Corporate Defamation and its Aspects - A Comprehensive Guide

Dec 27, 2023

A corporation comprises many people, ideas, shareholders, and employees who create an organization. However, a corporation is often perceived as a monolith or a singular entity on a public front, creating barriers to building trust and rapport with an audience. When an audience or a consumer feels misled or underserved by the corporation's claims, they can opt to sue the company. If this causes proven and serious harm to the company's reputation, it can be called defamation. However, in Australia, no company can sue an individual for mere criticism. This rule is in place to protect the interest and rights of consumers and their claim to free speech.

What is Defamation?

Defamation refers to any act, indication, or communication that can go on to damage the reputation of a third party. This is also known as slander. Defamation is carried out through communication that can be images, gestures, written words, or statements that display a third party in a negative light or compromise its honor and dignity. Defamation can be leveled against any third party, from individuals to organizations or non-tangible entities. Each category is represented by its laws. Corporate defamation comes under the skills of corporate lawyer

How can an entity be defamed?

For a defamation action to be taken up or proceed, it is important for the individual or entity who believes they have been defamed, that is, the plaintiff, to establish three factors:

What is corporate defamation?

While any act of communication regarding a company or corporation can tarnish its reputation or honor, it may not be legally defamatory in Australia. This is because defamation threats are often used to censor criticism and jeopardize the rights of individuals and free speech. However, there are ways in which specific corporations and companies can sue for defamation.

What entities can sue for defamation?

Generally, in all Australian territories and states, companies, corporations, and organizations with a "legal personality" cannot sue for defamation. This legal personality includes trade unions, local councils, incorporated associations, etc. That being said, certain corporations meeting specific standards can sue for defamation. These corporations are known as Excluded Corporations. The following entities match the criteria for excluded corporations:

Alternatively, larger corporations, which are public entities, can sue for defamation in cases where an employee or an officer has been named in the communication and affected by it. This is valid even if the employee or officer hasn't been named but indicated in communication. For instance, when a communication of defamation has been leveled against a large company, the company can sue by proving that a specific employee or individual has been affected by the communication. This person can be a representative or the "face" of the corporation. Another alternative is for the corporation to bring up a claim of deceptive information or misleading conduct in commerce or trade. They can also bring up a claim of "injurious falsehood" or "malicious falsehood." This action includes the presentation of four factors. They are listed below:

Where can a defamation action be taken?

A defamation class action can be leveled in any Australian territory or state where the communication of potentially defamatory material was published to a third party. In the case of non-tangible material like web articles and posts, a lawsuit can be filed in any state or territory where the communication is made readable or downloadable. The location of the website domain itself is not relevant. It is important to choose lawyers and representatives based on the location; for instance, a defamation case relevant to Adelaide will benefit from being represented by corporate lawyers Adelaide.

What is the period for filing a defamation action?

A defamation class action must be filed within the next twelve months of the publication of the defamatory communication. In case the plaintiff can authenticate that it was not feasible for them to proceed with a lawsuit before the completion of the designated 12 months, then the court may extend the period to three years. Other instances of extension include the plaintiff being unaware of the publication of the communication until after 12 months of publication. An extension is also possible if the publisher of the communication is unidentifiable. In any case, delaying a defamation lawsuit is not advisable.

Conclusion

Corporate defamation is an extremely challenging territory with many odds that lawyers must be thorough and knowledgeable about the company, the state, and the law. We recommend the best legal counselor in Australia to our clients to ensure the protection of their rights. Find the best corporate lawyers in Perth with us to represent your corporation and entrust your dignity to the best hands.