Irish courts handle more defamation cases than the entire UK
ISME (Irish Small and Medium Enterprises Association) has called on the Government to strengthen the Defamation Amendment Bill to provide meaningful protections for small businesses and citizens against costly and often unjustified defamation claims.
ISME say current defamation laws are making life extremely challenging for SMEs, particularly in the retail and hospitality sectors, where businesses face an increasing volume of defamation threats and cases. Irish courts handle more defamation cases than the entire UK, despite Ireland having a population twelve times smaller.
The proposed Defamation Amendment Bill is weak, and does not go far enough in ensuring SMEs are not unfairly targeted by costly legal actions.
The key concerns raised by ISME about the Defamation Amendment Bill in its current form include:
- Retailers and SMEs cannot afford to fight defamation cases.
- Even when they win, they rarely recover their legal costs.
- Most cases settle for between €5,000-€7,000, with legal teams receiving €20,000-€30,000 in fees.
- The absence of a harm test will allow abusive, vexatious and trivial claims to continue, and will render the reform bill a “legislative dead letter.”
- ISME recommends capping general damages at €75,000 to bring defamation awards within Circuit Court jurisdiction, although ISME also supports defamation awards in excess of the Supreme Court guidance where harm is demonstrated by plaintiffs.
- Solicitors are using defamation threats to silence complaints made to the Legal Services Regulatory Authority (LSRA), with no action taken to prevent this abuse.
- Victims of sexual assault and rape are being muzzled by perpetrators exploiting the Defamation Act through abusive lawsuits.
- The proposed anti-SLAPP (Strategic Lawsuits Against Public Participation) protections are legally inadequate and fail to penalise vexatious defamation claims as required under the EU SLAPP directive.
- The EU SLAPP directive also requires that a plaintiff suing a person engaged in public participation must bear the burden of proof that such claim is well-founded.
- No provisions exist to protect satire or comedy from defamation claims.
Neil McDonnell, Chief Executive of ISME, said: “Ireland’s defamation laws are not fit for purpose. SMEs are being forced to settle cases they should never have faced in the first place, simply to avoid exorbitant legal costs. This has created a legal climate where defamation is a lucrative business for a small number of lawyers, while businesses, citizens and the media suffer. The Government must introduce stronger protections to prevent abuse of the system and to safeguard SME livelihoods.”
The threat of legal action has led to widespread implementation of a “no challenge” policy in retail, where businesses refrain from protecting stock for fear of defamation claims. One major Irish grocery operator budgets a loss of €70k-€90k annually for each of its convenience stores and €120k-€140k for its supermarkets.
A case study from an ISME member details how a licenced premises successfully defended a defamation claim in the Circuit Court, only to face a High Court appeal threat unless they agreed to cover the plaintiff’s legal costs. The business ultimately had to pay €3,000 in the settlement and absorb €12,375 in legal fees, with a subsequent rise in their insurance premium. This case underscores how the system incentivises legal threats against SMEs, regardless of merit.
“Rule of law does not mean rule by lawyers. It is time for the Dáil to assert itself in legislative terms, and stop abusive and vexatious defamation litigation, which offends the Irish constitutional right to express opinion, and the European Convention on Human Rights”
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Issued on behalf of ISME by Heneghan
