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Business Defamation Lawyers in Sydney

Disputes

False information that is published with the intent of harming a business can have devastating consequences on revenue, employment and retention capacities, and the personal wellbeing of staff.

If reputational harm is already affecting your business, then it is crucial that you seek timely legal advice.
Business defamation law exists to protect businesses against untrue, publicised statements that could damage its reputation. Our experienced business defamation lawyers work with organisations who have suffered from defamation in business. If you suspect that your business has been defamed, or are looking for further resources about business defamation, please get in touch with our team.

What is Business Defamation?

Business defamation occurs when someone publishes a false statement intended to harm a business’s reputation. 

In broad terms, Section 9 of the Defamation Act 2005 (NSW) generally prohibits companies from suing for defamation. It should be noted that this rule does not exclude employees within or associated with a corporation from seeking legal action for personal defamation, even if the defamation simultaneously targeted their business.

There are exceptions to the rule that prohibits companies from suing in defamation.

Companies that are ‘excluded corporations’, as defined by the Defamation Act, can sue if defamatory material targeting their reputation is published.

Companies that cannot be categorised as ‘excluded corporations’ may still be able to take legal action if defamatory material is published. In this instance, the civil tort of injurious falsehood can be claimed. Injurious falsehood is generally more difficult to prove than defamation, as it must be accompanied by four specific elements, including proof that the defamatory material caused actual damage (i.e. a loss of money).

Why Your Business’ Reputation is So Important

A business’ success is tied to its reputation. When a business’ reputation is strong, the following benefits can arise:

  • Attracting new customers and maintaining existing ones
  • Increased business opportunities and networks
  • Staff retainment and recruitment
  • Public recognition of reliable and quality goods and services.

Limitations of Business Defamation

The Defamation Act 2005 (NSW) restricts the rights of corporations to sue in defamation. Even when a corporation is allowed to sue, there are still certain limitations that exist.

Time limits

According to the Limitation Act 1969 (NSW), court proceedings that allege defamation must begin within one year of the alleged defamatory incident. In specific instances, a party can apply to the Court for an extension of time to commence proceedings. The maximum time extension that can be granted by the Court is three years following the alleged defamatory comment’s publication date.

True statements and honest opinions

True statements are not considered defamatory, as defamatory statements are by their nature false.

Opinions are difficult to categorise as true or false as they are inherently subjective. The defence of honest opinion, as addressed in section 31 of the Defamation Act NSW, means that statements are not defamatory if the following three factors apply:

  • The communication is an expression of opinion rather than a factual statement, and
  • The opinion relates to a matter of public interest, and
  • The opinion is based on proper material.

Companies not considered an “excluded corporation”

Only certain companies are allowed to take legal action for defamation. These companies are called “excluded corporations”, as they are excluded from the general rule of the Defamation Act that prohibits companies from taking legal action for defamation.

What is an “excluded corporation”?

Excluded corporations are the only type of business that may be able to sue for business defamation.

An excluded corporation is a corporation that meets the following two specifications: 

  1. The corporation is independent and not related to any other corporation; and
  2. The corporation has less than 10 full time employees

Not-for-profit corporations are also considered excluded corporations.

Business Defamation Case Example

Six months following the publishing of a defamatory review in the Sydney Morning Herald, three restaurateurs were forced to close their Darling Harbour Restaurant, Coco Roco. After the review had been published in September 2003, the restaurant experienced a dramatic decline in customers. The three former restaurateurs took the Sydney Morning Herald to court for defamation, where the case ended up in the Supreme Court. 

Ultimately, the three individuals were awarded over $600 000 in damages.

Who We Help

Our business defamation lawyers have experience in helping both small and large corporations navigate the aftereffects of defamation in business. Due to the complicated nature of business defamation law, the pathway to justice will vary according to the size and structure of the business. 

However, even if a business cannot sue in defamation, there are still legal avenues available.
For more information about how your business can manage defamation, contact us today to speak to an experienced member of our business defamation team.

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Protecting your reputation starts with simplifying the complex. This handy checklist should quickly point you in the right direction and help you understand whether you have a case, and where to start to secure the best possible outocme.