) by publishing the aforementioned statements. In the light of the aforesaid, and with reference to Article 241(1) of the Penal Code, [A’s] request to declare the statements null and void is granted. However, there is no reason to impose punishment; therefore [A’s] request that [the applicants] be punished is rejected ...”
17.  On 8 May 2012 the applicants appealed to the Supreme Court against the District Court’s judgment.
18.  By judgment of 6 December 2012 the Supreme Court confirmed the District Court’s judgment and ordered the applicants to pay, in addition, ISK 500,000 for A’s legal costs before the Supreme Court.
19.  As to the reasoning, the Supreme Court stated:
“... The aforementioned email from [the police prosecutor] can only be understood as meaning that no investigation had been instigated on account of the three reports [to the police] which are referred to in the email. There is nothing to indicate that such an investigation was initiated later and it will not be held against [A] that he did not provide confirmation of that during the proceedings as requested by [the applicants].
With these comments, [and] with reference to the District Court’s reasoning, the Supreme Court confirms the District Court’s decision on declaring the statements null and void and confirms the publication of the judgment in the next issue of DV and the next online edition of DV after the delivery of this judgment. The annulled statements were wrong and defamatory for [A]. When examining the coverage and the publication of pictures of [the company] and its representatives in the printed issue of DV and in the online edition of [DV], [A’s] reputation was attacked, at a time when there were no grounds for it ...”
20.  By letter of 31 May 2013 the Special Prosecutor notified another company representative that “the investigation” into the complaints against him and A had been closed and the case had been dismissed.