If Youre Liable Be Libelled

Defamation cases probably aren’t something construction companies get involved with every day, but, should your company ever be libelled, Rob Langley shows you where the new Derfamation Act will help your case – and where it won’t

The Defamation Act 2013 came into force at the start of this month, bringing with it a significant overhaul to the former regime governing libel cases.

The previous law on libel cases had been widely criticised as being antiquated, costly and unfair. The new act is geared towards modernising the law in this area, ensuring that better protection is given to those expressing their opinions, in addition to codifying existing common law, and modernising terminology. This means the old common law defences of “justification”, “fair comment” now become statutory defences of “truth”, “honest opinion” and “public interest”. The new act also takes into account the advances in technology since the former act, especially with regards to what is deemed to be ‘publication’.

We provide a brief summary of the most significant changes below.

Serious harm
The new act states that “a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.” So to be the subject of a claim for defamation, a statement will have to have caused, or be likely to cause “serious harm” to the reputation of the claimant. This particular change is designed to discourage claimants from pursuing trivial actions.

This test, in addition to the existing requirements, is that the words complained of would either lower the claimant in the estimation of right-thinking or reasonable members of society, or adversely affect the attitude of others towards the claimant.

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Most claims brought by individuals are unlikely to be affected by the serious harm threshold, as most defamatory statements that are disputed are likely to cause serious damage to person’s reputation. So the main issue will be whether the defendant can rely on a defence. But the introduction of the serious harm test will likely result in an increase in cases not being pursued or a refusal by a defendant to make an offer of settlement.

Serious financial loss to a business
Another key change is that businesses can now only pursue an action for defamation if a statement caused, or was likely to cause serious financial loss. Claimants should consider at the outset whether serious financial loss has occurred as a result of the publication complained of. And remember, just proving “financial loss” will not be enough – it must be “serious”.

This tips the balance against business. It also limits the company’s ability to use the threat of proceedings to silence critics.

Online posts
The new act includes a significant new rule which is designed to deal with statements made online. It also provides a defence to website hosts or operators, although to rely on this defence they must comply with the relevant procedures, including responding promptly to notices of complaint. Changes in the law about single publication also have a strong bearing on online material. Statements will be deemed to be published when they are originally posted, not each and every time it is accessed by readers. As a result, the one-year limitation period will run from the date of the first posting of the statement. This should prevent indefinite liability for online publications, including internet archives.

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The new act extends the existing privilege provisions to cover peer-reviewed statements in scientific and academic journals, reports of scientific and academic conferences (and associated documents) and articles based on information provided by public companies and at a press conference. The inclusion of such an extension was largely in response to the significant lobbying of scientists and academics who have faced unfair legal threats for fairly criticising a company, person or product in the past.

No more jury trials?
The new act removes the presumption that defamation cases will be tried with a jury. This is likely to result in most cases being able to be determined more quickly, more efficiently and at lesser expense.

Publication of judgment
The new act also grants the court new powers, following judgment, to make an order compelling a defendant to publish a summary of the judgment and to remove defamatory statements from a website or from distribution. However, as most defamation complaints do not result in judgment, as they are usually settled, this is not a significant practical change.

The new act has tried to modernise libel law, making it relevant with technological advances simplifying certain provisions established at common law. As a by-product of this modernisation, it appears that the balance has shifted to protecting freedom of expression and legitimate debate. However, for genuine claimants, there are now additional hurdles to get over in seeking a resolution, especially if you are a for-profit business. Demonstrating serious harm or serious financial loss is likely to require substantial evidence which will inevitably increase costs.

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For larger companies, this may not be as much of an issue, but for small businesses or SMEs, the additional costs may prevent them from being able to pursue an action, and less likely to win if they do.

So, you’ve got less protection for your reputation, but less risk of a vindictive court case. On balance, good news.

Rob Langley is a partner and head of construction and engineering at Muckle.

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