Injurious Falsehood is a lesser-known tort when compared to defamation, despite both being causes of action arising from false publications that result in damage.

Although defamation proceedings have gathered increasing attention in Queensland in recent times, businesses may find that a claim in Injurious Falsehood is more suitable in their specific circumstances.

What Is Injurious Falsehood?

Injurious Falsehood, sometimes referred to as malicious falsehood, is a cause of action designed to protect businesses and individuals from false statements that cause financial harm.

Injurious Falsehood typically applies in commercial contexts where a party suffers a quantifiable loss due to a false statement about their products, services, or business practices.

Injurious Falsehood is a tort and is not provided for in legislation. The four elements in a claim of Injurious Falsehood are: –

1. A False Statement: The statement in question must be untrue and typically relate to the business, goods, services, or property of the affected party.
2. Published to a Third Party: The false statement must be made or communicated to at least one other person (i.e., published).
3. Malicious Intent or Recklessness: The person making the statement must have intended to harm the claimant or acted with reckless indifference as to whether harm would occur. Malice can be implied if there is no genuine belief in the statement’s truth.
4. Actual Financial Loss: Injurious Falsehood requires proof of actual financial loss resulting from the statement. This could include lost sales, contracts, or business opportunities directly tied to the statement’s publication.

In Queensland, Injurious Falsehood claims are not common, but when they do arise, they typically concern a business-to-business dispute.

Injurious Falsehood aims to remedy the monetary damages a business suffers due to another party’s intentionally or recklessly false statements.

Key Differences Between Injurious Falsehood and Defamation

While Injurious Falsehood and defamation both concern false statements and damage to reputation, the two have distinct elements.

These differences can be summarised as follows:-

1. Defamation serves the primary purpose of protecting reputation, whereas Injurious Falsehood serves to protect against economic loss.
2. Injurious Falsehood involves the element of malice, which defamation does not.  In defamation, intent is not expressly relevant. This may create a higher evidentiary threshold in providing Injurious Falsehood.
3. Defamation is provided for in legislation (Defamation Act 2005 (QLD)) as opposed to Injurious Falsehood which is only provided for in common law.
4. To succeed in a defamation claim, a plaintiff must show that they have suffered ‘serious harm’. This creates a significant hurdle for many defamation claims. Whereas Injurious Falsehood does not require serious harm to be shown. Rather, any level of financial loss can be claimed. Damages for Injurious Falsehood are assessed on the ordinary principles of calculating damages.
5. Defamation typically arises in personal or public reputation contexts, such as statements made by the media, on social media, or in everyday public discourse. Injurious Falsehood is more common in commercial or business disputes, where a competitor or rival may spread misinformation about a business or product with the aim of gaining a competitive advantage.
6. An action in defamation must be commenced within 1 year from the date of the publication, whereas a claim in Injurious Falsehood must be commenced within 6 years of the cause of action arising.

Final Thoughts

If your business or professional reputation has been harmed by a false statement and that harm translates to a quantifiable financial loss, Injurious Falsehood may be the more appropriate legal remedy than defamation.

In our experience, Injurious Falsehood is underutilised in Queensland, and may serve as the most appropriate cause of action for businesses facing reputational damage by competitors.

If you consider that Injurious Falsehood may be applicable to a situation being faced by your business, you should contact one of our expert lawyers to discuss your options.

The content of this publication is intended to provide a summary and commentary only. It is not intended to be comprehensive nor does it constitute legal advice, and has been prepared based on applicable legislation and case authority at the date of publication. You should seek legal advice on specific circumstances before taking any action.