A Company’s Right to Sue for Defamation: A Reappraisal

The purpose of the law of defamation is the protection of reputation. While exhaustive accounts have been given of what constitutes a defamatory statement, the concept of reputation itself has long been neglected until relatively recently. Indeed, the concept of reputation was given so much importance by the common law that it afforded to plaintiffs a number of special rules in contrast to the rest of tort law. These rules included a presumption of falsity in that the plaintiff need not prove the falsity of the statement complained of and a presumption of damage whereby the plaintiff need not prove any damage. These common law rules are retained under the recently enacted Defamation Act 2009. However, section 12 of the 2009 Act provides that a body corporate may bring an action in defamation, with the provisions of the Act applying to a body corporate as they apply to a natural person. Therefore, all the special rules afforded to natural persons apply to a body corporate, including the rule that a body corporate may bring a claim whether or not it has incurred or is likely to incur financial loss as a result of the publication of a defamatory statement. Section 12 of the 2009 Act reflects the common law rule that an incorporated body may bring an action in defamation without proof of special damages. This paper will argue that the common law basis for this right is fundamentally flawed. This paper will demonstrate that the common law has failed to construct a principled concept of reputation which justifies the various rules under the law of defamation; and that the extension of the right to sue in defamation to an incorporated body was unprincipled. In a seminal paper by Professor Robert C. Post, “The Social Foundations of Defamation Law”, three concepts of reputation were presented to explain the law of defamation: reputation as property, reputation as honour, and reputation as dignity. Developing upon the various concepts of reputation expounded by Professor Post, it is argued that the concept of reputation as dignity is the most appropriate principle. It follows from the concept of reputation as dignity that the right to sue in defamation should not extend to corporations; that it is the exclusive preserve of natural persons. Thus the common law which formed the basis for section 12 of the 2009 Act is incorrect in principle and should not have been followed. Furthermore, it is argued that section 12 may be constitutionally suspect. Two arguments are put forward: (i) a concept of reputation based on the dignity of the individual derived from the constitutional right to a good name contained in Article 40.3.3° is suggested which would exclude incorporated bodies; and (ii) that the extension of the right to sue in defamation to incorporated bodies is a disproportionate interference with freedom of expression given that corporations may protect their property through various torts such as malicious falsehood