The number of defamation cases is increasing as the economic situation worsens, according to a dispute resolution lawyer.
Simon Griffiths, a solicitor in the dispute resolution and litigation department at Black Country law firm George Green, says that the number of clients seeking to protect the reputation of their company and their goods against slander or libel has risen by more than 500 per cent in the past six months.
“Businesses facing mounting financial difficulties seem to have made company executives increasingly desperate for sales, which some seek to secure by falsely running down their competitors,” says Mr Griffiths, who is based in George Green’s Cradley Heath offices.
“This practice has always gone on, and is often no more than mere exaggeration about the benefits of one product against another, but as the downturn deepens, we are now seeing more extreme examples, which go well beyond what is acceptable, or legal, and threaten to damage other businesses.”
According to Mr Griffiths, some attempts at slander or libel are much more than just unsubstantiated gossip to a customer, which is hard to prove, but some individuals and companies are using the internet and emails to third parties to make damaging statements.
He says: “For example, the High Court recently awarded businessman, Mathew Firsht, £22,000 in damages for libel against an old school friend, who created a false profile on Facebook, wrongly alleging that Mr Firsht owed substantial sums of money which he had repeatedly avoided paying by lying, and that he and his company were not to be trusted. It also falsely indicated his sexual orientation and political views.”
Mr Griffiths continues: “We also are aware of a recent case when a residential and commercial estate agency actually called in police to investigate when emails were sent to hundreds of local businesses falsely claiming the firm had gone into liquidation.
“In yet another case, a businessman sent an email to a number of industry contacts wrongly claiming a competitor was in financial difficulties just 48 hours before he made an unsolicited offer to buy the company.
“Such false and malicious rumours can quickly gain a life of their own and cause real damage to an organisation, not just losing it orders, but encouraging suppliers and customers to change their terms of business, and funders and employees to become unsettled.”
According to Mr Griffiths, if a company becomes aware that it or its goods or services are being defamed, it is vital to stop the defamation as soon as possible to prevent any further damage to its reputation.
“This can be done by means of demanding an undertaking that the offending party will desist from such libel or slander and asking for a list of people to whom the false statement has been made, as well as demanding an apology and damages.
“In the absence of a satisfactory reply, injunctive relief can be sought from the court, along with damages by way of compensation.”
There are number of defences open to people or companies accused of defamation, says Mr Griffiths. These include: justification, in other words that the statement is true or substantially true, or fair comment, on a matter of public interest without malicious intent.
“In business matters, the only defence against defamation which is generally available is justification. Therefore, all businesses, no matter how desperate they are to secure a sale, should remember to be circumspect about what they say in their dealings with their customers and ensure that they’re truthful in any statements they make about third parties.”