What to Do When Your Business Faces Defamation?
Business defamation can devastate your company’s reputation and bottom line when false and damaging statements spread about your enterprise. Discovering that someone has made false and damaging statements about your business can be overwhelming. Whether it’s a malicious online review, social media post, or comments to your clients, knowing how to respond quickly and effectively can make the difference between minor damage and serious harm to your reputation.
Understanding business defamation laws and your legal options helps protect your company from reputational damage and financial losses caused by false statements.
So what practical steps can you take when facing defamatory statements about your business?
Your Business Defamation Resolution Options
If your business has been targeted by harmful or false statements constituting business defamation, you have two main approaches depending on the severity and urgency of the situation.
Option 1: Resolve Business Defamation Without Court Proceedings
Most businesses prefer quick and discreet resolution when possible. This approach often proves faster and less expensive than formal legal action:
- Sending a formal Concerns Notice requesting content removal and correction or apology
- Negotiating directly with the person involved
- Using mediation to find a workable solution
Option 2: Formal Legal Action
When informal steps don’t resolve business defamation or the situation is serious, formal legal action follows this process:
- Step 1: Concerns Notice – Before court action, you must serve a Concerns Notice under section 12A identifying the defamatory material and explaining the harm.
- Step 2: Defendant’s Response – Defendants can make an Offer of Amends within 28 days (sections 14-15) or issue an apology without admitting guilt (section 20).
- Step 3: Court Proceedings – If unresolved, file a Statement of Claim. Claims must be filed within one year of publication (section 14B Limitation Act).
Available Remedies and Compensation
Successful defamation claims can result in several types of relief for businesses:
Monetary Compensation
- Compensatory damages for actual losses suffered (capped at $250,000 for non-economic loss)
- Economic losses including lost profits, cancelled contracts, and reduced business value
- Legal costs in appropriate cases where the claim succeeds
Non-Monetary Remedies
- Injunctions requiring removal of defamatory content from websites and social media
- Correction orders requiring publishers to issue corrections or clarifications
- Apologies that acknowledge the harm caused without necessarily admitting legal liability
Note that punitive damages are prohibited under section 37, meaning courts cannot award additional damages to punish defendants.
Immediate Action Steps
If you believe someone has made false or damaging statements about your business:
- Document everything immediately – Save screenshots, links, emails showing the defamatory content
- Seek legal advice early – You have only 12 months from publication to bring a claim
- Consider non-legal solutions first – Direct communication or platform reporting may resolve issues faster
- Evaluate your evidence – Can you prove serious harm with concrete financial or reputational damage?
If you’re facing a defamation claim:
- Respond quickly to Concerns Notices – Prompt responses show good faith
- Consider settlement through Offers of Amends to avoid costly litigation
- Gather supporting evidence for available defences
- Remember truth is an absolute defence – Substantially true statements cannot be defamatory
Need Help With Business Defamation?
Not every negative comment about your business constitutes actionable defamation. Understanding the difference between legitimate criticism and defamatory statements helps you focus your resources on matters where legal action can be effective. Professional legal advice helps you evaluate your specific circumstances, understand your options, and make informed decisions about protecting your business reputation through the most appropriate means. At Citilawyers, we help businesses understand their rights and take practical steps to protect their reputation. Contact us today for legal guidance tailored to your specific situation.
Time is critical in defamation matters – with only 12 months to act, early consultation with a defamation lawyer Sydney can make all the difference to protecting your business.
