Businesses can live and die by their reputations. A commercial enterprise can spend decades building a reputation as a trustworthy provider of quality goods or services. Although robust competition is a fundamental aspect of doing business, some people will resort to illegitimate tactics against a rival, such as spreading falsehoods that can greatly harm a company’s standing among customers, suppliers and vendors and lead to severe financial losses. This is called business defamation. Just like an individual, a business can take legal action if its reputation has been hurt by false statements.
If certain requirements are met, a business that claims to be a victim of defamation can sue the offender and collect damages for loss of reputation. The risk of a lawsuit serves as a deterrent to making false statements. However, there are still people who ignore the risk and defame otherwise innocent companies.
Business defamation cases have stringent requirements and complex legal hurdles. In most jurisdictions, the elements of a lawsuit include:
Business defamation cases are difficult to win. The legal burden of proof is heavy because of the need to show knowledge of falsity, which is a higher standard than simple negligence. Also, to make a claim, the victim must identify the person who made the false statements or caused them to be published. This can be challenging, as people can post statements on the internet anonymously or use fake identities. In addition, proving damages gets complicated. The concept of reputation is inherently subjective and putting a monetary figure on damages is not an exact science.
Business defamation is just one of several ways of seeking redress for business injuries. Many jurisdictions recognize causes of action for tortious interference, unfair trade practices and fraudulent misrepresentation, among others. The elements and requirements for these cases vary. A highly qualified business litigation attorney can advise your company about the legal remedies available in your situation.
Hemmer DeFrank Wessels, PLLC is a full service business law firm based in Fort Mitchell, Kentucky. Our multi-state practice serves entrepreneurs, professionals and commercial enterprises in a wide variety of matters. Feel free to contact us online or call 859-344-1188 for a phone consultation.