Defamation and Slander

A recent ruling, consistent with established case law, serves as a reminder of the difficulty in choosing the legal basis for a lawsuit when a third party criticizes a company's activities. The temptation then arises to pursue a claim for defamation, which can be defined as publicly discrediting a company's products or services. Indeed, a defamation action based on the general principles of extra-contractual civil liability is not subject to the procedural complexities inherent in a lawsuit based on the Law of July 29, 1881, on the Freedom of the Press, which contains the main provisions for suppressing freedom of expression, including defamation.

However, and this is one of the fundamental principles protecting freedom of expression, abuses of this freedom, as defined and punished by the law of July 29, 1881, cannot be remedied under Article 1240 of the Civil Code, the cornerstone of general civil liability. In a matter where a fundamental error can be fatal to proceedings, what strategy should a company seeking to protect its image adopt? The ruling reiterates that when a company's reputation is damaged by statements, the law of July 29, 1881, retains its preeminence (I), whereas when the criticism targets the company's products or services, the appropriate basis is defamation (II).

I – Damage to a company's reputation must be prosecuted under the law of July 29, 1881, on the freedom of the press.

With reference to Article 29 of the Law of July 29, 1881, the Court of Cassation begins its reasoning by recalling that "It follows from this text that an attack on the reputation of a natural or legal person, which constitutes defamation, can only fall under the provisions of the aforementioned law." It should be noted that the aforementioned article provides:

“Any allegation or imputation of a fact that harms the honor or reputation of the person or body to whom the fact is imputed constitutes defamation. (…) Any insulting expression, contemptuous terms, or invective that does not contain the imputation of any fact constitutes an insult.”

Without reiterating all the conditions that must be met for defamation or slander to be established, we will mention the prerequisite common to both offenses: the statement must target a person, whether natural or legal (such as a company). However, since products and services do not, a priori, possess legal personality, it is clear that they are not eligible for protection under defamation or slander laws, which explains, in particular, why they remain protectable under general civil liability law.

On the other hand, companies, as legal entities, must absolutely act on the basis of Article 29 of the Law of 29 July 1881 when only their reputation is at stake.

In the reported case, a renewable energy company was fiercely attacked by a competitor who had disseminated hostile online content (written publications, photomontages) portraying it as a deceitful and manipulative company. The company sought an injunction to have this content removed.

The plaintiff had invoked the civil fault of denigration, perhaps to compensate for the statute of limitations on some of the remarks or their failure to meet the conditions constituting the offences of the law of July 29, 1881.

The Court of Cassation disagreed with the Court of Appeal's decision to rule in favor of the plaintiff, since this was not an attack on the products and services of the company targeted by the remarks of a competitor, but an attack on its reputation.

According to the Court of Cassation, the described facts could therefore only be prosecuted on the grounds of defamation. If, on the other hand, only criticism of products and services had been at issue, it would then have been possible to act on the grounds of disparagement, which is subject to a more lenient procedural regime.

II – Product and service criticism: denigration should be favored

Acting on the basis of denigration may indeed prove more comfortable.

To take just this example, we should recall the difference in limitation periods between actions based on defamation or insult, which are reduced to three months from the publication of the remarks, while actions based on disparagement are subject to a limitation period of five years.

Perhaps this was one of the motivations of the plaintiff who may have allowed the statute of limitations to expire on the basis of Article 29 of the Law of 1881, at least for part of the statements?

Denigration is indeed an exception and remains the only fault based on article 1240 of the civil code to resist the preeminence of the law of July 29, 1881 and its procedural traps.

Fundamentally, as we have seen, disparagement is characterized by publicly discrediting a company's products or services. It can also manifest itself in "the disclosure of information likely to discredit a competitor." Disparagement can take precedence over defamation, even when it involves an overall negative assessment of an economic actor's products.

It is not necessary for there to be a situation of commercial competition between the parties.

It is sometimes difficult to determine whether the infringement affects the company's products or services or the company itself, bearing in mind that this choice is crucial for the very existence of the procedure.

Criticism of a company's products and services generally reflects on the company itself, since the depreciation of its products or services undeniably impacts its reputation negatively.

Similarly, consumers will tend to confuse a company's bad reputation with the poor quality of its products or services.

In these circumstances, the interpretation by the plaintiff or plaintiff company of the statements it is pursuing and their presentation in the introductory document will be decisive in the judge's conviction regarding the classification to be adopted.

This presentation will likely leave more or less room for the opposing party's argument, who will seek a reclassification if it is favorable to him (for example, a reclassification as defamation to take advantage of the short limitation period attached to it), in order to obtain the nullity of the summons.

When acting on the basis of denigration, it will therefore be necessary to exercise particular vigilance by avoiding, for example, mentioning damage to the company's reputation, since there would be a risk that civil liability would be overridden by the law of July 29, 1881, with the consequence of having to comply with its procedural rules.

In the case under discussion, the argument for reclassifying the action as defamation prevailed, leaving the plaintiff company, despite being fiercely attacked by its competitor, without any further recourse since the statute of limitations for defamation had largely expired by the date of the Court of Cassation's ruling. Finally, it should be noted, which makes the issue of disparagement even more complex, that not every negative assessment of a product is necessarily wrongful, as case law allows for measured and fair criticism.