By virtue of section 9(1) of the Defamation Act 2005 Corporations formed with a view to making a profit and employing 10 or more persons, and public bodies constituted under the law of any country, no longer have a right of action in defamation.
Corporations formed for a purpose other than financial gain or which employ less than 10 persons still, however, retain the right to sue for defamation, although unlike in the case of individual such corporations must be able to establish or show direct financial loss, or damage to the goodwill of the business arising from the defamation.
Whilst many companies might no longer have a right of action in defamation, other rights of action such as claims for injurious falsehood and claims for misleading and deceptive conduct prevail. Similarly, the rights of directors and other senior company staff remain unaffected.
Frequently a defamatory reference to a company can implicate directors and other staff whose rights remain unfettered.
Companies which no longer have a right of action for damages for defamation can still pursue a common law claim for injurious falsehood, or as it is sometimes referred to, malicious falsehood. The tort of injurious falsehood bears some similarity to a claim for defamation. With such a claim, however, a plaintiff must be able to establish that a false written or oral statement has been published to others with a view to producing an actual loss, whether it be a loss of profits or damage to business goodwill.
Unlike with a claim of defamation in claims of injurious falsehood, evidence must be adduced in order to prove actual malice and actual financial loss.
Misleading and Deceptive Conduct
Notwithstanding the fact that many companies no longer have a right of action in defamation their rights to bring claims under the Competition and Consumer Act 2010 for misleading and deceptive conduct in trade and commerce remain unaffected. For example, disparaging statements in respect to a competitor’s goods or services can potentially give rise to a claim for damages if it contains significant inaccuracies.