Those wily plaintiff’s attorneys may try to find a way to circumvent an insured’s defamation protection, by giving the peril another name. To keep all bases covered, make sure your client’s internet, tech and media policies protect against all the different types of defamation as well as the alternative claims a plaintiff might allege.
Defendants have had a powerful weapon against many claims for libel and slander since the U.S. Supreme Court began building Constitutional defenses with New York Times vs. Sullivan in 1964. That case held that a public official could only recover for defamation if the public official could establish “actual malice.” As developed through that case and others, actual malice has nothing to do with a mean spirit or evil intent.
In First Amendment law, actual malice means the defendant published or disseminated information that was false and defamatory while either knowing that it was false or while having a reckless disregard for the truth. Merely proving the statement was false was not enough for a public official plaintiff to win, even if the false statement was negligently made by the defendant.
New York Times vs. Sullivan was the seminal case in a remarkable string of Supreme Court decisions providing Constitutional defenses for defendants in free speech and free press cases. One of the later cases extended the actual malice standard to plaintiffs who were public figures as well as public officials.
Another case established that any recovery of punitive damages for a defamation case must also have been a situation where the defendant displayed actual malice, even if the case didn’t involve a public official or public figure. And actual malice must be established not by a preponderance of the evidences, the normal standard in civil cases, but by clear and convincing evidence — a more difficult standard of proof for the plaintiff.
Because of the considerable Constitutional defenses, plaintiffs began trying to evade them by pleading a different kind of case. Rather than just alleging libel or slander, they began suing for things like infliction of emotional distress, outrageous conduct and the false light form of invasion of privacy. The plaintiffs’ attorneys hoped they wouldn’t have to contend with the Constitutional hurdles they would face in a defamation case.
By and large, courts have been stopping the end run. If the essence of the case looked like defamation, even if the suit was for something else, courts have been willing to apply the same Constitutional defenses that apply to defamation claims.
What It Means
How does this involve defamation insurance? Because an insured may face a suit that’s trying to avoid Constitutional defenses by alleging something else, and it’s important that the policy deal with that possibility.
That’s why insurance companies that understand these types of cases broadened their coverage. It isn’t just coverage for “libel and slander” claims any more, at least for companies that understand this. It’s coverage for “any form of” claims like defamation, disparagement or harm to the character, reputation or feelings of any person or entity, including libel, slander, product or service disparagement and trade libel. But they don’t stop there either, often going on to provide coverage for infliction of emotional distress, outrage or outrageous conduct.
Fortunately, most companies providing specialized media insurance do take that broader approach, even if they do it just to match their competitors rather than really understanding the reasoning behind it. Unfortunately, companies providing media type coverages under non-media policies, such as internet, miscellaneous professional and even some technology liability policies, do not always offer the extended protection. Whether those carriers fail to offer the expanded coverage because they don’t understand the issues or lack a commitment to these kinds of risks probably isn’t the real question. As always, the central question is what policy is best suited to each particular insured’s needs.