Trade libel is a type of defamation that can harm a business’s good reputation. The statements are false, but potential clients or customers may not know that, so they develop an inaccurate perception of the business. This could cost it significantly in sales. A negative reputation can be very detrimental for a small business that is trying to grow.
When trade libel takes place, a business tort case may be necessary. Legal action may be needed to put an end to the false negative statements and to seek financial compensation for the damages that the business suffered.
4 key elements
In a trade libel case, there are four key elements to keep in mind.
- The statements were false: The statements made about the business, even though presented as facts, may just be opinions or things that are demonstrably false.
- Financial harm: Because of those statements, the business suffered a distinct type of financial damage or loss.
- Disparagement: The statements that were made were disparaging in nature and had a negative effect on the business’s reputation.
- Actual malice: The person or entity making those statements understood that they were false, but made them anyway, either with a reckless disregard for the truth or with an intent to harm the business.
For example, a local business owner may make inaccurate statements about the quality of another business’s products or services or may even make claims that there has been discrimination or unfair actions taken by that business. They do this with the specific hope of causing harm to the company, which could be beneficial for their own business.
A trade libel case can be very complicated, but it is imperative that business owners understand exactly what legal options they have if their company suffers significant financial harm.