How do you protect your business against individuals and rival companies’ intent on causing your business financial losses by spreading lies about the goods or services you provide?
The answer is the law of law of malicious falsehood a law whose objective is to protect economic interests.
Malicious falsehood applications can be made jointly with defamation claims or bought as a stand-alone action. Although both malicious falsehood and defamation claims deal with the publication of false statements the main difference between them is that a claimant in a malicious falsehood claim is not required to prove damage to reputation.
Financial losses
A claim can be made against a person who maliciously makes a false statement which refers to the claimant, his business and economic interests and can be demonstrated to have caused the claimant financial losses.
The law of malicious falsehood can be applied to various situations. Slanderous remarks about goods and services calculated to cause financial losses can both be addressed. An example may be when a rival business, a disgruntled customer or an ex-employee makes false statements to cause you financial losses.
To bring a successful claim a number key tests will need to be fulfilled.
It must be shown that the defendant intended to publish the malicious statements complained of with an inappropriate motive and the evidence must show that the defendant had knowledge that the said statements were false.
That the defendant was reckless regarding the truth or falseness of the statements when they were published and that the defendant believed the statements to be true, their main motive in issuing the statements was to injure the claimant’s economic interests.
The claimant must establish that the statements made by the defendant were untrue. This makes malicious falsehood claims different to defamation claims, where the false statement is presumed and the burden of proof falls on the defendant to prove that the statements are true. Also, the statement protested about even if it is false and misleading, must be more than mere banter or sledging between rival companies. The defendant cannot argue honest opinion as is possible in a defamation action even if the defendant argues a member of the public could have believed the statement to be true
Whether directly or an indirectly, the claimant, his economic interests, or his business, or property must be identified. The claimant must prove that the statement has resulted in actual financial loss. It must be demonstrated the words used by the defendant were intended to cause financial damage to the claimant and were published in writing or other permanent form.
Financial Damage
The defendant’s words were intended to cause financial damage to the claimant in relation to any profession, office, business, trade or calling held or performed by him at the time the statement was published. The claimant must categorise the nature of the likely loss and the method by which such loss would be incurred.
The Court can award damages to a claimant who can establish that the defendant’s statements caused them genuine financial loss or likely financial loss. The court also grant injunctive relief both interim and final.
Should you face a possible malicious falsehood situation please call the Quest to discuss the matter and to see how we can assist you to mitigate this difficult situation for your business or profession on 01455852028.
