In Short
- Defamation harms reputation, while injurious falsehood causes financial damage through false, malicious statements.
- Businesses with over ten employees cannot bring defamation claims but can pursue injurious falsehood for economic loss.
- Injurious falsehood requires proving false statements were made with malice and caused financial harm.
Tips for Businesses
If your business has suffered financial loss due to false statements, consider pursuing an injurious falsehood claim. Ensure you can prove the statement was false, made with malicious intent, and caused financial harm. For reputation-related issues, smaller businesses may bring a defamation claim. Seek legal advice early on.
Injurious falsehood and defamation are two different claims that you can bring to court. Defamation occurs when someone publishes false statements that harm your reputation. In comparison, injurious falsehood is when someone has published false statements maliciously which financially damage to you or your business.
While an individual can bring a claim of defamation, businesses with more than ten employees cannot and will need to bring a claim of injurious falsehood instead. This article examines the differences between defamation and injurious falsehood and the key requirements for beginning either action.
What is Defamation?
Someone could publish defamatory statements in a number of places, including:
- over email;
- on social media;
- in person; or
- in print.
To bring a claim of defamation, the statement must:
- be communicated or published to a third party (someone other than the target);
- include defamatory information;
- be about the target of this information; and
- not have a lawful excuse for publishing the information.
What Information Is Defamatory?
Although the comments must cause harm to your reputation to be defamatory, it is not a requirement for you to suffer financial loss because of the defamatory statements. Instead, you must prove that the defamatory information:
- caused the public to lower their opinion of you;
- exposed you to ridicule or contempt; or
- caused you to be avoided or shunned.
The Defence of Truth
Defamatory statements must be false. Therefore, the defence of truth can completely put an end to a defamation claim. If the statements in the email are true, you cannot claim defamation. This is because the court considers that someone has not lowered your reputation, but they have only brought it down to the level where it should actually be.
Larger Companies Cannot Claim Defamation
In addition to the above criteria, corporations with more than ten employees and not for profit organisations cannot bring claims of defamation. This is because defamation considers the damaged reputation of an individual. In comparison, a corporation is concerned with commercial interests and cannot be embarrassed defamatory statements. If you believe that harmful statements have damaged your company’s reputation, injurious falsehood might be the more appropriate cause of action.
What is Injurious Falsehood?
Where an individual business has suffered actual financial damage as a result of false statements, they may bring a claim of injurious falsehood. The key elements of injurious falsehood are that:
- a false statement has been made about the business’ goods or business;
- the statement was published to a third party;
- there must be malice on the part of the defendant and;
- you must show actual damage as a direct result of the statement.
To bring a claim of injurious falsehood, the statement must be completely false.
The Requirement of Malice
One of the key differences between injurious falsehood and defamation is the requirement of malice. This means that the other party needs to have had the motive to hurt or injure your business with their statement. If you believe you are the target 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
A further distinction from defamation is that a claim of injurious falsehood must show that your business has suffered a loss to its finances or business activities.
Key Differences
This table provides an overview of some of the key distinctions between the two claims.
| Injurious Falsehood | Defamation |
| Both individuals and companies can bring a claim. | Limited to individuals and companies with less than ten employees. |
| Concerned with economic loss. | Concerned with reputation damage. |
| You must show that the statements are false. | The false nature of the statements can be presumed. |
| Considers the commercial interests of a company. | Considers the reputational damage of an individual. |
| Malice must be shown. | No malice required (except when considering defences and damages). |
| You must show financial damage. | The court presumes that there has been reputational damage. |
Key Takeaways
There are important distinctions between injurious falsehood and defamation. There are higher barriers and more difficulty involved with a claim of injurious falsehood. If your company has suffered economic loss as a result of false statements, you can bring a claim of injurious falsehood. On the other hand, if someone has published false information which has harmed your reputation, you can bring a claim of defamation.
If you need help understanding injurious falsehood and defamation, our experienced dispute lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
What must be proven in a defamation claim?
You must show that the defamatory statement was published to a third party, it contained false information about you, and it caused reputational harm.
What are the key elements of injurious falsehood?
To claim injurious falsehood, you must prove that a false statement was made about your business, published to a third party, made with malice, and resulted in financial loss.
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