Whether you’re a business or an individual, your reputation can carry a lot of weight in an industry or market. A good reputation and recognition can help you foster better relationships and access opportunities you otherwise might not have access to. A bad reputation can greatly limit your prospects and negatively impact you financially.
The torts of defamation and injurious falsehood are frequently discussed but commonly misunderstood. Defamation includes concepts like “libel” and “slander” – lies or misrepresentations that lead to reputational and related harms to a person or business you can seek damages for.
Injurious falsehood on the other hand deals less with reputational harm and more with “malicious” falsehoods intentionally meant to disparage someone’s business, title in property or commercial products and services resulting in an economic loss.
Our business law litigators can help whether someone is attacking your business’ reputation or disparaging what your business has to offer in the marketplace. You will be calling the shots during the negotiations, litigation, and the rest of the legal process, and we’ll be there to guide your every step.
What is Defamation?
Defamation occurs when a false statement is made about an individual or business to a third-party causing damage to that individual’s or business’ reputation. These false statements can be categorized more specifically under slander and libel.
Libel is a form of defamation with a permanent record, such as a newspaper article, radio, or tv broadcast. Slander includes non-permanent oral statements or even gestures circulated by someone.
In Ontario, the Libel and Slander Act governs whether you’re required to provide the offending party notice to retract their defamatory statements as part of the legal process. In some cases, you might also have a limited time to sue someone for defamation.
The legal test for defamation involves proving:
- The words were defamatory in the sense that they would tend to lower you or your business’s reputation in the eyes of a reasonable person.
- The words in question in fact referred to you or your business.
- The words were published in the sense that they were communicated to at least 1 person other than you or your business.
Determining whether you need to provide notice and how quickly you should sue is not something you should leave until the last minute. As soon as you learn about a false or damaging statement, you should seek legal advice. Our commercial litigation lawyers know the ins and outs of defamation – we can tell you what needs to be done and when to ensure you are compensated for the damage to you or your business’ reputation.
What is Injurious Falsehood?
The tort of injurious falsehood occurs when the malicious publication of a false statement concerning a business leads other persons to act in a manner that causes economic losses to that business.
Injury to reputation is not something you need to prove for this tort. The false statement should reflect adversely on your business and must be made with the intention to dissuade others from dealing with you.
To prove injurious falsehood, you must show that:
- Another party maliciously published a falsehood in writing or orally.
- That falsehood concerns you or your business.
- That falsehood caused other persons to act in a manner with you or your business resulting in actual losses, damages or expenses.
A good example of injurious falsehood is when one business engages in a marketing campaign lying about another business’ products or services. The damages you could sue for in this scenario are the loss of business you endured and other quantifiable damages.
What is the Difference between Defamation and Injurious Falsehood?
One of the main differences between defamation and injurious falsehood is the requirement of malice. To prove a claim of injurious falsehood, you must demonstrate that the person who made the statement intended to inflict damage on you or your business.
Suffering Financial Loss
In a claim of injurious falsehood, you must show that your business has suffered economic losses due to the false statements. In contrast, proof of financial loss is not a necessary element to have a claim for defamation.
Availability of Defences
Many defenses are available in a defamation claim which is not the case for injurious falsehood, including but not limited to:
- Truth or justification
- Fair comment
- Absolute privilege
- Qualified Privilege
- Responsible communication on matters of public interest
How Are Claims for Defamation and Injurious Falsehood Resolved?
If someone made false and disparaging statements against you or your business, our commercial litigation lawyers are here to help. While a “wait and see” approach could work for many different types of claims, you should contact a lawyer as soon as you learn about a false statement being spread about you or your business.
Whether you are suing for defamation or injurious falsehood, you can seek damages for economic losses and seek non-monetary remedies like injunctions – an order for a party to stop doing something. You can think about economic losses as direct financial impacts on you or your business because of another party’s wrongdoing – loss of business, clients, profits, market share, and even contracts.
For defamation specifically, you can also seek general damages for the non-economic harm another party’s actions had on you, your mental health or your life. A court has some discretion to determine how much in general damages to award somebody.
As soon as you become aware of the untrue and damaging statements made about you or your business, you should put the other side on notice of their wrongdoing. You can also account for and demand damages for the harm the other side caused you with its statements. This is typically done through a demand letter.
If your negotiations do not work, the only option left is to move through the other stages of a lawsuit up to trial. Our lawyers can help you recover damages and protect you or your business reputation in a public court of law.
Whether you’re using or defending against a claim of defamation or injurious falsehood, the process can become overwhelming and complicated. Our commercial litigation lawyers can help lighten your burden and get you the results you need.
If you need help clarifying your rights or representation in a defamation or injurious falsehood case, do not hesitate to contact our business litigation lawyers. You can reach us at 1-800-771-7882, or email [email protected], and we would be happy to assist.