Canada: An Overview Of Business Defamation

Last Updated: November 22 2011
Article by David A. Crerar

Most Read Contributor in Canada, November 2017

Traditionally, a reputation carefully fostered over decades could be lost in minutes through a defamatory comment. The Internet accelerates this destruction to mere seconds.

Communicative attacks on businesses come in all flavours. A few hypothetical examples:

  • a cosmetic surgery clinic accuses a rival of having a higher surgery complication rate;
  • a disgruntled customer sets up a "copycat" website based on a web address similar to the name of a company, that features shoddy visuals and inaccurate information;
  • an environmental activist falsely accuses a company of polluting a river;
  • a corporate press release accuses a rival of stock manipulation;
  • a company is accused of not owning the intellectual property rights to the movie it is distributing, and a threat is made to sue any purchasers of the show;
  • a blogger accuses a mining company of salting core samples and making false statements about preliminary exploration results in an area thought to be rich in minerals.

A swift legal response can help to counteract the harm caused by such attacks. Recent cases confirm that the law of defamation protects the reputations of corporations and businesspeople as well as other individuals.

Defamation is the intentional publication of a false and harmful statement. A publication is defamatory if it has the tendency to lower the reputation of someone in the estimation of reasonable persons in the community.

Generally, to succeed in a defamation claim, a plaintiff must prove three things:

1. Is the statement defamatory?

A statement is defamatory if is harmful to the trading reputation of the company.

An attack on the products or services of a company is only defamatory if it attacks the integrity, competence or other reputational value of the business.

It is the overall effect of the statement that matters. If something disreputable is said about the company in one part of a statement, but is qualified or corrected in another, the overall effect may not be defamatory.

2. Does the statement refer to the plaintiff?

The issue is not whether the defendant intended to refer to the plaintiff, but whether the people who read or hear the statement would reasonably understand it to refer to the plaintiff. The actual recipients of the defamatory statement must have associated it with the plaintiff.

A business may be sufficiently identified even though it is not named, where a reference is made to something or someone over which it exercises control or for which it has some responsibility, for example, its directors or employees.

3. Was the statement "published"?

The essence of publication is communication of the defamatory statement to a person other than the plaintiff.

Every instance of repetition of a defamatory statement is a separate wrong, with a separate potential claim resulting from it. This has important significance for limitation periods, which may restart years after the initial publication.

Generally, a defendant will only be responsible for their own defamatory statement and not for republication by others, unless the defendant requests or authorizes someone to communicate defamatory remarks to others, the person to whom the original publication was made was under a moral, legal, or social duty to repeat or publish the words to someone else, or the republication was a "natural and probable consequence" of the original publication.

It is no defence that one is merely repeating someone else's defamation. Repeating a statement has the same legal consequences as making it in the first place.

The Supreme Court of Canada has very recently confirmed that, generally, providing a hyperlink to a website on which defamatory material is posted will not make the person providing the hyperlink liable for defamation (see "More Protection From Defamation Liability for Website Owners", p. 5). If, however, the person providing the hyperlink adopts or endorses the contents of the hyperlinked defamatory page as their own, they may be liable for republishing the words themselves.


Truth (also known as "justification") is a complete defence to a claim for defamation. The defendant must prove that their statement was true. The test is whether the published statements are substantially true in the setting, context and circumstances in which they were used.

The defence of fair comment protects statements of opinion. It permits a person to comment on a matter of public interest, ranging from an attack on a politician's competence to a scathing restaurant review. The Supreme Court of Canada has recently significantly broadened the defence. The test now only requires that the opinion be one that "anyone could honestly have expressed", including a person "prejudiced, exaggerated or obstinate in his views".

The defence of absolute privilege protects communications of traditionally special importance, where complete freedom of communication is considered crucial for society. Common examples are statements made in Parliament or court.

The defence of qualified privilege applies where the defendant has a legitimate interest or a duty – legal, social, or moral – to communicate information, and where the recipients of the communication have a corresponding duty or interest to receive it. It is sufficient that the defendant honestly and with some reason believed that such an interest or duty existed. In such circumstances, the defendant can "get it wrong" and still be protected from liability, because society does not wish to chill such communications. Occasions of qualified privilege in business include employee reference letters, credit reports and warnings issued by a company about the potential dishonesty or dangerousness of an employee or customer.

The Supreme Court of Canada recently confirmed a new defence of "responsible communication on matters of public interest". To establish it the defendant must prove the publication was on a matter of public interest and was responsible, in that the defendant showed diligence in trying to verify the allegations, having regard to all of the circumstances. To qualify as a matter of public interest, the public must have some substantial concern about the subject, either because it affects the welfare of citizens or because it has attracted considerable controversy. Almost any statement concerning a business activity with a potential public effect could be protected, if the defendant exercised reasonable care in making the statement. This defence is not only available to professional journalists, but is anyone who publishes material of public interest in any medium". It extends to bloggers and other online media.

The defences of fair comment and qualified privilege will be defeated if the defendant was predominantly motivated by malice, or if the publication was excessive in terms of communication or distribution. Malice is shown where the defendant published a falsehood deliberately or recklessly, without regard to its truth or falsity, or to advance an ulterior purpose rather than for the sake of the social purpose protected by the qualified privilege. This ulterior purpose must be the dominant motive for the defamatory publication and is usually the desire to injure the person who is defamed. In a business context, the fact that the plaintiff and a defendant are bitter competitors will be helpful in leading to an inference that the defendant made the communication for the purpose of harming the plaintiff and improving its own economic interests.

The defendant may also lose a qualified privilege defence if the communication is sent to too many people, or contains additional statements unnecessary to achieve the social purpose of protecting the kind of communication in question. The information communicated must be "reasonably appropriate in the context of the circumstances existing on the occasion when that information was given".


Traditionally, courts have treated individual plaintiffs and business plaintiffs very differently in awarding damages. A business plaintiff could generally only recover a nominal amount unless it could show the defamation had a direct effect its business: harm to its credit, or loss of customers or sales. Recent case law indicates, however, that a corporation may now recover damages for injury to its reputation without proof of specific business loss. That said, potential corporate defamation plaintiffs should be cautioned that, absent proof of specific business loss, damages will likely be modest.

Where the defamatory words are likely to produce a general loss of business, damage to loss of earnings or customers may be inferred. It is not necessary to prove a direct link between the loss of specific contracts and the defamatory publications. Canadian courts have noted that Internet-based defamation holds the potential for much greater harm, and thus may warrant larger damages awards.


There are a number of strategic considerations a business should keep in mind when dealing with disparaging statements about it.

When a business suspects that a defamatory statement has been made, it is prudent to adopt a multi-pronged response, focused on preserving customers and evidence. Websites on which defamatory items appear should be printed and preserved and all copies preserved. Employees with likely exposure to customers or members of the public who have seen the defamatory publications should be instructed to keep precise and accurate notes about all inquiries and comments that they receive about them. They should be provided with a script to counteract the defamatory claims. It may be useful to set up a phone line for concerned customers to ask questions about the statements.

A demand letter to the publisher of a defamatory statement should provide sufficient detail to establish the credibility of the complaint, as well as to allow the recipient to investigate the defamation and take steps to stop further statements. All, or a selection of, the falsehoods should be quoted or paraphrased, and their falsity explained. In drafting the demand letter, one should consider the likely response, and make sure that the business does not suffer insult added to injury by a refusal to comply with an unreasonable demand.

A typical demand letter will ask for confirmation that the defamation will not be repeated, that all copies of the defamatory statement have been retrieved and destroyed, and that copies of the defamatory statement have been removed from all websites and other locations. The letter may demand a listing of all places the defamatory statement was published, and to whom the statements were made. It will typically demand that the individuals or employees making the defamatory statements be specifically told that such statements must not be made, and could result in personal liability. Finally, the demand letter should seek reassurances that no further defamatory statements will be issued.

Caution must be exercised with respect to a demand for a retraction or an apology because these may have the detrimental effect of reminding people of the original defamation.


Attacks on reputation, products, or personnel of a business require a rapid business response. They may also require a rapid legal response. As set out above, this area of law is full of complicated pitfalls, and errors in made in the early stages of a crisis can have lasting negative ramifications in the business's struggle to retain and regain its damaged reputation. This article is very much a broad and high-level survey of the law. Because defamation claims turn primarily on their unique facts, it is imperative that a business obtain careful legal advice as part of any comprehensive business reputation rehabilitation strategy.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions