Corporate libel claims: who should sue?

Companies can sue for libel in the same way as individuals. In a legal environment which is exceptionally friendly to claimants, UK media organisations fear claims by corporations since they are likely to have the financial muscle to take advantage of that environment. However, a recent hearing in the libel proceedings between Elite Models and the BBC has highlighted the need for corporations contemplating libel actions to choose the right claimants.

The BBC broadcast a programme in which secretly filmed individuals within Elite were portrayed as lascivious and exploitative towards young models. Three Elite companies sued the BBC for libel. The BBC applied to strike out the claim, arguing that its allegations against the individuals could not in law be attributed to the corporations for which they worked. Alternatively, if any Elite companies had been defamed by the programme they were not the entities which had begun the proceedings.

The BBC’s application failed – although only just. Mr Justice Eady commented that “the court needs to be alert to the possibility of corporate entities being ‘put up’ to bring claims for libel in respect of allegations truly reflecting upon individuals.” However, there was just enough connection between the allegations made in the programme and the companies which had begun the proceedings for the claims to “squeak through” to trial. (The action has since been settled on confidential terms.)

The lesson for companies is to establish with their lawyers at the outset who will be considered by the court as the subject of this new breed of trenchant investigative journalism. The court will look carefully at what allegations are suitable for libel claims brought by companies concerning the activities of individuals within them and (where a group of companies is involved) at which companies are the right claimants.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.