Is the tide turning for Defamation?

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The Defamation Act 2013 (New Act) came into force on 1st January 2014, 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.  It also takes into account the advances in technology since the former Act, especially with regards to what is deemed to be ‘publication’.

Key Changes

The New Act contains a number of changes, most notably the introduction of the “serious harm” threshold and the necessity for businesses to prove “serious financial loss”.  We will provide a brief summary of the most significant changes below:

The Serious Harm test

Under the New Act, Section 1 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.”  Therefore, 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 is in addition to the existing requirements 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.

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, the main issue being whether the defendant can rely on a defence.  However, it is likely that the introduction of the serious harm test will 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 in the New Act 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.  Just proving “financial loss” will not be enough, it must be “serious”.

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

Defences

The New Act abolishes the common law defences of justification, fair comment and privilege and replaces them with the statutory defences of (1) truth, (2) honest opinion and (3) public interest.  The statutory defences mirror their common law predecessors and are not intended to change the law, but rather to replicate and simplify the law as it was.

Online Posts

The New Act includes a significant new rule which is designed to deal with statements complained of that are made online.  It also provides a defence to website hosts or operators, where the Claimant is able to identify the person who posted the statement (increasingly relevant to internet forums).  However, to rely on this defence the website operator must comply with the relevant procedures, including responding promptly to notices of complaint.

Privilege

The New Act extends the existing privilege provisions in the Defamation Act 1996 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 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.

Single Publication Rule

The New Act also includes another significant provision in relation to 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 1 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.

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 the majority of defamation complaints do not result in judgment (usually being settled), this is not a significant practical change.

Summary

It is clear that 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.  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.  So, on balance, this is good news.

For further information, help or advice, please contact Adam Aston on 0191 211 7980.