Defamation Act 2013: How it could affect your business

A further issue with causation

Arguably a company?s reputation could be damaged without it suffering financial loss per se. However, it could, potentially, be defamed, and its reputation as a place to work and visit could be damaged.

Although, in this example, a company could be caused serious reputational loss, vindicating its reputation is likely to be difficult, prolonged and expensive. 

Protracted claims of this type also give rise to a further issue: the very existence of the claim may expose the claimant to more negative publicity, resulting in further damage to its reputation. In essence, the claim itself could make the situation worse. 

Demonstrating actual or likely serious financial loss in these circumstances may only be achieved by, for example, establishing a link between the statement and consequent inability to recruit suitably talented employees which results in actual or likely serious financial loss. 

Evidentially this would be hugely challenging; due to the amount of variable factors that would be involved, it would be subject to issues of remoteness, reliability and certainty.

Conclusion

The requirement to establish actual or likely serious harm caused by actual or likely serious financial loss may amount to a double edged sword. 

On the one side, the requirement may decrease unmeritorious claims being brought by claimants. 

Conversely, because of the causation issues that are likely to be faced by claimants trading for profit, the new higher threshold may mean this category of claimant is subjected to increased criticism. 

This would be due to those responsible for the criticism being, firstly, less concerned that a claimant would even bother to issue proceedings against them, and, secondly, the ability of the claimant to overcome summary judgment and strike out applications under the Civil Procedure Rules, should it progress to this stage. 

This unsatisfactory position could lead to irresponsible reporting and broadcasting, and, potentially, un-researched, spurious comments. 

If the new regime effectively grants impunity to unjustified defamatory statements, legitimate and justified criticism may be devalued as the public, unable to separate the two, may take the latter less seriously.

Ultimately we will not know the true extent of the impact of the new regime until it is interpreted by the courts. 

Peter Coe is a senior lecturer in law at Buckinghamshire New University and a barrister at East Anglian Chambers.

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