Thursday, 16 March 2017

Tanishka Mandal

Malicious Falsehood: Protecting Economic Interests


Malicious falsehood is the making of false, malicious statements that concerns the plaintiff to some third party which adversely affects the pecuniary interests of the plaintiff. One can bring a claim against the defendant for malicious falsehood if the defendant has published a false statement which contains the claimant, the claimant’s business, property or other economic interests, and the statement has caused the claimant financial loss.

A claim for malicious falsehood can arise when a competitor makes a false statement about others goods or services, and amounts to cause financial loss. Malicious falsehood has slander of title or slander of goods as its types.

To sustain an action against slander of title, plaintiff must prove the following essentials :

i) Statement or representation was false;

ii) Statement was published;

iii) Statement was made maliciously i.e. with an intent to injure the plaintiff or with some dishonest or improper motive;

iv) The plaintiff suffered financial loss as a consequence.

           The tort of malicious falsehood is also to be differentiated from the tort of defamation. Defamation provides remedy for words which injure the plaintiff's reputation. Words that injure the plaintiff without injuring his reputation would be outside the tort of defamation. But both of these torts may overlap. If a false statement concerning plaintiff is maliciously made causing him financial damage and also affects his reputation, the plaintiff will have a cause of action for malicious falsehood and also for defamation although he cannot recover damages twice over for the same loss.

In England, the plaintiff is relieved of alleging or proving special damage by section 3 of the Defamation Act, 1952 "(a) if the words upon which the action is founded are calculated to cause pecuniary damage to the plaintiff and are published in writing or other permanent form, or (b) if the said words are calculated to cause pecuniary damage to the plaintiff in respect of any office, profession, calling, trade or business held or carried on by him at the time of the publication." there is no corresponding legislative enactment in India.

Case Laws :

Joyce v. Motor Surveys Ltd., [1948] Ch. 252
The plaintiff became the tenant of one of the defendants' lock-up garages in order to have a premises where he could be registered as a tyre-dealer. Subsequently, the defendants wanted to evict the plaintiff in order to sell off the entire property with vacant possession. They, therefore, told the post-office not to forward any more mails at that address and informed the tyre manufacturers' association that the plaintiff was no longer trading there.
The conduct of the defendants was held to constitute malicious falsehood.

Hedley Byrne v. Heller 
The court in this case has opened the door to liability for negligent statements made by those who are in trust capacity the court further held that the only reason to exonerate the defendants was that they had given the references stating stating "Without responsibility despite the fact" that they had due to care.

Conclusion :
Claimants who demonstrate that the statements that were complained, caused them financial loss get the damages. The main aim of malicious falsehood is to protect the economic interests of people. Now with the time and development in the law of torts the economic interest can be better protected by the law.