Helping You Navigate Defamation Claims: Protecting Your Small Business and Reputation
Defamation can significantly impact your business, especially when you're working hard to build your reputation and client base. Small businesses, in particular, face unique challenges when it comes to defamation claims—whether the defamatory remarks target your company or you personally as a director or owner. Let’s explore how we assist our clients in navigating these challenges, particularly under the Defamation Act 2013, and help them overcome some of the legal hurdles they may face.
Defamation against a small company
If you're a small business owner and your company is defamed, it's important to understand that UK law treats corporate defamation differently from personal defamation. Under the Defamation Act 2013, companies that are registered with Companies House (such as limited companies) must prove that the defamatory statement has caused, or is likely to cause, serious financial loss. This can be difficult for smaller businesses, where financial losses may not be immediately obvious or easy to measure.
Additionally, proving these losses through forensic accounting can be costly and disproportionate for many small businesses. This is where we help you get around these hurdles. We advise our clients to take proactive steps to document how defamatory statements are impacting their business. One of the most effective ways is to enquire directly with your customers or potential customers, especially those who have rejected your services after encountering defamatory content online. Ask them for feedback on why they chose not to engage and keep a clear record of their responses. This documentation can serve as evidence that, even if no immediate financial loss has occurred, serious financial harm is likely to occur in the future. This helps strengthen your claim when the losses aren’t yet fully realised.
How to get around the requirement of proving serious financial harm
It’s also important to remember that not all businesses are required to prove serious financial harm under the Defamation Act. If you're a sole trader or a partnership, you’re not subject to the same strict financial loss threshold as incorporated companies. For these businesses, a defamation claim can focus on reputational damage, which is often easier to demonstrate. For incorporated businesses, we work with you to explore a dual approach, particularly if the defamatory statements impact both your business and you personally as the owner or director. Small businesses often rely heavily on their owner’s or director’s personal reputation. In such cases, defamatory remarks aimed at the company can easily be interpreted as targeting the individual behind it.
Even if the owner of the business isn’t mentioned specifically in the defamatory posts, the reputational damage falls on his or her shoulders anyway. This is significant because it may allow the sole trader or small business owner to claim that it is his or her reputation being harmed when the business is targeted. For example, if there are false claims that the business is involved in financial wrongdoing, the implication is that either the small business owner is turning a blind eye or that he or she is directly responsible for what is falsely attributed to them in the defamatory posts.
In situations like this, we help clients pursue both personal and corporate defamation claims. This allows the company to claim compensation for financial loss while the individual addresses damage to their personal reputation. This dual strategy is particularly effective for smaller, closely-held companies—especially those where the owner or director is the public face of the business. By bringing claims on behalf of both the company and the individual, we help ensure that both financial and reputational harm are covered.
Defamation against an individual
When defamatory statements affect you personally, the Defamation Act 2013 requires that you show the statement caused serious harm to your reputation. Unlike defamation claims brought by companies, individuals don’t need to prove financial loss—reputational harm alone is enough. For small business owners, this can be particularly important. If defamatory remarks target both the business and its leadership, it makes sense to file personal and corporate claims. For example, if defamatory remarks imply that your business is fraudulent or dishonest, they likely harm your personal reputation as well. In these cases, we recommend filing both types of claims to fully protect your interests. This ensures that you address both personal reputational damage and any financial harm to the business.
Malicious falsehood: another tool we use to protect you
Sometimes, proving serious financial loss or reputational harm in a defamation claim can be challenging. When this happens, another tool we use to protect our clients is the malicious falsehood claim. Malicious falsehood is similar to defamation, but there are key differences that can make it a more straightforward route to getting compensation. With malicious falsehood, we don’t need to prove damage to your reputation. Instead, we focus on showing that the statement was false, made maliciously (with the intent to harm or with reckless disregard for the truth), and that it caused, or is likely to cause, financial harm.
One of the key advantages of malicious falsehood claims is that recent case law has made it easier to establish financial loss. In 2022, the Court of Appeal ruled that courts can take a "forward-looking" approach when assessing financial loss in these claims. This means that even if no actual loss has been suffered yet, we can show that it’s objectively likely that financial losses will occur in the future as a natural consequence of the false statement. This allows us to seek compensation for future losses, even if the full financial impact hasn’t hit your business yet. By using this strategy, we provide an additional layer of protection, especially when proving immediate financial harm is difficult.
Our strategies for small businesses: protecting both you and your company
To protect your business and reputation from defamatory statements, we take a strategic and proactive approach. First, we encourage all our clients to document their interactions with clients and potential customers, especially those who have rejected your services after encountering defamatory content. Every lost opportunity is important, and tracking the reasons behind these losses can be critical in building your case. In smaller businesses, where the owner’s reputation is closely tied to the company, we help clients file both personal and corporate defamation claims.
By doing this, you can address the financial damage to the business while also protecting your personal reputation. This dual approach offers comprehensive protection and ensures that no aspect of the defamation goes unaddressed. If proving serious financial loss is difficult in a defamation case, we’ll explore malicious falsehood claims as a strategic alternative. With a focus on the falsehood and malice behind the statement, rather than reputational harm, malicious falsehood claims offer a more flexible way to prove financial damage. The courts’ forward-looking approach makes it easier to seek compensation for future financial losses, so you don’t have to wait for the full damage to unfold before taking action.
Future protection for your business against online defamation
Once we've helped clear up a defamation issue, it’s important to stay proactive in safeguarding your business from future attacks. As part of our ongoing commitment to our clients, we offer a monitoring service for a small monthly retainer. This service involves continuously monitoring social media and online platforms for any potential defamatory statements related to your business. If we identify any suspected defamation online, we act immediately. We will review the situation and deal with it on your behalf, whether that means issuing takedown requests, engaging with platform administrators, or taking legal action when necessary. With our monitoring service, you can focus on running your business without the constant worry of potential reputational damage from online defamation. We understand how quickly false statements can spread across the internet, and we know that acting quickly is key to minimising the damage. Our proactive approach ensures that we stay on top of any online defamation, handling issues as they arise and preventing small incidents from escalating into larger problems. This service provides ongoing protection for your reputation, allowing you to concentrate on growth without the distraction of dealing with defamation issues on your own. By working with us, you’ll have a dedicated partner who will help you handle defamation challenges as well as support you in keeping your business’s reputation safe from future threats. Whether it’s through ongoing monitoring or immediate action when defamation occurs, we’ve got your back—so you can focus on what you do best.