After considerable Parliamentary ping-pong and various political manoeuvrings in light of the Leveson inquiry recommendations, Royal Assent has finally been given to the Act that purports to balance protection of reputation and freedom of speech ...
...The Defamation Act 2013.
It will come into force later this year.
What will change?
Oft-quoted objectives behind the exercise of re-stating the law in this area - to cut out libel tourism and protect those engaged in genuine scientific and academic debate from being gagged by large corporations with deep pockets - seem on face value to have been met:
- Peer-reviewed statements - there is a new statutory defence relating to peer-reviewed statements in scientific and academic journals.
- Foreign nationals (outside the EU/Lugano convention states) will, going forward, need to show that England and Wales is the most appropriate place to bring an action before suing here, where there have been multiple publications, for example on websites.
Defamatory posts - the Act is also good news for website operators, who will have a new statutory defence in relation to defamatory posts on their sites by others. That defence will only fail where the claimant cannot identify the author and the operator fails to assist the claimant to identify. Regulations are to be published that will provide some clarity about what can be expected of operators once on notice of a complaint, but we can expect these to require the handover of name and contact details, and, potentially, removal of offending material.
New obstacles for companies
The Act throws up new obstacles for companies fighting to protect their good name and brand when under attack:
- 'Serious harm' threshold test - the Act introduces a threshold test of 'serious harm' before a statement will be considered defamatory. This applies to all claimants and is both new and significant. The claimant must prove that the statement has caused or is likely to cause serious harm to reputation. Without that, the statement is not defamatory and the claim fails. We can expect many an argument before the courts on this issue.
- 'Serious financial loss' - for companies, the 'serious harm' threshold is to be assessed in money terms. Harm will not be serious harm unless it has caused or is likely to cause 'serious financial loss'. Again, the burden of proof is on the claimant. Since ability to show immediate actual financial loss is rare, the argument will increasingly focus on likelihood of future financial loss.
Pure damage to corporate reputation, it seems, will not be enough and we can expect courts to expect a broad shoulders approach from companies which in truth are likely to emerge financially unscathed from an attack.
The right balance?
Whether the Act has achieved the right balance between protection of reputation and freedom of expression remains to be seen, but one thing is certain - it has thrown up several new obstacles for corporate claimants to overcome when protecting brand and reputation, and a requirement to consider and prove impact on the bottom line.
If you have any questions about the new Act or how the threshold tests will affect your business, please do not hesitate to get in touch.