The In-House Lawyer

Reputation law: an international approach to protecting brands

E-mail Print PDF

The threat from modern methods of communication is that the potential damage to an individual, company or brand’s reputation is fast and global. As international companies and their brands grow, so does the need for a trusted reputation and the need to protect the brand. The speed at which information travels, especially in this internet age, means that damage to reputations can be swift and far-reaching. Clients doing business worldwide need advice on an international scale. A media crisis affecting a brand’s product in Spain can rapidly spread online through the EMEA region, or even globally, and can then be picked up by the mainstream media in newspaper articles across many different countries. Having a proactive cross-border media strategy is a vital element in damage control.

An internationally renowned client would do well to know the details of the approaches of different jurisdictions to reputation protection, or at least have access to someone who does. It may be that their interests are better protected by the laws of another jurisdiction. This is not meant to advocate forum shopping, but to promote a sophisticated and intelligent attitude to reputation protection. A defamatory article concerning a client published on a French website can be dealt with from the UK, as it is ‘published’ here. However, it would be much faster, less expensive and certainly more subtle to use the droit de réponse procedure in France.

One of the best methods is to have instant access to the appropriate advisers, who have in-depth knowledge of the law of that country as it relates to reputation protection, and how best to use it: a little black book of reputation protection specialists around the world, available at a moment’s notice. Schillings has an established and trusted network of such lawyers, and has acted as the single point of contact to manage multi-regional threats to reputation and ensuing litigation. This allows clients to outsource the inevitable time and resources that would be required to manage such an eventuality to people who know what to do and, most importantly, who to call.

Acting swiftly and keeping ahead of the latest developments is essential in a crisis scenario. Having access to this efficient pan-European resource can make all the difference in providing a fast solution, while allowing the in-house legal team to concentrate on other matters and the communications teams to work on the positive messages to help limit the damage to the corporate or brand reputation.

GLOBAL THREATS TO REPUTATION

Modern communication is international and instantaneous. As such, the potential for damage is immense. The internet has completely changed the battleground, and it is constantly evolving. Online news, Facebook, blogs and Twitter all contribute to the dissemination of information, and if that information is harmful the effect can be devastating. A disgruntled employee or dissatisfied customer only has to post one negative comment on a backstreet blog for it to become a raging fire in the mainstream press. The need for news, 24/7, also results in journalists churning out unresearched articles to meet increasingly unrealistic deadlines and demands. This practice is referred to as ‘churnalism’. Facebook, blogs and Twitter are the first port of call for many journalists, scouring the sites for any signs of a story.

As modern communication knows no borders or boundaries, and there is no international charter on reputation protection, corporates are confined to the laws of each country to seek to protect a reputation, and each country’s laws are different (as illustrated in the case study on p57). However, this is not as much of a nightmare as it sounds. While each jurisdiction’s law, and application of the law, differs, so do the options and opportunities for protecting reputations.

A EUROPEAN SOLUTION

Right of reply

In France, criminal libel law offers a droit de réponse, which provides that the record must be set straight within months, with the defamer getting a criminal record and being obliged to publish a prompt and appropriate retraction. Defendants are only afforded three months’ notice to appear before a tribunal, and have just ten days from receiving that notice to file evidence in defence if they want to assert that the statement is true and to provide a list of witnesses that they intend to call. If the evidence and list is not filed within the ten days, the evidence will not be admitted and the witnesses will not be heard. Hearings are brief, generally lasting less than a day.

In England, there is no right of response. Defamation proceedings must be issued to oblige a defendant to set the record straight. Defamation proceedings can be long (generally 18 months) and expensive, and result, if successful, in a judgment clearing the claimant’s name and an award of damages and costs. The court cannot compel the defendant to publish an apology or retraction. What sets England apart is the amount of damages awarded, which are usually much higher than the amounts awarded by European courts.

Injunctions

You cannot, yet, prevent the publication of defamatory material in the UK, following Bonnard v Perryman [1891]. Damages are perceived to be an adequate remedy. Reynolds v Times Newspapers Ltd & ors [1999] (a case that established a defence for responsible journalism) outlined principles that unsettled publishers. The questions raised were:

  • What is the urgency?
  • Who are your sources?
  • What are the precise allegations?

This is a very effective tool to tone down, and even prevent, the publication of defamatory allegations.

Contrast this with Germany, where injunctions are commonly used to restrain the media from repeating allegedly false and defamatory reports. Injunctions to prevent the first publication of a possibly defamatory statement are rarely ever issued because of the difficulty that claimants face in substantiating the contents of the prospective statement. An injunction can be permanent, through final judgment, or temporary, through an inhibitory order pending litigation. Injunctive relief is available where:

  1. a claimant can prove that the defamatory statement is untrue; and
  2. the defendant fails to meet the burden of showing that they have conformed to the duty to investigate the facts.

Who to sue

In France, under the rules of the press, each media organisation nominates a person who is responsible for statements published by that organisation. The directeur de la publication is the one who is sued, personally, in the event that those statements are defamatory. France operates a ‘cascading’ system of responsibility, first in line being the directeur de la publication who assumes full responsibility for their team. This allows for easier identification of the person against whom proceedings should be initiated. A similar system operates in Spain and Italy. In England, you can sue anyone responsible for publishing the defamatory statement, including the author, editor, publisher and even, in certain circumstances, the distributor.

A frequent conundrum is how to approach the anonymous blogger posting defamatory material on a website. In Spain, the internet protocol (IP) address of the author is protected by data protection laws. In France, as in this country, you can apply to court for an order that the internet service provider (ISP) reveals the individual’s details. In England, the ISP is treated as a publisher of the defamatory statement and is the usual port of call. Aside from the traditional defences of justification, fair comment, qualified privilege and absolute privilege, an additional defence is available under s1 of the Defamation Act 1996 if a person can prove that:

  1. they were not the author, editor or publisher of the statement complained of;
  2. they took reasonable care in relation to its publication; and
  3. they did not know and had no reason to believe that what they did caused or contributed to the publication of a defamatory statement.

In Europe, the Electronic Commerce (EC Directive) Regulations 2002 define the circumstances in which internet intermediaries (including ISPs) can be held liable for material hosted, cached or carried by them. In brief, the Regulations give immunity from liability to internet intermediaries who act as ‘mere conduits’ and qualified immunity to internet intermediaries who act as ‘cachers’. To qualify for this immunity, cachers must act in accordance with industry standards and must have immediately removed material on receipt of a complaint. The Regulations also give an even more qualified immunity to internet intermediaries who act as hosts. Again, this is dependent on the host immediately removing material on receipt of a complaint.

Where to sue

A defamation action can only be issued in the UK if there has been publication in the jurisdiction. If the newspaper or manuscript was not available in the UK, no claim could be brought. The internet has radically changed this. Under UK libel law, the tort is committed in the place where the publication is received by the hearer, reader or viewer. Therefore where material is posted on a blog in France, but accessed by a person in England, the tort is committed in England (see Dow Jones & Co Inc v Gutnick [2002]) .

In Fiona Shevill & ors v Presse Alliance SA (convention on jurisdiction and the enforcement of judgments)[1995] the European Court of Justice (ECJ) held that a party seeking compensation can sue in a state where they suffered direct damage. In Shevill, a person resident in England claimed compensation for an article published in a French magazine. The ECJ considered whether the ‘place where the damaging event took place’ could be every location where the allegedly insulting publication was circulated or whether jurisdiction can only be conferred on the courts of the state in which the publisher has its registered office. The ECJ held that the victim of damage to honour and reputation can bring a claim before the courts of every single state in which the insulting statement was circulated. This principle applies only to damage sustained in the particular state. Compensation for all damage sustained can only be brought in the courts of the state where the publisher has its registered office.

By Laura Tyler, associate solicitor, Schillings.

E-mail: laura.tyler@schillings.co.uk.

case study

In a recent example, an international client encountered an issue with a journalist from a national newspaper in Switzerland. The journalist contacted the client’s local office in Zurich with a series of questions, which all seemed to point to an allegation that the client was insolvent. The allegation was entirely without foundation and, if published, would be extremely damaging to the client’s business worldwide. The local office called the head office, who then called Schillings. Schillings contacted a Zurich law firm, well versed in Swiss media law and reputation management. The Swiss lawyer wrote to the journalist, editor and in-house legal team of the regional newspaper, reminding them of their responsibilities, both legal and journalistic, under Swiss law, and warning them that any deviation would be met with swift legal action. Schillings contacted lawyers in several other European jurisdictions where the client had a significant presence, to warn them of the potential of a similar threat arising in those countries. After an initial and brief resistance, the Swiss newspaper undertook not to publish the article and the story disappeared. It was not the international catastrophe that the client had feared. However, if it had ended down that route, the client would, at least, have been prepared.

Bonnard v Perryman [1891] 2 Ch 269

Dow Jones & Co Inc v Gutnick [2002] HCA 56

Fiona Shevill & ors v Presse Alliance SA (convention on jurisdiction and the enforcement of judgments) [1995] EUECJ C-68/93

Reynolds v Times Newspapers Ltd & ors [1999] UKHL 45; [1999] 4 All ER 609; [1999] 3 WLR 1010

European approach to defamation law

England

English defamation law is divided between libel and slander. If the publication is made in a permanent form – eg in a letter, on a billboard, on a blog – it is libel. If it is made in some transient form – eg it is spoken or an instant message – it is slander. The limitation period is one year from the date of the defamatory statement. The claimant must prove that the statement is defamatory, ie that it damages their reputation, and it is for the defendant to prove that the words are:

  1. a) true;
  2. b) fair comment; or
  3. c) made on a privileged occasion (absolute or qualified).

Defamation actions, which are brought in the civil court, are conducted before a jury, unless there will be a prolonged examination of documents, in which case it is tried by judge alone.

France

In France, unlike the UK, there is no distinction between libel and slander. The limitation period is very short – only three months starting from date that the defamatory material was first published. The defences are:

  1. a) justification;
  2. b) good faith;
  3. c) privilege/immunity; and
  4. d) the defamatory material was an expression of an opinion, not fact.

Defamation is a criminal offence in France, actionable in civil and criminal courts, and tried by judge alone.

Germany

In Germany, libel includes statements in verbal, written or other form that injure a person’s reputation. The limitation period for bringing a claim is three years after the end of the year when the defamatory material was published. The defences are:

  1. a) the libel was a statement of opinion;
  2. b) it was in ‘fulfilment of journalistic diligence and carefulness’;
  3. c) that a false allegation of fact may be justified if the maker of statement has acted ‘in the pursuit of legitimate interests’; and
  4. d) fair comment on a matter of public interest.

Like the UK, the burden of proof is on the defendant.

Spain

In Spain, there is a distinction between libel and slander. Libel is defined as an imputation of a crime made with knowledge of its falsehood or rash disregard for truth. Slander is an act or expression that harms the dignity of another person, discredits their reputation, or undermines their self-esteem. Defamation is both a criminal and civil offence. Slander is punishable by a prison term of between six months and two years, and a fine; libel is punishable by a fine. The principal defence is whether the statement was true. Unlike the UK, the claimant bears the burden of proof and must establish elements of the offence. However, the defendant has the burden of proving that the defamatory imputation is true and that there was no wilful misconduct.
 

Follow The In-House Lawyer...