Malicious falsehood – a weapon worth remembering in the social media world

Introduction

So dreaded slander—

Whose whisper o’er the world’s diameter,

As level as the cannon to his blank,

Transports the poisoned shot

Hamlet Act 4 Scene 1

Shakespeare putting words into the mouth of Claudius, saw slander as a weapon capable of finding its mark even half way round the world. Now, with instant international communication across social media, those sentiments have become literally as well as metaphorically true. Hardly a day passes without some celebrity (or world leader) shooting from the hip on social media and having their views subjected to microscopic and critical analysis. And companies increasingly use social media as a way of seeking to promote themselves at the expense of their competitors. But are there any limits and restrictions on the trolling and nastiness that can be published?

The reader will probably already be familiar with the general concepts of defamation, normally divided in English law into the tort of slander, (the transitory utterance of a harmful untruth) and its bigger brother, libel, which manifests itself in permanent published form, and where damage does not need to be specifically proved because it is assumed. But among these torts, is a lesser known species- malicious falsehood, which arises where a defendant makes a false statement specifically designed to injure the business or trade of another party.

At a glance

The tort of malicious falsehood, also referred to as injurious falsehood, slander of goods and trade libel, provides protection against false statements that are damaging to one’s reputation or business.

Like the tort of passing-off, it is considered a protection against what the continental legal systems generally refer to as “unfair competition”, meaning that it is a legal tool used to protect one’s economic interests against the unfair encroachments of another. Malicious falsehood is considered an alternative to a claim in defamation.

Requirements for establishing the tort

To establish malicious falsehood, the claimant must proof three elements: misrepresentation, damage and malice.

The misrepresentation must relate to the claimant and/or the claimant’s products or business and must be objectively false. The single meaning rule (for which see post) does not apply to the criterion of falsity. It is sufficient if the defendant’s misrepresentation is false to a substantial number of people.

The damage must be of monetary nature (loss of trade or any other damage that can be financially quantified), as opposed to damage to the claimant’s reputation, which is a requirement for defamation.

So much for the advantages. But there are difficulties as well. The threshold for proving that the statement was made with “malice” is quite high. The misrepresentation has to be committed with the desire to injure and that desire must be the dominant purpose of the defendant’s misrepresentation. Further, malice is held to be absent if the defendant is acting in honest belief, with a sense of duty or in protection of a legitimate interest.

Malicious falsehood and passing off

A claim for malicious falsehood may be brought at the same time as a passing-off claim or as an alternative plea. The difference between these two torts lies within the misrepresentation caused by the defendant.

In the case of passing off, the defendant unfairly misrepresents itself, its good or its business, appropriating a benefit which belongs to the claimant, such as presenting his own goods as the goods of the claimant. The classic example of passing off is the “Jif lemon case”[1]. The claimant was the maker of lemon juice sold in a plastic bottle of distinctive shape (like a lemon, with a small cap). The defendant marketed a rival product using a similar get up. It was held that, by doing so, it had unfairly interfered in the goodwill attaching to the claimant’s trade dress and had created a misrepresentation to the relevant public that there was a link in the course of trade between the Claimant’s and Defendant’s goods, contrary to fact. For passing off, there is no need to show that the Defendant intended to injure: an innocent misrepresentation will suffice

In comparison, malicious falsehood applies where the defendant misrepresents the claimant and/or the claimant’s goods or business. One of the better examples is the case of DSG Retail Limited v Comet Group plc[2]. The facts were that Comet released a series of promotional advertisements maliciously and falsely claiming that its prices were lower than those of Currys, contrary to fact. The Court held that the statements were aimed at the Claimant, were untrue and had been deliberately designed to deflect trade away from the Claimant. An injunction was granted accordingly.

Another good example, of malicious falsehood in comparative advertisement context dated back to the mid 80’s and involved those giants of fast food, Burger King and McDonalds[3]. Burger King promoted an advertising campaign under the headline “It’s not just Big, Mac” which continued “unlike some burgers, it’s 100 per cent pure beef flame grilled, never fried, with a unique choice of toppings”. However, as a note of caution to the litigious, McDonalds brought the case under both passing off and malicious falsehood. As it turned out, McDonalds succeeded on the claim of passing off (based on the premise that the public might be confused as to where they could purchase a Big Mac), but failed on the question of malicious falsehood, because the relevant reference could not be proved to be uniquely intended to damage its business. Puffery, even when damaging to competitors, is usually considered not to be serious enough.

Malicious falsehood and defamation

An action in malicious falsehood can be a strategic alternative to a claim in defamation, especially if one would like to avoid the so called “single meaning rule”. This rule requires the Court to find the single or right meaning of the representation complained of, which is the meaning of it to the ordinary reasonable person. It also allows one to avoid having to proof damage to reputation and establishing that the representation is defamatory.

Concluding comments

Malicious falsehood may sound a rather antiquated legal claim, but it has never been more relevant than in today’s business environment. Although it has some peculiarities which can make it difficult to establish, it remains only an occasionally successful tool, it is as well for advertisers to be reminded that there are legal limits to the claims that they can make against competitors.

[1] Reckitt & Colman v Borden Inc [1990] 1 All ER 873

[2] [2002] All ER (D) 112

[3] McDonald’s Hamburgers Limited v Burger King CA [1986] FSR 45