As a general rule, it may be possible to recover damages from 
someone if they harm you by spreading false information. But what if a bad (and untrue) reference costs you a job, a loan or some other benefit? Can you sue them for defamation under those painful circumstances?
Due to a something called a “qualified privilege”, you may want to ease your finger off the litigation trigger and talk to a cool headed defamation lawyer first.
The law of defamation carves out a special exception, technically described as a “qualified privilege,” for certain types of communication such as references, responses to police inquires and communication between parents and teachers. This being law, there are exceptions to the exception, but they apply only in specialised and difficult-to-prove circumstances. That does not necessarily mean all is lost, however.
Defamation 101
A successful suit for defamation requires the publication to a third party of a false statement of fact that does some measurable harm to the subject of the statement.
A statement made only to one’s face, no matter how harsh, is not defamatory. Neither is a statement of opinion. “So-and-so is untrustworthy,” is likely not actionable; although “So-and-so is a thief,” might be. Finally, the damage done by the false statement must be financially quantifiable, which may present a proof problem in some cases.
A false reference, though, would seem to be the kind of statement that could meet these criteria, absent that bothersome privilege.
The Qualified Privilege
Historically, however, some types of statements were deemed so important that the originator has been protected from the risk of being sued, even when the statement is false, public and demonstrably damaging. References are among these statements.
Right or wrong, courts and legislatures have determined that public policy is best served when those making references can do so in a relatively unrestrained way.
There are limits, however. The reference must be used for the intended purpose. A bad employment reference should not be used to deny someone credit, for example. The bad reference also cannot be motivated by malice, which is notoriously difficult to prove.
The exceptions to the privilege should not be understood to provide much comfort to the subject of a bad reference. But does that mean that there is nothing to be done?
Other Approaches
If you have been harmed by a bad reference, it may still be worth consulting a lawyer. The harm can certainly be real enough, and even if the law of defamation will not provide a remedy, there may still be ways to mitigate the damage, depending on your particular situation.
The attorneys at Owen Hodge Lawyers would be happy to discuss the range of options you may have available. Please call us at 1800 770 780 to schedule a consultation at your earliest convenience.
