Most people think of defamation as saying or writing something that unfairly damages an individual’s reputation. However, business defamation is a common occurrence that can have real-life consequences for companies.
If someone libels or slanders your business, it could cause reputational damage and financial losses for your organization. This action is also known as trade disparagement. What rights and options does your company have?
The New York business lawyers of Rosenbaum & Taylor take a look.
What Is Defamation Generally?
Defamation is the act of damaging the reputation of a person or business. It is divided into two broad categories: slander and libel. Slander means saying something defamatory, while libel means writing and publishing it.
What Is Business Defamation?
It is possible to defame a business in two specific ways. One is to slander or libel the company itself. Another is to slander or libel the business owner, a top executive, or an important employee. Either of these can have disastrous repercussions for the company.
New York business lawyers understand how critical a company’s reputation is, especially in the digital age. Bad news travels fast and can sink a company in less than a day. Defamation against a business is known in New York as trade disparagement.
Legal Remedies for Business Defamation
Companies should be encouraged to engage in healthy competition with one another. But deliberately attempting to wreck a company’s reputation with lies is not healthy. This sort of unfair trade behavior can result in substantial economic loss.
If someone makes false statements to discredit a business, New York defamation law gives companies the right to seek financial compensation in a business defamation claim.
If you win the defamation lawsuit, the defendant must pay financial compensation for the financial loss caused by the defamatory statements. In some cases, the court may order the defendant to pay punitive damages to punish their behavior and discourage others from similar actions.
Elements of a Business Defamation Claim
To prove trade disparagement or defamation of a business, several factors are required in New York.
The plaintiff must prove that the defendant made a false statement. The defamatory statement itself must be public and intended for others to hear. This is sometimes known as publishing a statement.
The statement must have been made to cause harm to the business. The intent must not only be that others hear or read false statements. It must be intended that the business would suffer financial losses. It is sufficient if the defamatory statement is made with the reasonable belief that such loss would occur.
The defendant must have known the statement was false or showed reckless disregard for whether it was false. In other words, it can be enough if the defendant simply did not care about the truth.
Proving a Business Defamation Lawsuit
If someone makes false and disparaging statements about your company, your first response may be to take legal action. And while filing a business defamation suit is certainly your right, you need to make sure you can prove certain elements first. You will therefore need to work with a New York business lawyer to build a case.
As part of that, you should gather evidence that demonstrates three key facts.
Proof of False Statements
You must show that the defendant was responsible for making the false statement. Get a copy or recording or some sort of documentation of the defamatory statements. Make sure you can verify the defendant was responsible for it. Make sure you can prove it was false information.
Proof of Actual Harm to the Business
You must prove the false statement caused financial harm. You can work with a New York business law attorney to establish how the defamation directly affected your business. But basically, you need to link the false statement with negative financial consequences for your company. This may include lost business opportunities, lost profits, and loss of customers due to a damaged business reputation.
You might need an expert witness to help establish a causal link between a defamatory statement and the negative consequences for your business’s economic interests.
The Defendant Knew the Defamatory Statements Were False
Your attorney must show that the defendant knew or should reasonably have known the defamatory statement was false. You may have to show that the defendant displayed reckless disregard for the truth. Although, if you can prove that the defendant knew it was false, that is even better. Sometimes internal or private communications between the defendant and others can show this.
Can Business Defamation Cases Be Settled Outside of Court?
Business defamation claims may be settled out of court. However, you need to be mindful of taking steps to undo the harm caused by the defendant. Your New York business law attorney can discuss ways to mitigate this damage.
For example, a lawyer can send a cease and desist letter to the defamer, demanding they stop the defamatory statements and publicly retract the false claims. If they comply, court action might not be necessary. Your lawyer may start negotiations for a settlement once the case is filed in court. Your attorney may demand that the at-fault party issue a public apology as a condition for not taking the case to trial.
Don’t Let Someone Defame Your Business
If someone has disparaged your company, acting fast will be critical to repairing its reputation. Your business should not be made to suffer because of another party’s lies or disregard for the truth. Reach out to Rosenbaum & Taylor today to learn more about your rights and options.
