A corporation's rights under the new defamation laws.

* What can a corporation do if faced with someone making public statements that could damage the business's reputation and goodwill?

* Effects of the new uniform defamation legislation

Introduction

The new defamation legislation enacted in the Australian states and territories significantly curtails the availability of a claim of defamation for corporations. As defamation remains relevant for some corporations, this article considers that cause of action from a corporation's perspective but also identifies, by reference to some hypothetical scenarios, the other causes of action which may be available to corporations when faced with a person making public statements liable to damage the business's reputation and goodwill.

New defamation legislation

On 1 January 2006, new defamation legislation came into operation in each of the Australian states (1). The new state acts apply to the publication of defamatory matter after 1 January 2006. (2) The new legislation repeals and replaces the previous acts in each of the states. (3) The Australian Capital Territory (4) and the Northern Territory (5) have similarly enacted new legislation. The new legislation does not affect the operation of the general law in relation to the tort of defamation except to the extent that the legislation provides otherwise. What the acts do provide for, however, is a significant curtailment of the rights of corporations to sue for defamation. (6) Section 9 of the Defamation Act 2005 (NSW) illustrates the position, providing as follows (each of the new acts in the states and territories has an identical provision (7))

(1) A corporation has no cause of action for defamation in relation to the publication of defamatory matter about the corporation unless it was an excluded corporation at the time of the publication.

(2) A corporation is an excluded corporation if:

(a) the objects for which it is formed do not include obtaining a financial gain for its members or corporators, or

(b) it employs fewer than 10 persons and is not related to another corporation, and the corporation is not a public body.

(3) In counting employees for the purposes of subsection (2)(b), part-time employees are to be taken into account as an appropriate fraction of a full-time equivalent.