When a Customer Sues Your Business for Defamation, and the Case Moves to the High Court

 Businesses deal with difficult customers every day. Occasionally a dispute over a sale, a repair or an unpaid bill escalates into a defamation claim. The customer alleges that something said about them by staff, on a notice board or online damaged their reputation. These cases can run for years, through the trial court and then the High Court.

What a claimant must prove. A claimant must show that the words were defamatory, that they referred to the claimant, and that they were published to at least one third party. Words spoken between the business and the customer alone are not "published".

Defences available to businesses.

• Truth (justification): if the statement is substantially true, the claim fails.
• Qualified privilege: statements made in good faith to someone with a legitimate interest in receiving them, such as a report to the police or an insurer, are protected unless made with malice.
• Honest opinion (fair comment): a genuine opinion on a matter of public interest, based on true facts.
• No publication or no identification: often the simplest point, and one that is frequently overlooked.

The appeal stage. After judgment in the Magistrates' Court, the dissatisfied party has thirty days under section 79G of the Civil Procedure Act to appeal to the High Court. The High Court may extend time, but only on good reasons. Parties also commonly apply for a stay of execution under Order 42 Rule 6 of the Civil Procedure Rules. The applicant must show substantial loss, apply without unreasonable delay and offer security. Many High Court battles are fought over these applications before the appeal itself is heard.

How we defend businesses. We test whether there was publication and identification at all. We marshal the evidence supporting truth or privilege. At the appeal stage, we hold the other side strictly to the timelines and to the conditions for extension or stay.

Takeaways. Train staff to handle disputes with customers privately and factually. Avoid naming customers on notices or social media. Keep records of what was said and to whom. If a claim arrives, take advice early, because defences depend heavily on evidence gathered at the start.