The Risks of Defamation

Defamation actions are time consuming and complex. The costs associated with defending an action more often than not significantly outweigh any damage sustained. The litigation can also lead to negative publicity for all involved.

In order to be defamed, a person(s) ('the Plaintiff') must be identified in a publication issued by or on behalf of another ('the Defendant'). The Plaintiff can be identified by name, title, photograph or other description. Generalisations about groups of people are usually insufficient (e.g. all employees at a particular hospital) though a broad reference to a smaller group may be sufficient (e.g. the physiotherapists at a particular hospital), which also means that you can defame several persons with the one reference. Organisations with more than 10 employees cannot sue for defamation.

In order to be defamed, there must first be a publication communicated by one person to at least one other person, apart from the person defamed. The publication can be in any medium of communication - radio, photograph, newspaper, television broadcast or internet. The publication must also convey the defamatory meaning (referred to as an imputation) which can arise from the literal meaning of the words, reading between the lines or a combination of what is stated and what persons already know.

The most common form of defamatory publication is actually the republication of defamatory statements made by someone else. The second publisher of the defamatory statement can be just as liable as the first author of the statement. Quantum of damages is linked to the number of people to whom the defamatory statement has been published.

An imputation is considered defamatory if it tends to lower a person's reputation, lead others to think less of the person, make others shun or avoid the person or cause others to ridicule hate or despise the person. Damage to reputation is the basis of any defamation action.

A number of defences can be raised to a defamation action and a defendant is not limited to just one. These include:

• justification/truth - where the defendant proves the defamatory imputations to be substantially true;
• contextual truth - where the defendant can come up with his/her own defamatory meaning which is equally as serious and prove it to be true;
• qualified privilege - which applies to a statement made by a person who has a duty to do so, where it is made it to a person(s) with an interest/duty in receiving it. This defence can be defeated if the Plaintiff provides malice on the part of the defendant;
• statutory provisions;
• fair comment/honest opinion - which protects expressions of opinion on an issue of fact that is considered to be a matter of public interest;
• fair reporting - which applies to the reporting of court or similar proceedings or meetings held in public;
• innocent dissemination - available where the defendant has no control over publications (such as postings on a website), although it is only available until the defendant is notified of the defamatory content; or
• offers to amends - any offer to apologise, publish a correction (if required) and pay compensation made within 28 days of receiving a complaint can significantly lessen any awards for damages. An apology does not constitute any admission of liability.

The limitation period to commence any action for defamation is one year from the date of publication. However, an extension to three years can be sought in certain circumstances.

Hypothetical

In January, Dr Fred was asked by a GP to provide a second opinion on a patient of Dr Flintstone. After reviewing the patient, Dr Fred provided his opinion on the examination to the GP and also stated:

'Had Dr Flintstone properly operated on and treated this patient, this review would not be necessary. The treatment to date has been archaic and inappropriate and as a result, this patient's condition has seriously worsened. I have found this to be the case with most of Dr Flintstone's patients.'

In addition to the GP, a copy of Dr Fred's opinion was provided to the subject patient, the AMA and the orthopaedic surgeons (which included Dr Flintstone) at the hospitals where both Drs Fred and Flintstone practised. The opinion was also generally discussed with nursing staff. Shortly afterward, a number of patients requested to be transferred from Dr Flintstone's care to Dr Fred's care and after a few months Dr Flintstone observed a significant decrease in his practice.

In March 2008, Dr Flintstone wrote to Dr Fred alleging that through the publication of the correspondence, Dr Fred had defamed him. Dr Flintstone stated that the correspondence raised a number of defamatory imputations including that he was an incompetent surgeon, out of date with current practices and unconcerned with patient welfare. Dr Flintstone demanded an apology, a retraction and compensation for his lost revenue as a result. Dr Flintstone also said that if his demands were not met, defamation proceedings would be commenced.

Dr Fred's Response

Dr Fred, being aware that an offer of amends made within 28 days of receiving a complaint will assist in reducing any claim for damages in defamation matters, immediately responded to Dr Flintstone saying that he:

• did not intend to cause any harm and his concern was patient welfare;
• did not agree with Dr Flintstone's treatment methods which differed from his own, but accepts that they may have been appropriate in the circumstances;
• wished to apologise for any hurt or distress that may have been caused;
• would like to place a retraction notice on the hospital notice boards expressing the above;
• offered to assist in the transfer of patients back to Dr Flintstone which should remedy the lost income issue.

Of course, this only occurred in a perfect world!

Unfortunately, Dr Fred's only response was to ignore Dr Flintstone's letter of demand. Proceedings were commenced in the Supreme Court for damages. The defamation trial, which Dr Fred elected to have conducted in front of a jury, took a year to get a hearing date from the Court. Many hours were spent by both Drs Fred and Flintstone briefing lawyers and engaging experts.

The jury agreed that the correspondence did contain the defamatory imputations alleged by Dr Flintstone. Dr Fred was then required to prove his defences to the action.

For the truth defence, Dr Fred was required to call a number of peers to give evidence as to Dr Flintstone's abilities as a surgeon, all of whom were unwilling to do so and gave evasive and non-committal evidence in Court. All witnesses called had long-term professional and, in some instances, personal relationships with both Drs Fred and Flintstone. The witnesses all wished to avoid any involvement in the dispute between the two doctors.

Dr Fred pleaded a defence of qualified privilege alleging that all recipients of the communication had an interest in receiving the information. In order to prove this defence, Dr Fred was required to explain each recipient's interest in the subject matter. The correspondence was provided to all doctors at each hospital, not just those who were involved in the treatment of Dr Flintstone's patients and also other staff who had no interest. As a result, the jury did not accept Dr Fred's defence of qualified privilege.

In addition, Dr Flintstone raised the issue of malice alleging that Dr Fred did not treat any other patients of Dr Flintstone. Accordingly, it was argued that Dr Fred was not in a position to say that other patients had received the same or similar treatment and could not have believed the statements he made to be true. The jury agreed and found that, if Dr Fred had succeeded in his defence of qualified privilege, it would have been defeated by malice.

As the defences were unsuccessful, the damages were assessed. Under NSW legislation, damages can be awarded for hurt, distress and loss of reputation of up to $285,000 in addition to past and future economic loss and legal expenses. The jury awarded Dr Flintstone:

(a) $50,000 for the general damages;
(b) $125,000 for income lost since the publication;
(c) $100,000 for future lost income (reduced as Dr Flintstone had started rebuilding his practice at another hospital);and
(d) legal fees which totalled $200,000.

As a result, Dr Fred was required to pay $475,000 to Dr Flintstone, in addition to his own lawyers' fees.

The Lesson

Defamation claims are damaging, professionally and financially and should be avoided if possible. In relation to the above hypothetical, had Dr Fred limited his opinion to matters within his knowledge and also only distributed it to persons within an interest in the subject matter, it is more likely that the defence of qualified privilege would have succeeded. It would have also assisted if Dr Fred had marked his opinion 'strictly confidential'.

Hypotheticals are for general information only. It is not intended to provide legal advice. Professional advice should be sought before acting in relation to the issues raised in these hypotheticals.

Samantha Kelly
Senior Associate
DLA Phillips Fox

Kerry Hogan-Ross
Partner
DLA Phillips Fox