How incredible it is that a single shareholder in a PLC can cause the company tremendous amounts of financial damage just by using Twitter and other social media. Defamation by shareholders, often disgruntled shareholders, against their own company, is one of the most irrational acts that we have seen in recent years.
In the case of the international gold mining company RRR and its shareholder Gary Carp, the consequences of Mr Carp posting defamation against the company were particularly serious to the company and to the thousands of investors who at one point saw the value of their shares plummeting very sharply.
The company was left with no choice but to issue legal proceedings against its shareholder in order to protect the interest of the rest of its shareholders who were being scared off by dangerous speculation and by highly defamatory conversations that Mr Carp initiated on various investors’ forums.
This was probably the first ever case in the UK of a PLC suing a shareholder over defamation on internet forums and on Twitter. The dilemma that the company faced, whether legal action for defamation against a shareholder would be viewed as a bullying act or whether it would be accepted as an act of protection, appreciated by other investors, was resolved very quickly when following the successful law suit, it received nothing but positive and encouraging feedback from its investors. The investors viewed the initiation of legal proceedings against their fellow shareholder as a demonstration of leadership by the company’s board of directors rather than an oppressive act and their confidence in the company grew. Read about the case of legal action against a shareholder instructed by Cohen Davis solicitors here.
There is now evidence that proves that between 16 per cent to 20 per cent of online reviews might be fake. Fake online reviews could be reviews in favour of a company or against it. If they are against it, they are likely to be defamatory and this is where we can help as a specialist internet law defamation law firm .
However, you are most likely to benefit from the support of an expert social media defamation solicitor if you want to remove a defamatory review without the need to obtain court orders.
Most Lawyers, particularly defamation solicitors and social media lawyers, are very well trained in spotting a lie. Investigating evidence and finding inconsistencies…
Although there is no specific law in the UK that prohibits publication of fake online reviews, the Consumer Protection from Unfair Trading Regulations 2008 prohibits unfair commercial practices and faking online reviews is not doubt unfair.
It has now officially been proven that between 16 to 20 percent of social media reviews are fake.It is very possible though that fake online reviews can never be controlled due to the basic human instinct of survival.
Fake online reviews
Some in the industry always believed that the most frequent authors of fake online reviews are disgruntled customers and former employees, business partners and business associates. But it is now clear beyond doubt that the biggest culprits of fake reviews against business are business owners themselves.
Recently I purchased a luxury car from a respectable dealership. I ended up having a very bad experience and wrote the following review:
“I was horrified with the service and my experience was terrible. Don’t use this company”.
Today I received a letter from the dealership’s lawyers threatening me with legal action for defamation. Can I be sued just for saying that I had bad experience?
Our defamation lawyer answered:
Generally speaking, if you make statements such as “horrific” and “terrible” without being able to back them up with facts, and without giving all the relevant information in a balanced way, then you could be liable for defamation against the company because your statement is lowering the reputation of the company in the eyes of right minded people.
Handling the Media in a Crisis: Why advance preparation to effectively deal with online reputation crisis management will pay off.
Handling the media during times of crisis following online defamation has almost always proven to be a challenging task for the large, medium as well as for the smaller commercial organisation.
Defensiveness often results in the opposite consequences of what was intended, making things much worst for the already suffering company with otherwise perfectly workable messages being twisted and manipulated to cause your organisation maximum damage.
Following defamation of a company on the internet and the subsequent reduction in the value of their shares, can shareholders sue the defamer for damages?
Under some circumstances, the shareholders might be able to sue but their real legal challenge would be to prove causation between the defamation and the loss that they incur through the reduction of the value of their shares in the defamed company.