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Financial Times - Readers' Questions
Financial Times
08 September 2007
Q: I run a design agency. Nine months ago one of our creative directors left in controversial circumstances to set up a rival agency. She has been making damaging allegations about the originality of my company's designs and the integrity of our work. Most of these allegations have been made verbally but I am now in possession of a number of emails this woman has sent to past and current clients where the slurs are repeated. Where do I stand legally?
A: Any written allegations in emails or letters would be actionable as libel, the verbal allegations would be actionable as a slander without proof of damage (which is often required in a claim for slander) because the allegations are in a business context.
Provided your case is sound, you could recover financial compensation for the damage to your company's reputation and as a director for injury to your feelings. The amount of the damages would depend on the extent and severity of the allegations.
The only defences that the ex-director could have would be justification, if she could prove that the allegations were true, or qualified privilege, if she could prove that she had a duty to pass on the information to clients and she honestly believed them to be true.
If the ex-director could not prove the truth of the allegations but could show that she honestly believed them to be true, she may be able to rely on the defence of qualified privilege because clients of the agency would have an interest in learning whether the design company was providing original work.
You may also have other claims against the ex-director for misuse of confidential information or breach of her duties as a director if she entered into an agreement whereby she was not to approach clients of the agency after she left.
I would advise that a letter be sent to the ex-director warning her about the possible legal claims against her.
Sarah Webb is head of defamation at Russell Jones & Walker