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Rival Companies Defamation Claim ‘Not Worth the Candle’

A company that sued a trade rival for slander and malicious falsehood, claiming that an over-enthusiastic salesman had disparaged its business model to a potential customer, has had its case struck out on the basis that pursuing the matter to trial would ‘not be worth the candle’.

The company sued its rival after one of the latter’s sales staff allegedly made statements to a potential client which it perceived as seriously damaging to its reputation. The Court of Appeal accepted that the company had a clearly arguable case in defamation if it could establish that the words complained of were in fact spoken and were capable of bearing the meaning contended for.

However, in upholding a first instance decision to like effect, the court noted that the company had in fact won the business of the client concerned and had therefore suffered no direct financial loss. The rival company had also given an undertaking that it would use its reasonable endeavours to ensure that statements of a similar kind were not made by its sales staff in the future.

Despite the company’s insistence that its case was ‘not about damages’, the court decided that it had achieved all that it could reasonably expect to achieve through the litigation and the substantial costs of a trial would not be justified.  The court ruled: “The game is not worth the candle. An over-enthusiastic, misguided and ill-intentioned piece of salesmanship by a former employee of the company, if such it was, has caused no apparent damage and lessons have been learned.”