Defamation is being applied by judges in France to corporate entities. Given that different procedural rules and remedies apply to each cause of action, it is worth examining the impact this new trend might have on corporate entities.
Traditionally, “defamation”, (an abuse of freedom of speech contrary to the Act of 29 July 1881) was applied to natural persons, whereas prejudicial public allegations against corporate entities were generally considered “denigration”, (an act of unfair competition and disparagement contrary to article 1382 of the civil code, following the general principle of civil liability).
1. Defamation of corporate bodies instead of denigration
Two parallel trends have been observed over the past years in case law. One concerns the legal definitions of “defamation” and “denigration”. The other concerns the law that applies to each.
(a) The evolving legal definitions of “denigration” and “defamation”
Originally, the courts judged that denigration only applied to commercial relationships and unfair competition. It consisted of:
“opinions, even immoderate, about products, services, or performances of a business or commercial company” (Paris court of appeal, 11 February 2004).
Compared to this precise definition of denigration (conventionally applied to corporate bodies), defamation is defined as:
“all claims and allegations of fact which prejudice the honour or the consideration of a person or body to which it is imputed. The publication of this allegation, direct or reproduced, is punished by law” (article 29 the Act of July 29th 1881).
Given the scope of these definitions, it is easy to see that denigration and defamation are not necessarily mutually exclusive. Denigrating statements about a company may also affect its image (e.g. by denigrating a company’s products one also defames the company itself).
In this respect, the courts have recently tended to categorise as defamatory claims where a company accuses another of certain acts (such as swindling, infringement, even questioning a company director’s moral fibre). This is because such accusations prejudice the dignity and honour of the company and its director(s) (Alain Afflelou company and Mr Alain Afflelou v Metropole Television Company, Paris Court of Appeal, 25 November 2004).
The French High Court confirmed this approach on 25 September 2005 in a suit brought by a company against statements which concerned “specific facts and were directed at the producer of the identified product” and that were judged to be defamatory, rather than denigrating.
In this sense, the continuing applicability of the concept of denigration to defamatory statements made against corporate bodies has been brought into question.
(b) The effect these definitions have on the application of the law
Denigration actions are governed by article 1382 of the Civil Code, a general rule that applies to all matters where the defaulting party should fix the damage he has caused.
By contrast, defamation is strictly ruled by the 29 July 1881 Act (the “1881 Act”). Moreover, over the past few years, the courts have unanimously ruled that the 1881 Act that relates to defamatory publications should be compulsorily applied and be exclusive of any other legal grounds :
“the abuse of liberty of expression provided for and punished by the law at 29 July 1881 cannot be pursued on the basis of article 1382 of the civil code” (Cour de cassation, 12 July 2000; 29 March 2001; 9 October 2003).
In other words, wronged parties are prohibited from taking more general legal action (for example under Article 1382 of the Civil Code) even if the defamation they have suffered could also be a cause of action in unfair competition or denigration.
In the light of these two legal trends, the scope for bringing an action for denigration has been greatly reduced for corporate bodies. It is only applicable when the infringing acts do not also qualify as defamatory, which is very rare.
2. Rules and remedies applicable to defamation and denigration
Even if denigration actions are not excluded, corporate bodies are obliged to resort to the rules of the 1881 Act and challenge defamatory publications, instead of relying on the civil code. This raises the question of whether these trends favour companies. In particular, do corporate entities enjoy more or less protection under the rules?
(a) Common remedy: summary injunctions (“référé”)
Under article 809 of the Code of French proceedings, fast proceedings (on the grounds of an “obviously illegal nuisance”) before a Civil judge are available to victims without any constraint of time. This is so that, as a matter of urgency, offending material may be removed or publication even prevented in anticipation of defamatory or denigrating statements appearing in media such as newspaper, or on the internet etc.
(b) One remedy and lenient rules for denigration under article 1382 of the Civil code
Denigration necessarily involves two corporate bodies in competition, as it is considered as an act of unfair competition.
The sole judicial remedy available to the victim is to bring the statements’ author before the commercial courts and obtain an order for the resulting damages. The procedural rules in such an action favour the claimant for the following reasons:
- there is no specified time limit before proceedings can be brought; and
- the truth of the statements cannot be denied by the defendant in order to escape liability. However, even if statements are true, a competitor company has no right to make them public for commercial purposes.
(c) Restrictive rules and various remedies for defamation under the 1881 Act
Defamation applies to any individual or corporate body in any context.
Two possible actions are available to the potential claimant, who can issue proceedings against the author of the statement and the publisher, including the owner of the website, (if they are different):
- In the criminal courts - to obtain public condemnation of the author. This can result in a prison sentence of up to 6 months, a fine and an award of damages; or
- In the civil courts – here, only an award of damages is available.The procedural rules are the same for both criminal and civil actions.
In order to protect the principles of freedom of speech, these rules restrict claimants as follows:
- the proceedings have to be launched within 3 months of the date on which the defamatory allegations were published (not the date on which the subject of the allegations had knowledge of them). If proceedings are brought late, the claim is deemed null and this cannot be rectified; and
- the author has the option to refute the truth of the statements in order to avoid responsibility and condemnation. He also has 10 days in which say that the statements were published in good faith and that he believed them to be true, and that their publication was therefore in the general public interest.
The current legal trend in France is that the definition of “defamation” for statements that are commercially prejudicial, even between corporate entities, is now replacing the definition of “denigration”.
In the interests of freedom of speech, procedural rules and remedies restrict claimants from making ill-considered claims. This also prevents potential claimants from delaying the commencement of proceedings.
The result is that companies in France are free to publish true statements about their competitors with minimal risk of having legal action brought against them, provided the wording used is not excessive or unreasonable.
These evolutions in French case law closely follow the trend in Europe. They increase the scope for companies to publish material about their competitors, while maintaining appropriate levels of protection for potential claimants.