The impact of defamatory allegations against a corporation or business can be significant with reputational damage and a loss of customer confidence.
Libel, Slander and Defamation are legal exposure which can be insured as part of a Professional Indemnity Insurance, either as extensions to a `negligent act error & omissions wording’, or as being included in a broader form `civil liability wording’.
There are three levels to the ‘meaning’ of any defamatory allegation: firstly, the claimant is guilty of wrongdoing, the second that there are reasonable grounds to suspect the claimant of wrongdoing and the least serious being that there are reasonable grounds to investigate whether the claimant is guilty of wrongdoing.
For a corporate claimant, the bar has been set higher ‘harm to the reputation of a body that trades for profit is not “serious harm” unless it has caused or is likely to cause the body serious financial loss.’ It is therefore harder for companies to sue for libel than individuals.
Libel typically takes the form of written communications such as print publications and online material such as website content, TV and radio broadcasts, films and theatre performances. Slander typically covers spoken statements or concerns transient, or temporary, forms of publication such as chat room forums.
Defamation is a personal action with only a person or corporate body who is ‘referred to’ in the defamatory statement is able to bring a claim. It is not necessary to be named. A key difference in individual and corporate defamation claims is the different requirements for showing serious harm to reputation.
After the claimant establishes the statement complained of is defamatory and has caused or is likely to cause serious harm to their reputation, the burden of proof then lies with the defendant. A claim in defamation must be brought within one year from the date of publication.
The single publication rule introduced by the Defamation Act 2013 means that any cause of action in respect of any subsequent publication of the same statement by the defendant is treated as having arisen from the date of first publication. The court does have discretion to disapply the limitation period in certain circumstances.
Since the Defamation Act 2013, English defamation cases are decided by a judge alone. The exception to this rule is where the court orders otherwise
Malicious falsehood is a tort that protects a claimant’s economic interests from being damaged by false statements. To succeed, a claimant must prove that the defendant maliciously published a false statement that referred to the claimant and that statement has caused economic loss or is likely to cause economic loss and is in writing or other permanent form or relates to the claimant’s office, profession, trade or business.
In contrast to a claim in defamation, a claimant need not prove that there has been any damage (or likely damage) to its reputation. However, it is generally more difficult to succeed in a claim for malicious falsehood, primarily because of the need to prove that the statement was made in malice. Damages awarded for claims in malicious falsehood tend to be lower than those awarded in defamation claims.
W Denis specialise in all forms of Professional and Financial Risks Insurance for businesses in the UK, Europe and Worldwide. To find out more, please contact Daniel Moss at daniel.moss@wdenis.co.uk or on 0044 (0)113 2439812 or contact Mark Dutton at mark.dutton@wdenis.co.uk or on 0044 (0) 7831 366 469.
