Defamation Act becomes law, establishes new statutory defences against libel

The Defamation Act 2013 creates a new statutory defence for publishers to claim that allegedly defamatory statements constituted, or "formed part of", comments "on a matter of public interest" and that they "reasonably believed that publishing the statement complained of was in the public interest".

The Act has set into law a broad equivalent to the common law 'Reynolds defence' for 'responsible journalism' that has been available to publishers since it was established by the House of Lords in a case between former Irish Prime Minister Albert Reynolds and the Times Newspapers Ltd in 2001.

Under the Defamation Act, a statement can be said to be defamatory if its publication "caused or is likely to cause serious harm" to individuals' or businesses' reputation. However, only if businesses have suffered, or are likely to suffer, "serious financial loss", can they bring a claim of defamation against commentators.

The authors of defamatory comments can avoid becoming liable for damages if they can show "that the imputation conveyed by the statement complained of is substantially true" or, if the comments took the form of an opinion, that the opinion is one which "an honest person could have held the basis of any fact which existed at the time the statement complained of was published; anything asserted to be a fact in a privileged statement published before the statement complained of".

Authors shown not to have held the opinion themselves will lose their right to rely on this 'honest opinion' defence.

"The law of defamation has now swung too far in favour of protecting people who make statements that could injure the reputation of others as it will be very difficult indeed for a company to get over the hurdle of proving serious financial loss," litigation expert Nicola Bradfield of Pinsent Masons, the law firm behind Out-Law.com, said.

"Freedom of speech had already been advanced by the emergence of the principle of qualified privilege which permitted statements that were capable of having a defamatory meaning to be published as long as that publication was in the public interest and the author could show that the steps taken to gather and publish the information were responsible and fair. This test focussed on the quality of the story and protected 'responsible journalism'," she said.

"My concern is that the financial threshold test switches the focus away from the story and onto financial considerations. This is likely to lead to the publication of more false and misleading statements and that is not in anyone’s interest," Bradfield added.

Amongst the other reforms included under the Act are new rules affecting how operators of websites will have to respond when it is claimed that they are liable for defamation as a result of material posted on their sites.

Under the Act website operators can be pursued by those who claim they have been defamed as a result of comments on their site even if they are not the author of those comments. If authors cannot be identified by those allegedly defamed, website operators could become liable for the comments if they fail to respond in accordance with new regulations which have yet to be drafted which will set out the actions they must take when notified of the existence of defamatory complaints on their site.

Website operators will, however, be unable to be pursued for defamation purely on the basis that they act as a moderator of comments on their site. Previously, if website operators had 'actual knowledge' of defamatory comments they could be said to be liable for them.