Social media opens SMEs to legal problems with defamation: Legal expert

Businesses are largely unaware of the legal ramifications of posting defamatory material on social networking sites and must be aware of a rise in litigation, a legal expert has warned.

Nicholas Pullen, partner at TressCox Lawyers, says a number of companies are holding back from joining the social media frenzy due to the legal difficulties these networks cause.

“Right now, if you have a social media network or a blog on your site, you are in no different a position of a major publishing network or a newspaper, and are literally in control of what comes into your site. This opens people up to defamation cases.”

But Pullen says most businesses aren’t aware of these risks, and continue to publish material online that could potentially be seen as defamatory in a court.

“What SMES need to be careful about is not just issues attached to a person but competitors as well. It’s all very well to talk about defamation, but the trade practices act could come into a play. If a forum is opened in relation to the building industry, and that is run by a company, then if a person makes a comment about a competitor that is highly suspect – then you may have a trade practices issue depending on the comment.”

Pullen points to a number of cases, including a recent case in Australia in which a teenager pleaded guilty to defamation after posting some comments on a social network.

In relation to businesses, Pullen says this litigation is causing them to “seriously consider shutting down these particular sites that are attached to their own online offerings”, and expects the number of cases to grow as social media becomes more popular and widespread.

Additionally, Pullen says advisory warnings should be considered as an addition to social networks, warning members of the risks of publishing defamatory material.

“The nature of my practice sees me deal with a lot of online publications, and increasingly they are funding material that is being posted that has, so to speak, slipped under the radar, and is causing them legal problems.”

Pullen warns businesses to ensure they are vigilant in examining every single piece of material that appears on both their websites and popular social networks.

“Ideally what businesses need to do is vet everything that goes on to a network, or ensure there is a moderator who knows what could be potentially causing exposure to legal liabilities.”

However, Pullen says this is a massive problem for SMEs who may not be able to afford the ability to hire someone specifically for watching social media posts – opening them up to a higher risk of posting defamatory material.

“It really is a big problem for these businesses, because they can’t put someone on full-time like a bigger business could. It certainly doesn’t mean they need to shut these networks down, but they just have to place a bigger importance on watching all that material they use.”

“It just boils down to the ease at which these things can be posted. In the past you would have a filter in place to ensure the least exposure to liability, but now companies are publishing material and receiving material back, making them legally responsible.”