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LIBELBy Patrick McCabe, Johnston Withers, Lawyers, Adelaide.

Many words are bandied about to describe a statement made about a person that hurts that person’s reputation or makes them lose money. There are two main categories of legal action you might take against someone who makes a hurtful statement about you. The first is defamation, the second is injurious falsehood. Two additional terms, libel and slander, are often used.

Here’s a short guide to what these terms all actually mean under Australian law.

Defamation and injurious falsehood compared

‘Defamation’ is the term generally used in modern Australia by lawyers to describe the legal action you can bring against someone who made a statement that identifies you and hurts your reputation.

There are various defences available to someone accused of defamation, including the defence that the statement was true, or that it was an expression of an honestly-held opinion based on proper material and in the public interest.

A term uncommon to hear from non-lawyers, but increasingly used by lawyers, is ‘injurious falsehood’. It’s a type of legal action very similar to defamation, but separate from it.

The most important difference between injurious falsehood and defamation is this: defamation is mainly about statements that cause you hurt feelings or damage your reputation; injurious falsehood is mainly about statements that make you lose money.

This distinction affects what damages you can get. In defamation, as long as the statement harmed your reputation, you can get damages for loss of reputation and hurt feelings. In an injurious falsehood action, however, the statement doesn’t need to harm your reputation, but it does need to cause you some financial loss.

Johnston Withers Director Richard Bradshaw gave an illuminating explanation of this distinction in an article he wrote for MSI Global Alliance.  Imagine John owns a successful restaurant. Mark’s just starting out in the restaurant trade, and sadly no-one’s coming to his new restaurant. Unscrupulous Mark decides to tell people John’s restaurant is closed, even though he knows that’s a lie. People believe Mark, and they don’t go to John’s restaurant because they assume it’s closed.

Mark’s statement doesn’t harm John’s reputation. There’s nothing embarrassing about being closed. Maybe John’s simply on holiday. But Mark’s statement does cause John financial loss, because potential customers stayed away. That means Mark’s statement wasn’t defamation, but was an injurious falsehood.

Now imagine Mark isn’t just unscrupulous, but also spiteful. He tells people not just that John’s restaurant is closed, but that it was closed by health inspectors. That statement is both defamatory and an injurious falsehood. It causes John financial loss, but also harms John’s reputation, because it’s embarrassing to run an unhygienic restaurant.

Finally, let’s imagine Mark simply accuses John of having an affair with Mark’s wife, even though he knows he’s not. Some people believe Mark’s accusation, and are disappointed in John. But no-one stops going to John’s restaurant, because John’s food is just so tasty. This statement may well be defamatory, but not an injurious falsehood. It harms John’s reputation, but doesn’t cause him financial loss.

There are two more important differences between defamation and injurious falsehood:

  • First, most companies can’t bring actions for defamation, but all companies can bring injurious falsehood claims. This is because defamation is about hurt feelings and reputation. Companies don’t have feelings, and the law doesn’t protect their reputation in this instance. On the other hand, injurious falsehood is all about financial loss, and companies can have financial losses.
  • Second, to establish a claim for injurious falsehood, you must prove the injurious statement was false, and that it was made maliciously. That can be very difficult. In a defamation claim, you don’t need to prove these things. If the defendant says the statement was true, he or she must prove it. The plaintiff doesn’t have to prove the statement was false. So generally plaintiffs prefer to bring defamation actions if they can.

Libel and slander

Often people accuse others of making ‘libellous’ or ‘slanderous’ statements, rather than ‘defamatory’ statements. ‘Libel’ remains  a commonly-used term for defamation in the USA, but in modern Australia, the terms ‘libel’ and ‘slander’ really only have historical significance.

Historically, libel and slander were separate legal actions – libel was for written defamatory statements, and ‘slander’ was for spoken statements. This distinction is now abolished in Australia. As a result, these days Australian courts always refer to ‘defamation’ and never use the terms ‘libel’ and ‘slander’. So, if someone accuses you of ‘libel’ or ‘slander’, you should consider it as if they accused you of defamation.

Contact the author directly by email or by telephone.

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