Defamation can cause serious harm to businesses, damaging reputations and leading to financial losses. If your business has been defamed, it is essential to understand your legal options.
Libel vs Slander: Understanding the difference.
Defamation refers to false statements that have caused reputational harm. It takes two forms:
- Libel: A defamatory statement made in a permanent form, such as in writing or through a broadcast.
- Slander: A defamatory statement made in a non-permanent form, such as speech or gestures.
While the legal tests for libel and slander are different, both require that the statement be false and has caused reputational damage.
Can a company make a defamation claim?
The short answer is yes. A company can sue for defamation if it evidenced that the statement caused or is likely to cause serious financial loss.
Key Requirements for a company Defamation Claim:
- False Statement: There must be an untrue statement about the business, its products, services, or practices.
- Serious Financial Loss: The business must show actual or probable financial harm, such as lost revenue or clients.
- Public Communication: The statement must have been made to a third party someone outside of the business.
- Nature of the Statement: Accusations such as fraud, unethical practices, or poor service can be defamatory. However, negative opinions or general criticism generally will not meet the threshold as a business is a corporate entity that cannot be offended by comments the way an individual can[1].
‘Serious financial loss’ in a defamation claim is not clearly defined, and varies case by case, as a substantial loss to a small business would not have such an impact on a large entity. A small business could meet the threshold by losing one high-value client, whereas this may not be substantial to a large business.
Steps for a business to sue for defamation.
- Seek legal advice: A solicitor can assess your case and help to prevent further harm.
- Gather evidence: Collect supporting materials, such as:
- Screenshots of the defamatory statement (if online or written).
- Correspondence with the maker of the statement or third parties.
- Statements from potential clients deterred by the defamation.
- Address Online Defamation: If the statement is online, request its removal. Social media platforms may take time to respond, but removal requests can be submitted if the content breaches the social media’s terms.
- Send a Legal Notice - A solicitor can issue a formal demand for retraction or apology before proceeding with legal action.
[1] Defamation claims – a guide for business owners | Harper James
