Defamatory content on social media can be devastating for business and professionals. A disparaging post that goes viral on Instagram or a review on Yelp or Google that took the author a few minutes to write can destroy years of hard-earned goodwill. This article offers a brief guide on internet defamation and the legal options available to respond and seek redress.

DEFAMATION – A PRIMER

Defamation is a publicly made false statement of fact that harms another's reputation. It is intrinsic to this definition that the statement is false. If a statement is disparaging but true, then it is not defamatory. Businesses have reputations that can be defamed as much as individuals do and are therefore entitled to protection under defamation law.

To proceed with a defamation action, the claimant must provide facts demonstrating that the statement:

  1. Is objectively harmful (in that it would tend to lower the reputation of the claimant to a reasonable audience – proof of actual harm is not necessary);
  2. was communicated publicly; and
  3. was in reference to the claimant.

On establishing the above, a court presumes the statement is false and the burden shifts to the author of the statement to establish a defence. For business and professionals a few of the principal defences are:

  1. Truth – A true statement of fact cannot be defamatory; and
  2. Fair Comment– A statement of opinion that is based on fact is not defamatory, with a few caveats: the opinion must be honestly held by the author (meaning it was formed based on actual events), the opinion must be recognizable as opinion (rather than as a fact), and the opinion must be expressed without an ulterior purpose (i.e., malice).
  3. Qualified Privilege – Where the defendant has an obligation or duty to communicate information, for example in the context of meetings between business affiliates or within a business. Qualified privilege has been found to apply to communications between the company and shareholders regarding statements made that are critical to the company or its employees, or to other employees when explaining why a particular employee had been terminated.

For businesses and professionals, disparaging remarks regarding competency, ethics, illegal conduct and knowledge will be presumed to be defamatory. A few examples of statements that have been found by the BC Courts to be defamatory include: assertions that a contractor was double billing, the inferior quality of a company's products, a company's insolvency, and public assertions of botched surgeries or medical malpractice.

INTERNET DEFAMATION

Given the reach and ubiquity of online content, internet defamation can be particularly disastrous, and also gives rise to unique legal considerations:

  1. Jurisdiction – As defamatory content posted online can be published in foreign jurisdictions and reach local audiences (or local jurisdictions and reach foreign audiences), internet defamation necessarily raises jurisdictional issues. If you want to sue someone for defamation in a Canadian jurisdiction, the online post must have what the Courts refer to as “a real and substantial connection” to the jurisdiction. This does not mean that the publisher must be based in Canada, but at least, that the content was capable of reaching audiences and harming the reputation of the claimant in that Canadian jurisdiction.
  2. Limitation Periods – In Canada the limitation period for a defamation claim is renewed each time an offending statement is republished or publicly read. In the context of online defamation, where defamatory content can be easily republished or made accessible forever, a defamation claim can theoretically have an endless limitation period.
  3. Hyperlinks– Simply referencing or providing a link to defamatory content will not be defamatory unless the reference to the hyperlink can be interpreted as being an endorsement or encouragement of the defamatory content.
  4. Anonymity – Online anonymity and usernames add an additional hurdle to achieving redress for defamation. However, there are multiple tools to determine the author's identity. An action can be started against a “John Doe” defendant. This can be followed by a court order requiring the website to disclose the personal information of the anonymous author. The IP address linked to the poster can be tracked, creating an important evidentiary link. Last, courts can draw inferences from the content of the post to determine the identity of the suspected author.
  5. ISPs and Websites as Intermediaries– To be liable for defamation, an ISP or website must be more than a ‘passive instrument' in its publication. This protects search engines, as they rely on algorithms to generate the results posted. On the other hand, websites that invite user posts and comments may be held liable if they are found to have been aware of the defamatory content.

DAMAGES

As internet defamation can have extraordinary reach and influence, so to are the potential compensation awarded to the victims of defamation. For businesses and professionals, the following categories of damages are available:

  1. General Damages: Intended to compensate the target for the harm caused by the defamatory statement (for example: the loss of customers or clients, a drop in share price, or the loss of brand value or goodwill). These damages are awarded to the victim without having to prove actual economic loss, although the size of the damages may largely depend on providing such evidence.
  2. Special Damages: Refer to directly quantifiable losses caused by the defamatory statement. For example: the cost to hire a PR team or the resultant loss of a contract.
  3. Aggravated Damages: Provide compensation for hurt feelings and mental distress. For this reason, aggravated damages are unavailable to corporations (since they can't have their feelings hurt), but are available to professionals.
  4. Punitive Damages: Intended to reprimand the author of the defamatory statement when his or her conduct is particularly malicious. They are only awarded when the combined general and aggravated damages are insufficient to serve as a deterrent or punishment for the author's conduct.

INJUNCTIONS AND SUMMARY JUDGMENT

Defamation actions necessarily raise questions on restrictions to freedom of speech. Accordingly, courts will only grant injunctions (or interim orders) to have defamatory content taken down in exceptional circumstances. Courts may grant an injunction where the target of the defamatory statement would suffer irreparable harm if an injunction were not granted. For businesses and professionals, this could mean a substantial loss of business, clientele, or goodwill that could not adequately be compensated for by a future award of damages.

Summary trials (which are a trials by written evidence only) can be a cost-effective and faster path to obtaining judgment in defamation suits. Summary trials will be available where the matter is not overly complex, the credibility of the parties is not seriously at issue and the judge can come to a decision based on the written record and documentary evidence only.

TAKEAWAYS

Defamatory content, like “fake news”, can rapidly spread online and compete with the truth in public discourse. It is therefore essential that businesses and professionals respond quickly and carefully. Below are some strategic considerations to keep in mind:

  1. Keep detailed records of the defamatory content and its impact on your business. Immediately take screenshots of the posts on all websites and platforms where it has been posted, reposted, or shared, as well as comments or responses to the content. Written records should also be kept of all customer or client inquiries regarding the content.
  2. A carefully worded demand (or ‘cease and desist') letter is an important first step that is often enough to persuade the author of the statement to take the content down without drawing further public attention.
  3. Litigation provides important redress and may be necessary where other measures fail. But there are no immediate results. It can take years before your matter is heard in trial.
  4. Tread carefully. Aggressive first steps to try to cease the defamation can sometimes draw more attention to the content than it would ordinarily have received.

About Mackrell International – Canada - Lindsay Kenney LLP is a full service business law firm with offices in Vancouver and Langley, BC and a member of Mackrell International. Mackrell International – Canada is comprised of four independent law firms in Alberta, British Columbia, Ontario and Quebec. Each firm is regionally based and well-connected in our communities, an advantage shared with our clients. With close relations amongst our Canadian member firms, we are committed to working with clients who have legal needs in multiple jurisdictions within Canada.

This article is intended to be an overview and is for informational purposes only.