eCaseNote 2007 No. 05

DEFAMATION ON THE INTERNET: THE COURTS GET SERIOUS ABOUT “CYBER-LIBEL”

Barrick Gold Corp. v Lopehandia [2004] 31 CPR., 239 DLR. (4th) 577 Vaquero Energy Ltd. v Weir [2004] ABQB 68, 353 A.R. 191

The advent of the internet has done little to change the fundamentals of the law of defamation. In fact, two recent cases suggest that defamatory remarks made about a person via the internet may attract a more severe penalty then the traditional conception of the tort. We believe a brief comment on these cases would be of interest to any of our clients who use the internet as a means of business communication.

In both Vaquero and Barrick, the defamatory remarks consisted of allegations made against a company director via internet stock bulletin boards. In Vaquero, a shareholder of the energy corporation made several allegations about a director alleging he was “insane”, “retarded” and managing the company for his own benefit. These postings on the company’s internet bulletin board were found by an Alberta Court to be of such a character that they lowered the director in the eyes of right thinking members of the public, the key characteristic for a claim in defamation. Similarly, in Barrick, a disgruntled shareholder made accusations of accounting fraud and theft against a natural resources company in a series of web postings over an extended period. Here, the court found that the plaintiff’s conduct warranted punitive damages as it was, because of the nature of the communication, more damaging to the plaintiff than publication through another medium. The Ontario Court of Appeal stated that:

“[C]ommunication via the Internet is instantaneous, seamless, interactive, blunt, borderless and far-reaching. It is also impersonal, and the anonymous nature of such communications may itself create a greater risk that the defamatory remarks are believed…[T]he mode and extent of publication is therefore a particularly significant consideration in assessing damages in Internet defamation cases.” Like all defamation cases, the key consideration in taking legal action is whether the actions are truly harmful to the person’s reputation. In Barrick, the Court found that it was not necessary to show actual damage to the business of the company, but the fact that inquiries were made by investors and other members of the community was enough to establish a claim. Similarly, any defamatory comments will be taken seriously when the context suggests the author meant them to do harm to the reputation of the person or corporation targeted, regardless of whether they do such harm. Therefore, it should be borne in mind that the anonymity of the internet will do little to protect persons who post libellous remarks on bulletin boards, chat rooms, or even private boards such as FaceBook™.

The level of damages awarded in these cases is also significant. For instance in Barrick, the Court awarded both general and punitive damages, with the latter being $50,000 of the total $125,000 award. The court considered such factors as the defendant’s refusal to stop the offending conduct, and his blatant refusal to apologize as aggravating factors increasing the punitive award.

These two cases are important for two reasons. Firstly, they send a warning signal to those who use the internet to vent their frustrations as shareholders, customers, employees and so forth that “cyber-libel” will be taken seriously. Secondly, they establish that, all other things being equal, cyber-libel will be treated as more damaging than conventional defamation. In that regard, anyone communicating about business matters on private or public bulletin boards should be careful to ensure that such is done within the parameters of the law.

Should you wish to receive a full copy of this decision or discuss its implications, please feel free to contact our office at your convenience.



The comments contained in this eCaseNote provide general information only and should not be construed as legal advice or opinion. For more information or specific advice on matters of interest, please call our offices at (709) 579-2081.