Should companies be able to sue for libel?

Why there should be limits on the rights of “legal persons”.

Earlier this week, Conservative and Liberal Democrat MPs voted down a powerful House of Lords amendment to the current Defamation Bill which would have made it far harder for companies to bring and thereby threaten libel actions in England and Wales.  It may well be that such a provision can be put back in; the minister appears to have made some concession to this effect.  But the vote raises a wider question of principle: to what extent, if any, should the law of libel look at humans and “legal persons” such as companies, and treat them just the same?

Human beings have legal rights, and there are things no person or group can do to human beings, without violating their legal rights.  Human beings also have obligations imposed by statute or the common law.  They can enter into and enforce contracts; they can hold and dispose of property; they can break the criminal law and be punished for doing so.  All this because the law regards human beings as “natural persons” with “legal personality”. And at law, as with dogs, personality goes a long way.

The law, however, does not only recognise natural persons.  It also recognises “corporations” as legal persons.  These entities do not actually exist, at least in any tangible way.  A Martian would not see them from space.  They are abstractions.  In the language of the law, corporations are “legal fictions”, which exist only to the extent that law allows.  In the words of one eminent old judge, corporations have "no soul to be damned, and no body to be kicked".  There may be human beings who hold shares and act as directors, but companies themselves are affairs of the mind.

Nonetheless, corporations are highly convenient legal creatures, and they have been a feature of English law from early times.  For example, a so-called “corporation sole” such as a Bishopric could continue to hold property, separate to the person who happened to be bishop or whether there was a current bishop at all.  A local authority could use its corporate status to employ staff and buy land for houses. 

And corporations also became useful for commercial purposes, and these were usually called “companies”.  Instead of merchants and manufacturers trading on their own accounts, they could form companies to manage and allocate certain business risks.  If a company was unable to pay its debts, then the shareholders of the company could just walk away without personal liability.  It was a legal device to protect commercial interests by limiting the legal exposure of those involved.

For a long time, companies were frowned upon.  Even now the law requires that most companies need to have “Limited” in their name so as to warn others that the liability of the shareholders is limited.  Until Victorian times it was actually quite difficult to form a company for commercial purposes, and it often required a special Act of Parliament. But then the idea took off when new companies legislation was passed, and it was made possible for companies to be formed with ease. Companies swiftly became the norm in business life.

So familiar are we now with companies, it is forgotten just how artificial they are.  They are merely a way of arranging and managing certain legal relationships. That they have legal personality is a means to this end.  Legal personality allows companies to enter into contracts, hold property, and be subject to legal obligations in the same manner as natural persons. But all this is for the purpose of the human beings connected to those companies not personally having those rights, powers and obligations instead.

In respect of defamation, it is entirely true that companies can have reputations, and that those reputations can be adversely affected by things which are said by others. The real question is the extent to which companies should be able to maintain an action for defamation in the way a natural person can. Lots of things have a reputation but which cannot sue for libel: for example, a racehorse or a business technique. These can be disparaged, and loss suffered, but there is no remedy in defamation. Furthermore, the courts have held that “public corporations” cannot sue for defamation, and nor can political parties. So why the exception for private corporations?

Companies already have a formidable range of legal protections for their reputation. They can protect their trade marks and they can sue for “passing off” against counterfeiters and imitators. Companies are protected from inaccurate advertising and unfair business practices of their competitors.  They can bind their former employees to confidentiality. And they can sue in respect of deliberate lies under the tort of “malicious falsehood”. There are even the ancient rights of action in respect of slander to title (ie property rights) and to goods. In many ways, the law protects the reputations of companies far more extensively than it does the reputations of human beings. And, of course, directors and employees can sue for defamation their own names.

So what additional purpose is there in the general law of defamation protecting companies? Why should companies be able to sue for libel? It is certainly convenient for them, as it is easier to threaten a libel claim (where the onus is on the defendant to prove a defence) than it is for malicious falsehood (where the onus is on the claimant to prove both malice and falsity). And, in practice, companies have used defamation to effectively bully and chill their critics. Many City lawyers make their living from promoting “reputation management” to corporate clients. The law says that companies can only sue in respect of their “trading reputations” but, in practice, companies instruct their lawyers to issue libel threats for all sorts of criticism.

Given the range of legal protections already in place, there is a strong argument for the right of companies to sue for libel to be abolished. Any public interest in such a right existing is more than offset by the public interest in ensuring critics of companies not being subject to the chill of libel threats. Those involved in a company, after all, usually get the incredible legal privilege of limited liability; it would only be fair for such a privilege to be offset by the company facing the prospect of frank and uninhibited criticism.

During the recent libel reform debates, such an argument was mounted; but it failed to convince the government. However, the House of Lords passed an amendment making it difficult for companies to sue for libel unless they could convince a court at an early stage that the libel caused (or could cause) serious financial loss. The Lords amendment also made it impossible for private companies performing public functions to bring libel actions at all in respect of criticism of those public functions. This week, despite a spirited and impressive defence of these sensible protections by shadow justice secretary Sadiq Khan, the Lords’ amendment was lost. A watered-down version may still be re-introduced, but no one knows for certain.

Whatever the outcome of what is left of the passage of the Defamation Bill, there remains the issue of corporate power and how it is checked.  That corporations have power, and that this power affects the lives of natural persons – human beings – there can be no doubt.  That the corporations provide legal protections for those who are connected with the ciorporation is also true.  The question is the extent to which the use of corporations can be subjected to the frank scrutiny of others. Even if there is a case for saying corporations should be able to sue for libel, it certainly should not be easy for them to do so, unless they can show actual or potential substantial loss.

And corporations should never be regarded as analogous with natural persons; they are simply legal fictions – albeit useful ones - and should always be treated as such.

 

David Allen Green is legal correspondent of the New Statesman and a media lawyer.  He also writes the Jack of Kent blog.

 

(Legal) personality goes a long way. Photograph: Miramax Films

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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Meet the hot, funny, carefree Cool Mums – the maternal version of the Cool Girl

As new film Bad Moms reveals, what the cool girl is to the diet-obsessed prom queen, the cool mum is to the PTA harpy.

I suppose we should all be thankful. Time was when “mum’s night off” came in the form of a KFC value bucket. Now, with the advent of films such as Bad Moms – “from the gratefully married writers of The Hangover” – it looks as though mums are finally getting permission to cut loose and party hard.

This revelation could not come a moment too soon. Fellow mums, you know all those stupid rules we’ve been following? The ones where we think “god, I must do this, or it will ruin my precious child’s life”? Turns out we can say “sod it” and get pissed instead. Jon Lucas and Scott Moore said so.

I saw the trailer for Bad Moms in the cinema with my sons, waiting for Ghostbusters to start. Much as I appreciate a female-led comedy, particularly one that suggests there is virtue in shirking one’s maternal responsibilities, I have to say there was something about it that instantly made me uneasy. It seems the media is still set on making the Mommy Wars happen, pitching what one male reviewer describes as “the condescending harpies that run the PTA” against the nice, sexy mummies who just want to have fun (while also happening to look like Mila Kunis). It’s a set up we’ve seen before and will no doubt see again, and while I’m happy some attention is being paid to the pressures modern mothers are under, I sense that another is being created: the pressure to be a cool mum.

When I say “cool mum” I’m thinking of a maternal version of the cool girl, so brilliantly described in Gillian Flynn’s Gone Girl:

“Being the Cool Girl means I am a hot, brilliant, funny woman who adores football, poker, dirty jokes, and burping, who plays video games, drinks cheap beer, loves threesomes and anal sex, and jams hot dogs and hamburgers into her mouth like she’s hosting the world’s biggest culinary gang bang while somehow maintaining a size 2, because Cool Girls are above all hot.”

The cool girl isn’t like all the others. She isn’t weighed down by the pressures of femininity. She isn’t bothered about the rules because she knows how stupid they are (or at least, how stupid men think they are). She does what she likes, or at least gives the impression of doing so. No one has to feel guilty around the cool girl. She puts all other women, those uptight little princesses, to shame.

What the cool girl is to the diet-obsessed prom queen, the cool mum is to the PTA harpy. The cool mum doesn’t bore everyone by banging on about organic food, sleeping habits or potty training. Neither hyper-controlling nor obsessively off-grid, she’s managed to combine reproducing with remaining a well-balanced person, with interests extending far beyond CBeebies and vaccination pros and cons. She laughs in the face of those anxious mummies ferrying their kids to and from a multitude of different clubs, in between making  cupcakes for the latest bake sale and sitting on the school board. The cool mum doesn’t give a damn about dirty clothes or additives. After all, isn’t the key to happy children a happy mum? Perfection is for narcissists.

It’s great spending time with the cool mum. She doesn’t make you feel guilty about all the unpaid drudgery about which other mothers complain. She’s not one to indulge in passive aggression, expecting gratitude for all those sacrifices that no one even asked her to make. She’s entertaining and funny. Instead of fretting about getting up in time to do the school run, she’ll stay up all night, drinking you under the table. Unlike the molly-coddled offspring of the helicopter mum or the stressed-out kids of the tiger mother, her children are perfectly content and well behaved, precisely because they’ve learned that the world doesn’t revolve around them. Mummy’s a person, too.

It’s amazing, isn’t it, just how well this works out. Just as the cool girl manages to meet all the standards for patriarchal fuckability without ever getting neurotic about diets, the cool mum raises healthy, happy children without ever appearing to be doing any actual motherwork. Because motherwork, like dieting, is dull. The only reason any woman would bother with either of them is out of some misplaced sense of having to compete with other women. But what women don’t realise – despite the best efforts of men such as the Bad Moms writers to educate us on this score – is that the kind of woman who openly obsesses over her children or her looks isn’t worth emulating. On the contrary, she’s a selfish bitch.

For what could be more selfish than revealing to the world that the performance of femininity doesn’t come for free? That our female bodies are not naturally hairless, odourless, fat-free playgrounds? That the love and devotion we give our children – the very care work that keeps them alive – is not something that just happens regardless of whether or not we’ve had to reimagine our entire selves to meet their needs? No one wants to know about the efforts women make to perform the roles which men have decided come naturally to us. It’s not that we’re not still expected to be perfect partners and mothers. It’s not as though someone else is on hand to pick up the slack if we go on strike. It’s just that we’re also required to pretend that our ideals of physical and maternal perfection are not imposed on us by our position in a social hierarchy. On the contrary, they’re meant to be things we’ve dreamed up amongst ourselves, wilfully, if only because each of us is a hyper-competitive, self-centred mean girl at heart.

Don’t get me wrong. It would be great if the biggest pressures mothers faced really did come from other mothers. Alas, this really isn’t true. Let’s look, for instance, at the situation in the US, where Bad Moms is set. I have to say, if I were living in a place where a woman could be locked up for drinking alcohol while pregnant, where she could be sentenced to decades behind bars for failing to prevent an abusive partner from harming her child, where she could be penalised in a custody case on account of being a working mother – if I were living there, I’d be more than a little paranoid about fucking up, too. It’s all very well to say “give yourself a break, it’s not as though the motherhood police are out to get you”. Actually, you might find that they are, especially if, unlike Kunis’s character in Bad Moms, you happen to be poor and/or a woman of colour.

Even when the stakes are not so high, there is another reason why mothers are stressed that has nothing to do with pressures of our own making. We are not in need of mindfulness, bubble baths nor even booze (although the latter would be gratefully received). We are stressed because we are raising children in a culture which strictly compartmentalises work, home and leisure. When one “infects” the other – when we miss work due to a child’s illness, or have to absent ourselves to express breastmilk at social gatherings, or end up bringing a toddler along to work events – this is seen as a failure on our part. We have taken on too much. Work is work and life is life, and the two should never meet.

No one ever says “the separation between these different spheres – indeed, the whole notion of work/life balance – is an arbitrary construct. It shouldn’t be down to mothers to maintain these boundaries on behalf of everyone else.” Throughout human history different cultures have combined work and childcare. Yet ours has decreed that when women do so they are foolishly trying to “have it all”, ignoring the fact that no one is offering mothers any other way of raising children while maintaining some degree of financial autonomy. These different spheres ought to be bleeding into one another.  If we are genuinely interested in destroying hierarchies by making boundaries more fluid, these are the kind of boundaries we should be looking at. The problem lies not with identities – good mother, bad mother, yummy mummy, MILF – but with the way in which we understand and carry out our day-to-day tasks.

But work is boring. Far easier to think that nice mothers are held back, not by actual exploitation, but by meanie alpha mummies making up arbitrary, pointless rules. And yes, I’d love to be a bad mummy, one who stands up and says no to all that. Wouldn’t we all? I’d be all for smashing the matriarchy, if that were the actual problem here, but it’s not.

It’s not that mummies aren’t allowing each other to get down and party. God knows, we need it. It’s just that it’s a lot less fun when you know the world will still be counting on you to clear up afterwards.  

Glosswitch is a feminist mother of three who works in publishing.