Effects Of The New Defamation Act Upon Commercial Corporations

2357 words - 9 pages

The ‘long-standing’ legal principle under which commercial corporations could acquire a remedy against a defamatory act should, in the view of Lord Scott, have been left untouched. In support of this view, the new Defamation Act, which asks for corporations to prove ‘serious financial loss’ in order for a claim to be brought before the court, does appear to restrict corporations’ abilities to defend their reputation, which is of clear value to them. In addition, it has been suggested that the new act contravenes Article 1 of the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, with respect to corporations. Notwithstanding this, it has been observed that the previous act did not offer sufficient protection to individuals’ Human Rights under the European Convention. Most importantly were the Right to Freedom of Expression and the Right to a Fair Trial. This essay will explore these issues, with the aim of showing that the new Defamation Act is a step in the right direction with regards to balancing the rights of corporations and individuals in defamation proceedings.
Firstly, it is clear that a corporation’s reputation has value in the marketplace. Robert Post argued that there in the law of defamation there are three main concepts of reputation; property, honour and dignity. Whereas dignity is an overarching concept - more concerned with rights. ‘Honour’, according to Post, is more concerned with the status of a party. It has limited application to corporations that trade for profit. Furthermore, it is not really applicable to individuals unless they are from an ‘upper-class’ background, or provide a civil service – such as a politicians. For these reasons, this essay will discuss existence of reputation as property and dignity together; the ‘honour’ concept shall be examined separately. Post said that the reputation as ‘property’ applies mostly to corporate entities, seeing as their reputation exists as an asset rather than a social concept. For commercial corporations, reputation is ‘intangible property akin to goodwill’ - something which is ‘earned’. As ‘legal persons’, corporations have a right to enjoy ‘their possessions’ under Article 1 of the Protocol to the Convention for the Protection of Human Rights; reputation can be viewed as one such possession. Support for this can be found in The Metropolitan Saloon Omnibus Company (Limited) v Hawkins, in which Pollock CB stated that a corporation might bring “action for a libel by which its property is injured”. If we are to side with Post’s view of reputation as property then it stands to reason that corporations should be fully entitled to protect their reputation. Arguably, having to prove ‘serious financial loss’ under the new act curbs trading corporations’ rights to defend their reputations, which they were otherwise entitled to do so previously. One may question whether this is justifiable.
However, it would appear from Post’s concept of...

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