New Defamation Act Makes It Harder for Companies to Sue 1
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New Defamation Act makes it harder for companies to sue 1 Briefing note 2 January 2014 New Defamation Act makes it harder for companies to sue Companies will find it harder to sue for defamation under the Defamation Act 2013, which came into force on 1 January 2014. They must now show that a defamatory statement has caused, or is likely to cause, "serious financial loss". Key issues The Defamation Act 2013 came into period in respect of statements force in England and Wales on 1 available online never expired. Reasons for change January 2014. It introduces a Additionally, damage was requirement for all claimants to presumed once the elements of The new test for defamation show that "serious harm" to its defamation were made out, New defences reputation has been caused by the meaning that claimants were Publication of a defamatory statement complained about, or automatically awarded "general" statement that serious harm is likely to be damages, although the quantum caused. For a body trading for could vary. Other changes profit, harm will not be "serious Publishers alleged that these features Conclusion harm" unless it has caused, or is led to international businesspeople likely to cause, serious financial and celebrities swamping English loss. courts with claims that would never An individual claimant faced with a have succeeded in their home requirement to show serious harm to Reasons for change countries, and caused a chilling effect its reputation may struggle; a English defamation law has long been for both the established media and company which has to prove serious seen as "claimant-friendly", in participants in the "new media" such financial loss is likely to find its task contrast to the laws in other countries. as bloggers and those running even harder. As the majority of the websites. The new Act attempts to House of Lords accepted in Jameel v It presumes that a statement is address some of those concerns. Wall Street Journal Europe SPRL false, meaning that the defendant [2006] UKHL 44, the good name of a must prove truth (or plead some The new test for company is, itself, a thing of value, other defence) rather than the defamation and damage to reputation can have claimant proving falsity. A defamatory statement is one that consequences far beyond financial It says that a statement is lowers the claimant in the estimation loss, including lowering its standing in published where it is read, rather of right-thinking people, or causes the the eyes of the public and even its than where it originates, meaning claimant to be shunned and avoided. own staff. This might make people that the courts have jurisdiction The new Act adds another less willing to deal with it, or less willing or less proud to work for it. over what is published on the requirement: a statement is not internet if it was downloaded here, defamatory unless its publication has Even if a company can show a regardless of where it was caused, or is likely to cause, serious decline in revenue following the uploaded or where the intended harm to the reputation of the claimant. defendant's defamatory statement, majority audience was located. Harm to the reputation of a body that how will claimants be able to satisfy trades for profit is not serious harm The lack of a "single publication the court that the losses were caused unless it has caused, or is likely to rule" meant that the limitation by the statement rather than, for cause, serious financial loss. example, by changes in customer 2 New Defamation Act makes it harder for companies to sue taste, the existence of competitor proceedings, they faced large as a publication, which meant that promotions or new products or the irrecoverable costs bills. The new there was, in effect, no end to the general economic situation? There is defence will protect statements made limitation period as long as the also nothing in the Act which states in scientific or academic journals as statement was available to view. how "serious" the loss must be in long as the statement relates to a order to qualify as "serious financial scientific or academic matter, and an Other changes loss". This will take some time for the independent review of the statement's Section 9 of the Act states that, where courts to decide, but is likely to mean scientific or academic merit was a defendant is not domiciled in the UK, that publishers have more confidence carried out by the editor of the journal another Member State of the in publishing, despite pre-publication and another person with the relevant European Union or a state which is a complaints being made expertise in the matter concerned. contracting party to the Lugano Convention (i.e. the EU Member There are a number of other changes Another new defence protects States, Switzerland, Norway and made by the Act which will affect "operators of websites" who do not Iceland), a court will not have claimants' ability to sue. "post" the defamatory statement. jurisdiction over a defamation action This new defence will fail if a claimant unless it is satisfied that, of all the New defences gives the operator a notice of places in which the statement The common law defences of complaint in relation to the statement complained of has been published, justification, fair comment (latterly and the operator fails to respond to England and Wales is clearly the known as honest comment or honest the notice of complaint in accordance most appropriate place in which to opinion) and responsible publication with relevant regulations. These are bring the action. This is aimed at (formerly known as "Reynolds" The Defamation (Operators of alleged cases of "forum shopping" qualified privilege) have been Websites) Regulations 2013, which where a claimant sues in England on abolished and replaced with statutory also came into force on 1 January the basis of a relatively small defences of "truth", "honest opinion" 2014. The Schedule to the circulation of the defamatory and "publication on matters of public Regulations sets out what an operator statement compared with its interest". Honest opinion no longer must do in order to be able to rely on circulation in other countries. requires the statement to be on a the defence, and this may involve matter of public interest, and the contacting the person who posted the responsible publication defence statement within 48 hours or, if it is simply says that the court "must have not possible to do that, removing the Contacts regard to all the circumstances of the statement within 48 hours. case" rather than adopting the House Simon Davis of Lords' ten criteria set out in Publication of a Partner Reynolds v Times Newspapers [2001] defamatory statement T: +44 20 7006 8700 2 AC 127. The precise differences Section 8 of the Act says that if E: simon.davis between the old common law someone publishes substantially the @cliffordchance.com defences and their statutory same statement on more than one replacements will take some time for occasion, time starts running for Julian Acratopulo the courts to work out. limitation purposes from the date of Partner the first publication. The limitation The Act also creates some entirely T: +44 20 7006 8708 period for defamation claims is one new defences. One of them is E: julian.acratopulo year. This means that a claimant will qualified privilege relating to peer- @cliffordchance.com reviewed material in scientific or not generally be able to bring academic journals, which is a proceedings in respect of a Susan Poffley Associate response to complaints by academics defamatory statement if a year has and scientists that they were being passed between the first publication T: +44 20 7006 2758 threatened with proceedings by large of the statement and the date of the E: susan.poffley companies for expressing their views claim. Formerly, each republication by @cliffordchance.com on scientific and academic matters. the same person started time running The complainants said that, even if again. If a statement was available they successfully defended on a website, each click on it counted 102827-4-288-v0.3 UK-0010-BD-CCOM New Defamation Act makes it harder for companies to sue 3 The Act also introduces a repetition of the statements. social media gives increasing presumption that defamation trials will numbers of people a convenient no longer be heard by juries, and Conclusion platform on which to offend and allows a court to order that a The number of defamation cases defame, the number of cases overall summary of its judgment be published against media groups was decreasing will remain steady. But the aim of the if the claimant is successful in its even before the new Act came into Act is unquestionably to make it claim. Previously the court had no force, so it will be interesting to see harder to sue for defamation. such power, and could only award whether the decrease speeds up as a damages and an injunction against result of the changes, or whether, as This publication does not necessarily deal with every important topic or cover Clifford Chance, 10 Upper Bank Street, London, E14 5JJ every aspect of the topics with which it deals. It is not designed to provide © Clifford Chance 2014 legal or other advice. 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