Internet, communications, defamations

The truth rarely catches up with a lie

By Gary Reid

Friday, July 7, 2006

"The Internet represents a communications revolution. It makes instantaneous global communication available cheaply to anyone with a computer and an Internet connection. It enables individuals, institutions, and companies to communicate with a potentially vast global audience. It is a medium which does not respect geographical boundaries...The Internet is also potentially a medium of virtually limitless international defamation."

This paragraph from a legal text on the law of Internet defamation was quoted with approval by the Ontario Court of Appeal in its recent decision in Barrick Gold Corporation vs. Lopehandia. This is the first Internet defamation case in Canada to be decided by an appellate court. The outcome is pretty grim for people who use the Internet to spread lies about corporations or their directors and officers.

I have been nattering on recently in the pages of CFP about the bewilderingly careless attitude displayed by many people who pass on defamatory material through Internet e-mailing. I encountered some hostility to my views from a younger generation who believe the Internet is one big "free-for-all." The Barrick case should give those folks some pause and should go a long way to redeem me from the curmudgeon dungeon to which they have confined me.

Mr. Lopehandia, who lives in British Columbia, is in the gold mining business in Chile. Barrick is one of the world's biggest gold mining companies, headquartered in Toronto. Barrick shares are traded on a number of stock exchanges in North America and Europe. Lopehandia asserted a right to a mining claim in Chile that Barrick had added to its inventory. He threatened action unless Barrick paid him three million dollars within 10 days of his notice. Barrick investigated and then dismissed Lopehandia as a simple opportunist.

What ensued was months of wild allegations about Barrick published on the Internet by Lopehandia. Included in his many accusations against the company and its directors and officers were allegations of serious criminal conduct, including fraud, tax evasion, money laundering, manipulation of world gold prices, misrepresentation to government officials, improperly influencing government officials, obstruction of justice, pursuing organized crime, attempted murder, arson, genocide and crimes against humanity.

And I'll bet you thought the gold mining business was pretty boring.

Several major shareholders of Barrick, as well as at least one stock exchange, contacted the company for an explanation of these charges. There was also evidence of the wide spread dissemination of the accusations through private e-mailing sources who were not connected to Lopehandia. Unable to stop the flood of lies, Barrick sued Lopehandia in Ontario.

The trial judge awarded in favour of Barrick but only in so far as it related to business damage. The award was $15,000. Barrick appealed the amount and the Ontario Court of Appeal set aside the award and awarded $75,000 for general damages, and $50,000 of punitive damages.

The appeal court said that the trial court judge failed to take into account the ubiquitous nature of the Internet.

"Communication via the Internet is instantaneous, seamless, inter-active, blunt, borderless and far-reaching. It is also impersonal, and the anonymous nature of such communications may itself create a greater risk that the defamatory remarks are believed...These characteristics create challenges in the libel context. Traditional approaches attuned to "the real world" may not respond adequately to the realities of the Internet world."

The court quoted from an article in a legal journal.

"Although Internet communications may have the ephemeral qualities of gossip with regard to accuracy, they are communicated through a medium more pervasive than print, and for this reason they have tremendous power to harm reputation. Once a message enters cyberspace, millions of people worldwide can gain access to it. Even if the message is posted in a discussion forum frequented by only a handful of people, any one of them can republish the message by printing it or, as is more likely, by forwarding it instantly to a different discussion forum. And if the message is sufficiently provocative, it may be republished again and again. The extraordinary capacity of the Internet to replicate almost endlessly any defamatory message lends credence to the notion that "the truth rarely catches up with a lie".

I would expect to see more defamation actions for Internet libel now that the court has clarified the law. It is also not unreasonable to suppose that a corporation might go after individuals who spread defamatory material through private e-mail lists much in the same way the American music industry pursued individuals guilty of amassing large downloaded music files without payment of royalties.

Note: As a correction to a legal misstatement that appeared in my earlier column, corporations can sue for defamation, but they cannot collect damages for injured feelings, because they have none.

Gary Reid is a freelance writer and a public affairs consultant. Gary Reid, Opinion 2006 2005 2004 2003 2002