Injurious falsehood

Injurious falsehood protects people and businesses from suffering economic loss caused by false and malicious statements made about them.

Historically, injurious falsehood existed as a cause of action when a business made publications that harmed another rival business. Prior to the introduction of the Defamation Act 2005 (Qld) (the Act), injurious falsehood was a seldom used cause of action, as a party who had suffered loss as a result of a false publication would primarily pursue a cause of action in defamation (previously libel and slander).

Since 2006, and in response to the development of social media, injurious falsehood has re-emerged, and cases alleging injurious falsehood are becoming more prominent.

Estimated reading time: 5 minutes

Difference between injurious falsehood and defamation

Injurious falsehood resembles defamation, as both involve a false and harmful accusation about the plaintiff that has been communicated to a third party.[1] However, they differ in that defamation protects someone’s personal reputation, while injurious falsehood protects a person’s interest in property, products or business.[2]

The impact of the Act on injurious falsehood lies in section 9, which limits a cause of action for defamation to individuals and companies with fewer than 10  employees. Corporate entities who employ 10 or more people therefore usually rely on injurious falsehood.

Another key distinction between the two causes of action is that a party suing for injurious falsehood has the additional burden of establishing that the defamatory statement was made maliciously, and that it caused actual damage.

Elements of injurious falsehood

The elements of injurious falsehood are as follows:

1. A false statement of or concerning the plaintiff’s goods or business

The defendant must have made a false statement concerning the plaintiff’s goods or business. The falsity of the statement is a question of fact to be determined objectively. Similarly, it will be an issue of construction as to whether the statement referred to the plaintiff’s goods or business.

2. Publication of statement by the defendant to a third person

The publication of the defendant’s statement must have been communicated to a third party. It is not sufficient that the statement was communicated only from the defendant to the plaintiff, nor does the element of publication require that the statement be broadly disseminated.

“Publication” can occur orally or in writing and need only be communicated to at least one third party. Recent case law relating to defamation has had an impact on the correct interpretation of who the “publisher” is (i.e. the party that has actually ”published” the defamatory matter).

A party who has control of a website or search engine may be liable as a secondary publisher.[3] This extends to an administrator of a Facebook page, or even a party making a post on social media that is not in itself defamatory, but the post allows other parties to publish further statements that lead to the other elements of injurious falsehood being satisfied.[4]

3. Malice on the part of the defendant

Malice is established either by showing the existence of some indirect, dishonest or improper motive or by showing an intent to injure without just cause or excuse.[5] It may also be possible to establish malice simply by demonstrating that the publisher knew that, as a result of the publication, the plaintiff was likely to suffer financial harm.[6]

4. Actual damage

Actual damage must be distinguished from potential or future damage and may include things such as loss of business or sales. The damage must be caused by the publication.

Victims of injurious falsehood will primarily seek injunctive relief to prevent the publication of further statements pending the trial of the matter (i.e. seek a court order compelling the defendant to remove/stop publishing the defamatory matter).

In seeking an injunction, the court is sometimes willing to allow proof that damages are reasonably probable in awarding an injunction as opposed to demanding proof that the plaintiff has suffered actual damages.[7]

However, in order to recover damages for injurious falsehood, actual damage must be proved.

Frequently Asked Questions

Key differences between injurious falsehood and defamation

While injurious falsehood and defamation are easy to confuse, there are some key differences.
 
The main difference between the two is that defamation is limited to causes of action by individuals and companies with fewer than 10 employees whereas injurious falsehood is an action available to both individuals and all companies, regardless of their size. Injurious falsehood is also more concerned with economic loss rather than reputational damage.

How do you prove injurious falsehood?

Injurious falsehood has four elements:
1.     A false statement made by a person about another’s business or goods;
2.     This statement was published to a third party;
3.     There must be malice by the person who made the statement; and,
4.     There must be actual damage as a direct result of this.
 
Injurious falsehood has higher barriers than defamation and is harder to prove.

What is an example of injurious falsehood?

For example, if A hated B and out of anger sent an email containing false statements about B’s business to B’s customers, there is a chance that B would have a case for injurious falsehood against A because A clearly intended to damage B’s business.  Actual damage would need to be proved to recover damages.

If your company has suffered loss and damage as a result of defamatory publications, contact Gibbs Wright Litigation Lawyers today for a free, no-obligation consultation.

Read more about defamation law here.

References


  1. Quinlivan v Konowalous & Ors [2019] QSC 285 [41]. ↩︎
  2. Ibid. ↩︎
  3. Google Inc v Duffy [2017] SASCFC 130. ↩︎
  4. Bruder Expedition Pty Ltd v Leigh [2019] QDC 266. ↩︎
  5. Palmer Bruyn & Parker v Parsons (2001) 208 CLR 388, 425. ↩︎
  6. Above n5. ↩︎
  7. Keith Arthur Bradley & Anor v Min Li Wu [2013] ACTSC 67. ↩︎