The tort of injurious falsehood (also known as trade libel) consists of the malicious publication of a falsehood concerning the plaintiff that leads other persons to act in a manner that causes actual loss, damage, or expense to the plaintiff. Injury to reputation is not a necessary element to this tort.
Claims for injurious falsehood often arise in the context of comparative advertising. The tort may also be characterized as commercial disparagement, slander or title, or malicious falsehood depending on the context of the publication.
The plaintiff may sue for interference with any potential advantage including those of a non-commercial nature. A common claim, however, is that the injurious falsehood amounts to a disparagement of the plaintiff’s property, products, business or services which affects their marketability. The plaintiff has the onus of proving that: the statements were false; the defendant acted maliciously with intent to cause injury without lawful excuse; and actual economic loss has occurred or will occur as a result. A plaintiff or its products normally must be identified by name in the impugned publication, but identification by implication may be sufficient, such as where the plaintiff enjoys almost exclusive dominance of the market
A person is entitled to make general, unfavourable comparisons of competitive merchandise or services with their own. However, this entitlement does not extend to specific, false comparison between the plaintiff and the defendant’s goods, or to false, disparaging statements regarding particular aspects of the plaintiff’s goods or services.
For further information, see McConchie and Potts, Canadian Libel & Slander Actions, chapter 32 “Related Causes of Action”
Roger D. McConchie and Alan McConchie have extensive experience providing pre-publication advice and litigation services in relation to injurious falsehood claims.