- posted: Dec. 15, 2024
- Todd McMurtry
- Defamation
- damages, Business Defamation, Personal Defamation
Defamation is a false statement presented as fact that injures the reputation of the person or entity about whom it is made. In a lawsuit alleging defamation of a business, the damages that need to be proved must be related to the business’s economic losses. These can consist of harmed relationships with customers, suppliers, and investors, ultimately affecting sales, profits, and overall market position. Unlike in personal defamation actions, business defamation damages are usually not presumed.
The following are types of damages that a business can prove in a defamation lawsuit:
- Actual damages — A business can demonstrate that the defamatory statements have caused direct financial harm, such as loss of sales, customers or contracts; reduced profits; or expenses incurred in counteracting the defamatory statements. Actual damages are often the primary form of relief sought, as they represent the concrete impact on the business’s bottom line.
- Reputational harm — In proving reputational harm, the business must show that the defamatory statement resulted in a loss of goodwill, that is, the trust and loyalty among customers that the company has built over time. This may be difficult to quantify precisely but can be inferred from other evidence, such as customer testimonials, expert testimony, or financial performance indicators.
- Loss of business relationships — Defamation can cause a company to lose valuable relationships with suppliers, distributors or other business partners. If the defamatory statement falsely suggests that the business is unreliable or unethical, it could result in a diminution of trust and credit, which could harm the company’s operations and bottom line.
- Punitive damages — These damages might be awarded if the business can prove that the defamation was committed with actual malice, that is, with knowledge of the falsity of the statement or with reckless disregard for the truth. Punitive damages are awarded not to compensate for harm but to punish the wrongdoer and deter similar conduct in the future.
The primary difference between defamation of a business and defamation of an individual lies in the relative availability of presumed damages. For certain types of defamation of an individual, damages for reputational harm need not be proved, such as when the defamatory statements are classified as libel per se or slander per se. Examples are false statements alleging someone committed a crime, has an infectious or contagious disease, has been engaged in sexual promiscuity or is unfitness to perform their profession. The reason for presumed damages is that an individual’s personal reputation is usually of unique importance and that defamation has a direct, immediate social impact.
For a business, however, presumed damages are generally not awarded unless the plaintiff can show actual malice or demonstrate that the defamation was of a nature that inherently caused harm to the business’s commercial reputation. An example is where the false statements impugned the plaintiff’s trademark or brand to the point that it is irreparably weakened. Although the harm is speculative, it may warrant damages if it is reasonably quantifiable and traceable to the alleged defamation.
About Finney Law Firm, LLC
Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation. FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.
FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.
For more information about Finney Law Firm, visit finneylawfirm.com.
Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.
