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DEFAMATION: CO-OWNERS vs. DIRECTORS

Duygu Barbaros, ASCQ in-house lawyer


 

It is not always desired to be part of a Board of Directors for a Syndicate of Co-ownership. One reason is the human factor. It is too common for co-owners to blame everything on their directors when things go wrong.
Annual meetings do sometimes resemble battle fields between co-owners and directors.

 

Some might react by saying: "it's all part of the job!"

However, what happens when some co-owners go too far? When and how should directors put an end to offensive and intimidating behaviour? Once there is a legal pursuit, who should pay for the costs? Can a Syndicate of coownership claim moral damages? Unfortunately, similar questions are becoming increasingly relevant to life in divided co-ownership.

 

Being a director can be a full time job by obligation or by choice; with a bad salary or no salary at all. Regardless, it does not have to be a burden.

 

It can become unfair when co-owners start lacking respect by their conduct in general or by means of; throwing insults, having an aggressive manner of speech, threatening to sue, sending letters to other coowners that contain accusations of directors being liars or crooks, smirking or making gestures that imply disregard and alike.

 

Diagnose and react

It is crucial to recognize, at a point in time, that one is being harassed, insulted, or attacked personally and that it should stop.

 

We can say without hesitation that a director should never be anxious about running into a co-owner or coowners. If this happens, a director must react.

 

It is important to mention that physical intimidation is entirely different from defamation and if you feel at any point physically intimidated by one of your co-owners we suggest you call the police.

 

Harassment and defamation

For the purposes of our discussion, we will limit ourselves to the subject of defamation. Defamation can be verbal or written, public or private, direct or implicit, intentional or caused by negligence. Defamation affects the reputation of someone. It also includes all kinds of acts or behaviour that tends to diminish the self esteem of a person.

 

What is Defamation?

The instigator of defamation can be held responsible even though the information circulated is or might be true. Defamation consists of the intention combined with an act; seeking to damage one's reputation.

 

For most people, their reputation is crucial, therefore, any negative quotation about them can have troublesome consequences in their work environment apart from being humiliated and attacked as a director and as a person. If defamation causes harm to the director it targets, damages can possibly be assessed. The concept of defamation includes insults, rudeness, or derogatory words that damage a person's honour, dignity or reputation.

 

The Court may also decide to award moral damages as compensation for harm to a director's honour, reputation or dignity.

 

A director does not have to deal with insults or other unpleasant behaviour. If it happens, he/she should oppose, for example, by calling a lawyer who would presumably start by sending out a letter of demand to the involved coowner(s) demanding them to put an end to defamation and to make a formal apology within a given delay. The lawyer would also warn them about legal action that might be taken if they fail to comply with the said demand.

 

O.K. but who pays?

Unfortunately, there aren't many lawyers who work for free, if any. Therefore somebody has to pay for the legal proceedings when required. The question is who? Is it the director or the Syndicate of Co-ownership?

 

There are two different opinions on the subject of who pays for the legal costs pertaining to a defamation case.
The first opinion argues that the Syndicate of Co-ownership should pay since a director would have not been subjected to defamation if he/she was not managing the director position within the divided co-ownership. The second opinion is that such expenses might be seen as "personal expenses" because the damage is "personal".

 

Individual and global

In our opinion, it makes a significant difference when the entire Board of Directors is targeted by defamation rather than one director in particular. The jurisprudence recognizes that a non profit entity such as a Syndicate can also enjoy a reputation.

 

No director should have to endure harm to his honour, dignity, or reputation. Before events get to a point where legal intervention becomes necessary, directors and other co-owners should discourage instantaneously wrongdoings towards a director or to directors. Being a director does not stand for being a target for mistreatment!

 

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