Hilary Young, ‘Adding Insult to Injury in Corporate Defamation Damages’

Abstract:
The law of defamation treats corporations almost identically to natural persons. In most common law countries, corporations may bring defamation actions, and the elements are the same for corporate plaintiffs as for natural person plaintiffs, as are the defences. So too, are the principles for awarding damages.

Both people and corporations have valuable reputations worthy of legal protection. However, given the significantly different effect of reputational injury on humans than on corporations, the principles applied in quantifying damages to each should differ. Aggravating factors relating to emotional injuries should not be considered in assessing reputational injury to corporations, because corporations cannot suffer such injuries. Specifically, I focus on the relevance to the quantification of damages of: a) the defendant’s failure to apologize; b) the defendant’s malice; and c) the aim of vindicating reputation. Examples are drawn primarily from Canadian law but also from the laws of other common law countries.

The article first argues against treating a defendant’s failure to apologize to a corporation as a factor aggravating damages. The only relevance to a corporation of an apology is as a form of setting the record straight. Thus, an apology may mitigate damages but a failure to apologize will often have no effect on damages. Yet the law treats a failure to apologize as aggravating damages.

Similarly, the defendant’s malice is considered a factor aggravating damages, but since corporations cannot be upset, embarrassed or insulted, it is not clear that malice should be relevant to calculating their compensatory damages.

Finally, courts should no longer award damages in order to vindicate corporate reputation. The interest in human dignity may justify the vindicatory goal of defamation law. However, given that corporations have no dignity to protect, and given a number of problems associated with attempting to award damages to vindicate reputation, it is not justifiable to award corporations damages to vindicate their reputations.

Young, Hilary, Adding Insult to Injury in Corporate Defamation Damages (May 31, 2013).

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