Keeping your eye on your online reputation is now absolutely critical following the new Defamation Act 2013 – Part 2 – The Serious Harm Test

Part 2 in our series on the Defamation Act 2013, focuses on the serious harm test – which will be particularly prevalent for big businesses who become the subject of libellous slurs – the key here is that the Court will no longer entertain frivolous cases – however, whether this will have any practical effect is yet to be seen – as the whole purpose behind a claim in libel is that the Claimant feels that they have been wronged.

The key test here is that the statement complained of, caused, or was likely to cause, serious harm to the reputation of the Claimant – an increase from the previous test of merely lowering the claimant in the minds of right thinking people. For a company making profit, the way that you determine serious harm is to determine if your profit, or your ability to make profit, is reduced.

The test for serious harm will make an individual claimant’s life hard, but will make a company’s life even more difficult. Previously cases such as Jameel v Wall Street Europe SPRL have made it clear that the damage caused by defamatory statements against a company can have effects reaching far beyond just the potential lowering of profit, such as damage to name, reputation and goodwill etc. However, this serious harm test in the new Defamation Act 2013 seems to have moved away from attributing goodwill and reputational damage. Instead, it now focuses solely on profit damage, in turn making the life of the company seeking to claim losses even harder. The tough part will be showing the Court that the decline in profit is solely as a result of the libellous statements and not as a result of normal market issues such as recession, changing economic climate etc.

There are no current guidelines in the Defamation Act 2013 setting out  how much this loss has to be, what the criteria is etc, so it will take some time for the Courts to make up their mind and set up a litmus test of the seriousness of harm.

The practical effect is that publishers may become more confident when deciding what may or may not amount to libel, and may follow the ‘publish and be damned’ mantra, when dealing with a company, even when they receive pre-action correspondence.

The way to combat this is to get a specialist libel and business lawyer to act for you, who understands the system, and knows how to put the publisher off printing the article or blog in the first instance, or alternatively, to have the statements disabled or removed immediately.

Proving serious harm will be necessary if the matter has to go to Court, but an aggressive position at the outset, can avoid the need for Court altogether. This is what we at Pinder Reaux do, we understand business, being a entrepreneurial firm, and we are libel specialists – publishers can still be put off publishing material, or be persuaded to take material down quickly, you just need to make sure you pick the right firm to fire that first shot off for you. As a managing director or CEO of a company you simply afford to make a mistake on this.  

John Spyrou

Director & Head of Media & Sports Law @PinderReaux