Understanding Defamation: What You Need to Know
What is Defamation?
Defamation is when someone makes a false statement about you or your business that damages your reputation.
If You’re an Individual or a Sole Traders
If you're an individual or a sole trader, defamation occurs when:
a statement is made that would make reasonable people think less of you;
the statement is likely to seriously harm your reputation; and
the statement was published (i.e. shared publicly) within the last 12 months.
Example: If someone posts online that you're a dishonest tradesperson who never completes work, and this statement is false, it could be defamatory.
If you run a Limited Company
The rules are a little different for registered businesses. You’ll need to show:
it has caused or is likely to cause serious financial loss;
the statement is false; and
it damages your business's ability to trade.
Example: If a review claims your company is a scam, leading to a significant drop in bookings or contracts, this might qualify as defamation.
Key Things to Keep in Mind
the statement must be false;
the statement must be published (shared publicly);
the statement must cause serious harm to your reputation or the financial standing of your business; and
for companies, you need to show a real financial impact.
What is NOT Defamation
Not every negative comment is defamation. These don’t count:
truthful statements;
honest opinions based on real experiences or facts;
statements that don't cause serious harm; or
complaints that are genuinely about your service or product.
When You Should Be Concerned
Consider seeking advice if:
a statement is clearly false;
the statement is causing you to lose business;
the statement is spreading quickly online; and
the statement is malicious and intended to harm your reputation.
Final Tip
Every situation is different. If you're unsure whether something is defamation, it’s a good idea to talk to a legal expert. They can help you understand your options.