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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.

For example, Pete the plumber hates Bob the builder. In anger, Pete sends an email containing false statements about Bob’s business to all of Bob’s major contractors. Here, it is clear that Pete intended to inflict damage on Bob’s 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.

For example, this might be when a false statement caused customers to cancel their orders or request refunds and, subsequently, damage your business financially.

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.

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