For many years Britain has been the Defamation capital of the world. Our laws have been so weighted in favour of the claimant that people would travel from around the world to lodge their claims in UK courts where victory was almost guaranteed. But now, a long overdue change in the Defamation act has finally started to tilt the scales of justice back towards common sense and Free Speech. The changes aren't huge, but one change in particular does fall firmly in favour of the many Defamation defendants caught up in litigation with the NGRS. That change refers directly to 'Bodies trading for profit'. As we all know, unlike almost every other trade organisation, the NGRS is very much a FOR-PROFIT money making business. Carry on reading for more details and/or click on the Taylor Wessing link for their understanding of the new improved Act.
Introduction
The Defamation Act 2013 was enacted on 25 April 2013. This note discusses the likely practical implications of the Act. In summary, the Act shifts the balance, between free speech and the right to reputation, in favour of free speech. In some areas this shift is likely to be significant (e.g. the hurdle for companies wishing to sue for libel), in other areas there may be little change in practice (e.g. the truth defence).
Serious harm (section 1)
Under the 2013 Act, “a statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.”
Bodies trading for profit
One of the most important provisions in the 2013 Act states:
“For the purposes of this section [1], 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”.
In our opinion, this means that a for-profit company is likely to need to specify in its letter of claim and Particulars of Claim that the statement:
a) Has caused or is likely to cause the body financial loss;
b) What that loss is; and
c) That the loss is serious.
If it does not specify these things, the defendant may well insist on such details before responding substantively. We foresee that the serious financial loss requirement is going to make it difficult for companies to sue for defamation.
In practice, companies are going to be less likely to take action or even threaten to take action as a result of the new law.
Defendants are more likely to be braver about criticising companies, appreciating the “serious financial loss” hurdle which companies face. This in turn is likely to lead to more actions by individuals associated with the company, e.g. the CEO or someone named in the article. They may argue that the article identified and was defamatory of them.
Some companies are more associated with individuals than others. For example, the late Steve Jobs was closely associated with Apple. Some officers of small companies may argue that an allegation against the company is an allegation against them (to avoid having to prove the “serious financial loss”). But they will still need to prove serious harm – as to which see above – and the other elements a claimant has to prove.
Publishers and broadcasters should therefore make it clear when they are only criticising companies, and not also suggesting impropriety against any individuals themselves (if that is appropriate in the circumstances). It may be that companies will choose to take action with whatever regulator is decided on, following the Leveson report, in respect of inaccuracies rather than claiming defamation.
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