Injurious or Malicious Falsehood

A core element of the tort is that it is false. Also, it must be malicious. It affects the plaintiff in the course of his business. The statement should be mala fide (in bad faith), and not bona fide (in good faith).

As in defamation, there must be communication to a third party for the tort to be complete. In addition to malice, a statement which connotes injurious falsehood may also be made recklessly, without regard to the truth or falsehood of such a statement. The tort is to protect individuals who suffer by the statements of others, but cannot find relief in defamation. The tort of injurious falsehood protects business or economic interest.

Ratcliffe v Evans 1892 2 QB 524. If you’re to answer a question on the tort, include the case. It is the core case to note for the tort. Injurious falsehood is a misrepresentation by one trader in the course of business to prospective customers calculated to injure the business or goodwill of another trader and the said statement or misrepresentation causes or threatens actual damage to the business or goodwill of the other trader. In the case of Mogul’s Steamship Company v McGregor, Gow & co. 1892 AC at page 25. Bowell L.J. noted that the law should impose certain limitations on a trader in the conduct of his business as between himself and other traders. According to him, “the trader’s right to trade freely is a right which the law recognizes and encourages, but it is one which places him at no special disadvantage compared with others.

No man, whether trader or not, can justify damaging another in his commercial business by fraud or misrepresentation. Intimidation, obstruction and molestation are therefore forbidden. So is the intentional procurement of a violation of individual rights contractual or otherwise assuming always that there is no just cause for it...” The courts have overtime, operated with the mindset of sustaining a free market economy, as well as the freedom to enter contracts. This mindset necessitated the creation of a proper balance trough laws aimed at protecting business and economic interests. Something was needed that went beyond the scope of negligence, trespass and defamation. This gave rise tithe tort of injurious falsehood a long with other economic torts.

Injurious falsehood goes beyond the scope of defamation, as it creates liability when a false statement does not necessarily contain an attack on a person’s character, but is in some ways injurious to their business, thus the name injurious/malicious falsehood.

There are certain similarities between injurious falsehood and defamation. In the case of defamation, the statement must be one which lowers the reputation of the plaintiff in the sight of right thinking members of the society. However, for injurious falsehood, the character of the plaintiff does not have to be worse off. For injurious falsehood, it is essential that the statement is false. As with defamation, there must be the element of publication in injurious falsehood. The statement must be published to at least one other person in both torts, or there shall be no cause of action. Publication implies that the statement may either be oral or written.

It was held in the case of Ratcliffe v Evans that an action would lie for written or oral falsehoods, especially where such statements or falsehoods are maliciously published where they are calculated in the ordinary sequence of events to cause or do actual damage to the plaintiff.

Falsehood does not necessarily mean that the entire statement is false. Any colouration of the truth, or of language, or a deliberate hiding of the truth would suffice. The falsehood must be such as to:

1. Discredit the reputation of a business, goods, service or trade.
2. To cause pecuniary loss or loss of patronage in order for an inherent gain to the other person who spreads the falsity.

Elements of the tort

1. Malice. In the tort of injurious falsehood, false statements must be made with malice to someone other than the plaintiff, as a result of which the plaintiff suffers damage. There are instances where false statement, though not defamatory, are nonetheless damaging. The fact that injury has been caused to the plaintiff as a result of an intentional or reckless falsehood will give right to a cause of action. In the case of Halsey v Brotherhood, it was held that besides a statement being untrue and causing injury to the plaintiff, it is essential that the element of malice be proved. That is to say there must be want of bona fide and the presence of mala fide. That means that the defendant did not make the statement in good faith. You should note further that the requirement of malice would be satisfied where the defendant had no honest belief in the statement and if he was motivated by some dishonest or improper motive with the aim of injuring the plaintiff. Note that mere puffs associated with business rivalry will not amount to injurious falsehood. However, where claims of business superiority or inferiority, as the case may be, are based on carefully itemized empirical evidence or ascertained facts, liability will lie where the claims are found to be false. White v Mellin.
2. The statement must be false. The plaintiff has a duty to prove the falsity of the defendant’s statement. Such false statements can relate either to the goods or services or the business itself. In proving falsity, it should be shown that the defendant lacked a honest belief in the truth of the statement or had actual knowledge of its falsity. Once a statement is shown to be false, there is the presumption of malice. Halsey v Brotherhood.
3. As with defamation, publication goes to the riot of injurious falsehood, and the plaintiff has a duty to prove that the false statement was published to at least one person other than the plaintiff. Ratcliffe v Evans. The publication must refer to the plaintiff’s business/trade/profession. However, in some other jurisdictions, the frontiers of the tort have been expanded to state that the statement does not necessarily have to refer to the trade or business, and it would be sufficient if such a claim is injurious or malicious to the plaintiff, and an action will not lie in defamation. Every republication gives right to a separate cause of action. Thus, every person who recommunicates the injurious falsehood will be liable for the tort.
4. The plaintiff must have suffered damage. It must be established that the false statement has caused the plaintiff to suffer some injury or damage. Damage here refers to pecuniary loss which will arise due to loss of business or loss of patronage. Therefore, the plaintiff does not need to show that he has actually lost money. It will suffice when he proves a general loss of business. Malachy v Soper.

Defences to injurious falsehood

The defenses here are similar to those in defamation.

1. Justification or truth of the facts communicated.
2. Absolute priviledge.

Similarities between defamation and injurious falsehood

1. The defenses are similar, such as the defenses of justification and absolute privilege.
2. Both torts could disparage the plaintiff, or lower the estimation of the plaintiff in the view of right thinking members of the society. However, injurious falsehood extends to impute liability/hold a defendant liable in instances where the statement does not necessarily lower the plaintiff in the estimation of right-thinking members of the society but is all the same injurious. Therefore, liability will lie in instances where there is no defamation but the statement is injurious or malicious.
3. While the tort of injurious falsehood protects interests in business, trade, goods and services, property, the tort of defamation extends to protect an individual’s reputation in relation to character, personality and so on.

Differences between defamation and injurious falsehood

1. The falsity of a statement is by expressly an element in the tort of defamation, as is the case in injurious falsehood. Therefore, there could be instances where an action will lie for a statement which is true in the case of defamation. However, the truth of a statement is a complete defence for injurious falsehood.
2. The tort of injurious falsehood is not actionable per se, as the plaintiff has to show that they have suffered damages or injuries in the form of pecuniary loss. In the case of the tort of defamation, libel and certain slanders are actionable per se. The tort of injurious falsehood is an action in rem, while the tort of defamation is an action in personam. That is, an action in injurious falsehood is a right in property, and such action would survive the plaintiff. In the case of defamation, it is a personal action based on right to privacy and self-preservation, and the action dies with the plaintiff.

Z. p. Industries Ltd v Sabotec. It was held that a corporation, or a corporate body, may sue for defamation. For instance, where the publication states that it conducts its business or affairs in a dishonest manner. Note, however, that a public office cannot sue, as this as been said to result in a clamp on the freedom of expression. Derbyshire County Council v Times Newspaper Ltd & Anor.