The new defamation regime Article icon

The Macfarlanes' partner Geoff Steward and solicitor Alice Manisty explain what options exist before calling a lawyer

The law on defamation has changed, which means that the steps companies need to take to protect themselves in the wake of a defamation crisis have also changed. While building on previous legislation, the Defamation Act 2013, which came into force on 1 January, now puts the onus on a claimant to prove that a defamatory statement has caused 'serious harm' while website operators that host user-generated comment, even if defamatory, have new levels of protection.

A defamatory statement about your company appears on Facebook. Within hours, it is repeated on social media forums across the world. The company's share price is in free fall. Journalists are calling seeking comment. What does a good corporate communicator do? Obviously, every defamation crisis is different but a good first step to take is:

1. Prove that it's serious

If you are going to pursue a successful claim for defamation, you need to show that the words that you are complaining about fit a number of criteria, so gather evidence for this. You need to show that the words are

• Defamatory

• Identify or refer to you

• Are published to a third party by the person or company that you are claiming against

However, even if you can prove these three things, the new Defamation Act has brought in a key provision: the claimant's reputation has been caused or is likely to be caused 'serious harm' as a direct result of publication of the alleged defamatory words. For a company that trades for profit, this means proving the alleged defamation has caused 'serious financial loss' in order to prove serious harm.

This new provision makes it much harder to make a claim for defamation. Without serious harm, the courts will reject your claim. And yet the Act offers no guidance to clarify how either an individual or a company would prove serious harm. Until guidance becomes available, it is advisable to gather effective evidence in the form of documents and data as soon as a crisis emerges.

For example, as soon as you become aware of a potentially defamatory comment/article/posting, you should set up an evidence log which includes:

• details of customer complaints or concerns following publication;

• the total value of any order cancellations/return of goods since publication;

• any noticeable decline in business/profits;

• hardcopy and/or online commentary on the defamatory statement showing decreasing trust or respect for you or your brand/organisation;

• share price fluctuation data; and

• expenses incurred (including a full record of management time) in mitigating the potential damage to you or your organisation's reputation.

Crises happen when least expected, so it is best to have a crisis plan in place to cover defamation that includes the previous steps. As the crisis develops, revisit the plan and the evidence. For example, a statement perceived as defamatory may not result in 'serious harm' when first published. But this situation can change as it is republished to a wider audience.

Even if you successfully get an article removed from a website, there may still be a record in online archives or websites of foreign editions of a particular newspaper. Keep an eye out after the resolution of the dispute to ensure that all statements have been removed.

The new Act has introduced a rule that prevents an action being brought in relation to the publication of the same material by the same publisher at any time after one year from the date of the first publication, which cuts down the time during which you can issue proceedings.

2. Know your enemy

Even if you can establish that 'serious' harm is or is likely to result from the publication of the statement, you can only start defamation proceedings where you are able to identify its author through a company name or an individual's name and address. Identifying the defendant is therefore key, and should be done as soon as possible.

It is often easier to identify the author when a statement appears in a hard copy publication, such as a flyer or newspaper. Keeping an up-to-date contact list of organisations who may have published statements in the past about you or your organisation or are active in your industry can save valuable time.

However, in the digital arena of blogging and tweeting, it can be much more difficult to identify the actual author of a statement. The new Defamation Act also makes it difficult to bring proceedings against the operator, such as Twitter or Facebook, on whose website a defamatory statement was posted. If the website hosting the contentious user-generated content can show that it did not post the statement, it has a complete defence against defamation.

But there are ways around this. You can challenge this defence if you can show that it is not possible to identify the person posting the statement, you give the website operator a complaint statement that complies with new requirements, set out in Defamation (Operators of Websites) Regulations 2013, which accompanied the new Act, and the operator does not respond correctly.

In order to challenge online comments, you must send a complaint and 'take down' notice to the website operator that explains why the statement is defamatory and whether you are willing for the person who posted it to be made aware of your identity. However, if the website operator cannot identify the author, it must remove the statement within 48 hours of receiving the notice if it wants to be able to mount a defence. If there are multiple authors, then send complaints and take down notices relating to each statement. However, if there is just one author who has posted multiple times, then it is possible to send one complaint and take down notice to the operator which points to each alleged defamatory statement and its location on the website.

It is worthwhile preparing a template complaint notice that can be circulated once you anticipate defamation proceedings but cannot identify the statement's author. You must also ensure that you receive confirmation, such as an email read receipt, that the complaint has been received by the operator. The Ministry of Justice recommends that website operators provide templates or online forms for complaints, so check for these before sending your notice. Include a copy of the pertinent provisions of the Act and Regulations to counter any suggestion from the website operator that your notice is deficient.

3. 'No comment'

Excellent public relations make all the difference when dealing with a defamation crisis, especially when the team works with legal advisers to ensure everyone is kept informed. If you don't have one, consider appointing an agency with defamation experience to ensure that you are fully prepared. The PR team needs to be available 24/7, and completely briefed. It should help handle all external enquiries, and monitor print, digital and social media sites which may repeat or comment on a defamatory statement. Employees need to be kept in the loop. They may be contacted by a media outlet for a comment, and so need the contact details of somebody within the company who can handle that. The entire organisation should be briefed on the details of a crisis and an agreed comment worked out if one is required.

In conclusion, acting swiftly and efficiently once a potentially defamatory statement has been published can make the difference between protecting your corporate reputation and a fall from grace. Evidence gathering, prompt correspondence and effective PR managers acting in a joined-up way with your lawyers, will help to prove 'serious harm', identify a potential defendant and control the crisis both internally and externally.