The law of defamation in England and Wales exists to protect reputation against false and damaging statements. This protection is available not only to individual people but also to corporate bodies. At first sight, it might appear that the law treats both in the same way, as a company is a legal person in its own right. However, on closer inspection, there are important distinctions in how the law conceives of and protects the reputation of a natural person compared to a company. This essay will analyse these distinctions. It will argue that while both can bring a claim, the law makes a clear and logical difference between the personal, emotional nature of an individual’s reputation and the purely economic or business nature of a company’s reputation. This distinction has become even more pronounced following the introduction of the Defamation Act 2013, which created a specific and higher hurdle for companies wishing to sue.
The Foundation of a Claim in Defamation
To understand the distinctions, it is first necessary to establish the common ground. The tort of defamation is committed when a defamatory statement that refers to the claimant is published to a third party. The long-established test for a defamatory statement is whether it would tend to lower the claimant in the estimation of right-thinking members of society generally (*Sim v Stretch* [1936] 2 All ER 1237). This general principle applies to both individuals and companies.
From an early stage, the courts recognised that a company, despite being an artificial legal entity, has a reputation that the law will protect. In *South Hetton Coal Co Ltd v North-Eastern News Association Ltd* [1893] 1 QB 133, the Court of Appeal confirmed that a corporation could sue for libel. Lord Esher MR stated that a statement could be defamatory of a company if it was a “libel which would be actionable in the case of an individual” and “the law will presume, and will not allow it to be denied, that it is calculated to injure their reputation in the way of their business”. This establishes the fundamental basis for a company’s claim: the protection of its business or trading reputation. An individual, by contrast, sues to protect their personal reputation, which is not necessarily tied to a business or trade. This forms the basis of the first key distinction.
The Nature of Reputation: Feelings versus Assets
The most fundamental distinction between the reputation of a person and that of a company lies in what is actually being protected. For an individual, reputation is intrinsically linked to their personal dignity and feelings. A defamatory statement can cause not only damage to how others view them but also personal distress, hurt, and humiliation. For this reason, damages awarded to an individual claimant compensate for both the injury to their reputation and the injury to their feelings (Horsey and Rackley, 2021). The law acknowledges the real, non-economic harm that defamation can inflict on a person’s life.
A company, on the other hand, cannot have its feelings hurt. The courts have been very clear on this point. In the important case of *Jameel (Mohammed) v Wall Street Journal Europe Sprl* [2006] UKHL 44, the House of Lords considered the nature of a corporate defamation claim. Lord Bingham stated that a company’s reputation is a “thing of value” and that the “reputation of a corporate body is capable of being, and will on occasion be, damaged by a defamatory publication”. However, he also made it clear that “a corporation’s reputation is not to be equated with the feelings of its directors and shareholders”. Lord Hoffmann, in the same case, was even more direct, stating that a company has “no soul” and its reputation is a purely commercial asset. Its good name is only protected because it affects the company’s ability to conduct its business and make a profit. Therefore, the purpose of a defamation claim by a company is not to soothe hurt feelings, but to vindicate its trading name and protect its economic interests. This conceptual difference is the main reason why the law treats the two types of claimant differently.
The Statutory Distinction under the Defamation Act 2013
The conceptual distinction between personal and corporate reputation was given a clear statutory footing by the Defamation Act 2013. Section 1(1) of the Act introduced a new threshold for all defamation claims, stating that a statement is not defamatory unless its publication has caused or is likely to cause “serious harm” to the claimant’s reputation. This requirement of “serious harm” applies to both individuals and companies and was intended to filter out trivial claims. The Supreme Court in *Lachaux v Independent Print Ltd* [2019] UKSC 27 confirmed that “serious harm” is a factual requirement that must be proven, meaning the claimant must produce evidence of the harm suffered.
However, the Act goes further and creates an explicit and separate test for certain corporate bodies. Section 1(2) of the Defamation Act 2013 provides that for a “body that trades for profit”, harm to its reputation is not “serious harm” unless it “has caused or is likely to cause the body serious financial loss”. This is the most significant formal distinction between the reputation of a person and that of a trading company in modern defamation law. An individual claimant can establish serious harm by showing serious reputational damage, which might include evidence of personal distress or social shunning, without needing to prove any financial loss. A company, however, must go a step further and link the reputational harm directly to a serious financial loss, either one that has already occurred or one that is likely to occur in the future.
This statutory requirement reinforces the view of corporate reputation as an economic asset. It makes it much harder for a company to sue for defamation. The company must be able to produce evidence, for example, of lost customers, a fall in profits, or the failure of a business deal that can be directly attributed to the defamatory statement. This prevents powerful corporations from using defamation law simply to silence critics or shut down negative press where they cannot show that their bottom line has been seriously affected (Mullis and Scott, 2014).
A Brief Critical Perspective
The distinction drawn by the law, and particularly by the Defamation Act 2013, can be seen as logical. It rightly separates the personal and emotional aspect of an individual’s standing in the community from the commercial goodwill of a business. It provides a barrier against claims from corporations that are more concerned with managing public relations than with rectifying genuine economic damage. This seems to strike a reasonable balance between protecting trading reputations and safeguarding freedom of expression, a key policy goal behind the 2013 Act.
However, it is worth noting that the distinction is not completely comprehensive. The “serious financial loss” requirement in section 1(2) applies only to a “body that trades for profit”. This means that non-profit organisations, such as charities or certain universities, are not subject to this higher test. A charity would only need to prove “serious harm” to its reputation under section 1(1), in the same way as an individual. This can be justified because a charity’s reputation is crucial to its ability to attract donations and volunteers, and harm to this reputation may not always be immediately quantifiable as “serious financial loss” even if it is very damaging. Nonetheless, it shows that the law does not simply distinguish between ‘person’ and ‘company’, but more specifically between individuals and non-profits on one hand, and for-profit trading bodies on the other. This creates a more nuanced legal landscape than a simple binary distinction might suggest.
Conclusion
In conclusion, the law of defamation certainly does draw a significant distinction between the reputation of a person and that of a company. While both are recognised as having a reputation that can be unlawfully damaged, the nature of that reputation is understood very differently. For a person, reputation is an aspect of their individual identity, and an attack upon it can cause personal distress for which the law offers a remedy. For a company, its reputation is treated as an economic asset, a part of its commercial goodwill, and the law’s protection is focused on preventing financial harm. This distinction, long present in the common law, has now been made concrete and explicit by section 1 of the Defamation Act 2013. By requiring trading companies to prove serious financial loss to bring a claim, Parliament has reinforced the idea that a corporate reputation is fundamentally about money, not feelings. The distinction is therefore not just a matter of theory but has very real practical consequences for any claimant wishing to protect their good name.
References
Horsey, K. and Rackley, E. (2021) *Tort Law*. 7th edn. Oxford: Oxford University Press.
Mullis, A. and Scott, A. (2014) ‘Tilting at Windmills: The Defamation Act 2013’. *Modern Law Review*, 77(1), pp. 87-109.
**Case Law**
*Jameel (Mohammed) v Wall Street Journal Europe Sprl* [2006] UKHL 44
*Lachaux v Independent Print Ltd* [2019] UKSC 27
*Sim v Stretch* [1936] 2 All ER 1237
*South Hetton Coal Co Ltd v North-Eastern News Association Ltd* [1893] 1 QB 133
**Legislation**
Defamation Act 2013
