When Does Defamation Affect your Business and What Can you do About it?

Introduction

Of the economic torts, defamation is emerging as one that we see more frequently than others. It is also one of the more widely known and referenced. However, often, references to defamation don’t do justice to its complex nature. Recognising defamation in a social sense is one thing; most of us are attuned to statements that cross the boundaries of propriety. But when do those statements go further; when do those statements become an affront to the law of defamation? In reality, the threshold that must be crossed for a statement to be considered defamatory is quite high. The extent to which statements meet that threshold in the course of ordinary business dealings is therefore minimal. Nevertheless, it does happen, and it is something that can have a profound effect on business owners in a professional and personal capacity.

First, Let’s Take a Look at When a Statement Becomes Defamatory

As with all economic torts, defamation is established with reference to a set of criteria. Being a derivative of common law, those criteria have evolved to mirror the social and commercial expectations of today. However, that evolution takes time; there are some elements of defamation that are yet to truly merge with contemporary expectations. To add to the complexity of defamation, there is no conclusive way to establish it without the input of a judge. That reduces the leverage of both parties, should they seek a pre-trial resolution. To render the best possible argument, though, in establishing defamation, there are some indicators to look for. The most salient of those are listed below.

Was a statement made about you and published to at least one other person?

Foremost, it is important to recognise that your capacity to sue for defamation depends on whether it affects you. No person can seek damages for a defamatory statement made about someone else. Specifically, an allegedly defamatory statement must be made about the party seeking relief. If that is the case, the question then becomes one of publication: was the apparently defamatory statement published? At this point, the complexity of economic torts law begins to reveal itself. Notably, the law’s view of what amounts to publication is not what you might expect. Publication, in terms of a defamatory statement, needn’t be on paper, in the news, or on TV. Publication is a broad term, which captures any exhibition or dissemination that makes a defamatory statement known to the community at large. Of course, it is necessary to prove that at least one other person has accessed the statement.

Did that statement diminish your personal or professional reputation?

This element of defamation is one that often causes confusion among the business community. And understandably so; this element is one that, among other things, distinguishes insults from defamation. The importance of noting that distinction cannot be understated. Often, insults invite a similar degree of aggravation to defamatory statements. But without the capacity to diminish a party’s personal or professional reputation, insults remain just that: insults. To transgress, and enter the realm of defamation, a statement must pose an immediate threat to personal or professional reputation. It is that requirement that connects this tort to the broader sphere of economic torts, which are characterised by loss. The loss that stems from reputational damage can be significant, so much so that the law sees fit to intervene. It is for that reason that this element of defamation is pivotal.

Remember: Defamation is an Economic Tort, so Proving it is Complex

Of course, defamation is more intricate and complex than the above two elements suggest. Solicitors themselves often have to apply considerable effort to grappling with defamation’s finer points. That is because defamation, like all economic torts, is a very complex area of law. It marks the convergence of old common law precepts, and contemporary community expectations. Proving it, then, is a complicated matter, and that discourages many businesspeople from pursuing relief against potentially defamatory statements. That is further compounded by the questions asked by the law – even once the relevant criteria are met.

To establish whether defamation has taken place, the law asks certain questions

The law is founded on distinctions; taking certain pieces of information and categorising them is key to arriving at just and equitable solutions. But it is also a complicated process, and it’s predicated on complex questions. When it comes to establishing defamation, those questions cover:

• innuendo versus direct meaning;
• the means of publication;
• liability; and
• standing.

From the perspective of an affected party, these questions might not seem vitally important. But without them, holistic and just solutions cannot be formed. Even more importantly, without answers to those questions, the law cannot continue to develop with contemporary expectations. For example, questioning how a statement is published allows courts to respond to technological advances such as social media. Such responses are vital to maintain effective judicial oversight of community standards.

Even if a court finds that a statement amounts to defamation, there are some defences

Few common law actions are without a defence. Defamation is no different. There are several compelling defences to defamation. Each has the potential, if applied correctly, to absolve a party of liability even if that party’s statement is otherwise held to be defamatory. Some of those defences include:

• Substantial truth;
• Contextual truth;
• Absolute privilege;
• Qualified privilege;
• Justification;
• Honest opinion; and
• Triviality

The most common, and successful, of those defences are substantial and contextual truth. Understandably, a defamatory statement can only be so if it is untrue; statements of truth, whatever their effect, are unencumbered by the tort of defamation.

In the Information Age, Defamation Has Far-Reaching Consequences

As information becomes more pervasive, and publication becomes easier, defamation law is being tested with surprising frequency. At times, though, it emerges as a stalwart defender of business owners who find themselves subject to unfair claims and accusations. The consequences of defamation can be profound, and far reaching, so a firm understanding is vital. Even more important, though, is legal assistance; if you’re affected by defamation, your access to relief is dependent on strong legal arguments.

By Finian McGrath

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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