Summary and implications

The Defamation Act 2013 (the Act) and the Defamation (Operators of Websites) Regulations, 2013 (the Regulations) came into force on 1 January 2014. Companies in particular will now face considerable challenges in attempting to bring a successful defamation claim. Other significant changes shift more power to defendants, attempting to move the jurisdiction of England and Wales away from its claimant friendly reputation and provide increased protection for website operators.

Key changes introduced by the Act :

  • Claimants must show "serious harm" to their reputation
  • For companies and other profit making entities, this means demonstrating actual or likely "serious financial loss"
  • New single publication rule
  • New defences, including specific defences for website operators and statements in scientific and academic journals
  • Increased protection for secondary publishers
  • Clamp down on forum shopping

Many of these changes will be welcomed, particularly by website operators, secondary publishers and other frequent defendants. However, companies may need to start exploring other avenues in an effort to preserve their reputations if defamed. Whilst companies are familiar with awards of only nominal damages in successful defamation claims, now, in the absence of demonstrable "serious financial harm", a statement that injures the reputation of a company may not be defamatory at all.

This article explains the key changes and what they might mean for parties involved in or considering launching defamation claims.

1. Serious harm and serious financial loss

In order to bring a claim for defamation it is no longer enough to show, for example, that the statement published is one that lowers the claimant in the estimation of right-thinking members of society. The claimant must now show that the publication of the statement has caused or is likely to cause serious harm to its reputation. Where the claimant is a company (or other body that trades for profit) harm to its reputation is not "serious" unless it has caused or is likely to cause serious financial loss.

It is not yet clear what level of harm will amount to "serious" harm, or what level of loss will constitute "serious financial loss". A company may face a significant challenge trying to prove to a court that first, it has suffered or is likely to suffer serious financial loss, and second, that it was the defamatory statement that caused such loss and not some other factor.

2. Single publication rule

With the advent of the internet came a new concern with defamation – the issue of multiple publications. Prior to the Act the position was that every time a web page was accessed, it constituted a new publication. Consequently, the limitation period for defamation actions (one year from the date of publication), in practice, did not apply to web pages as statements published on a web page were treated as being continually re-published.

The position is now different. Provided a subsequent publication is not "materially different" from the first publication, for the purposes of limitation any action for defamation is to be treated as having accrued on the date of first publication. In determining whether the subsequent publication is "materially different" the court may have regard to, amongst other things:

a) the level of prominence that a statement is given; and

b) the extent of the subsequent publication.

This is a welcome development, which provides greater certainty for website owners and finally brings the issue of limitation in defamation cases into the internet age.

3. Defences

The Act abolishes the common law defences of justification, fair comment and the Reynolds defence, and replaces them with a number of statutory defences. The following are now available defences to actions for defamation:

a) truth;

b) honest opinion;

c) publication on a matter of public interest;

d) peer reviewed statements in scientific or academic journals;

e) statements protected by privilege;

f) website operators are not liable for defamatory statements posted by another person (subject to the key exceptions set out below).

Website operators

Section 5 of the Act provides a new defence for website operators and the Regulations set out a procedure that must be followed by operators in order to use this defence. In summary, if an operator receives a notice of complaint (in accordance with the Act and the Regulations) the operator must, within 48 hours of receipt of the complaint, provide a copy of the complaint to the poster and request consent to the removal of the statement and/or ask for the poster's contact details and permission to pass the same to the complainant. If:

a) it is not possible to contact the poster;

b) the poster does not respond adequately within five days; or

c) the poster consents to the statement being removed,

the operator must remove the statement.

Where the operator fails to follow the procedure set out in the regulations, the defence will no longer be available. The defence will also be defeated where the claimant can show that the operator acted with malice in relation to the posting of the statement.

4. Secondary publishers

A welcome development for secondary publishers is that claims can no longer be brought against a person who was not the author, editor or publisher of the allegedly defamatory statement unless the court is satisfied that it is not reasonably practicable for action to be brought against the author, editor or publisher. Unfortunately, no further guidance has been given as to when the court will be satisfied that action is "reasonably practicable" or not. We therefore await the court's interpretation as cases are brought before it in due course.

5. Clamp down on forum shopping

As a relatively "claimant friendly" jurisdiction for defamation, overseas claimants have often sought to bring defamation claims in England and Wales even if publication here is on a small scale compared with other countries. The Act seeks to limit this forum shopping. It provides that where a potential claimant is domiciled outside of the UK, Switzerland, Iceland, Norway and any EU Member State, then the courts of England and Wales will only have jurisdiction to hear cases in circumstances where the court is satisfied that of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring the action.

Conclusion

Whilst the bulk of these changes will be welcomed, it is going to be a case of venturing into unchartered territory for those who bring the first cases before the courts, particularly where companies seek to demonstrate "serious financial loss". In the meantime, we can all watch out for new "notice of complaint" email addresses popping up on websites over the coming months.

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.