Libel law is being used to deter legitimate complaints in the property sector. The law needs clarification.
Review libel law in property disputes
A businessman bought a new villa in Abu Dhabi, made all the payments and was supposed to collect the keys in September 2008. More than two years later, he found out that not only had the company delayed delivery, it had sold the villa and cancelled his contract. Even after handing the property to another buyer, the developer continued accepting payments.
That businessman is still in a legal battle with the developer. He has also been threatened with a counter-lawsuit for defamation simply because he made his complaints public.
Such stories are unfortunately becoming more common. The result is that investors are reluctant to go public for fear of lengthy and costly legal battles - even if they believe they have a legitimate grievance. As a National article detailed yesterday, the number of defamation court cases has risen, at least anecdotally, against expatriates who have criticised developers.
A contractor who tells colleagues that a company is insolvent might be sued, wrote National business reporter Kevin Brass. A case might be brought over a comment at a meeting or even an email. And defamation cases in the UAE are a criminal matter, raising the stakes.
That litigiousness has a chilling effect on business that harms the property sector. If real problems cannot even be discussed, they will never be addressed.
Certainly, clearly defined libel laws have a vital role in every society, to enforce a minimum level of civility and deter false claims that harm reputations. But there has to be room for truthful, legitimate complaints. It is essential that libel laws are crystal clear for the public, companies and lawyers.
Particularly in a recovering property sector, tenants and buyers must have recourse to the courts as a last resort to solve disputes. Lawsuits or criticism might tarnish companies' reputation, but stifling criticism of developers - and subsequently preventing people from seeking their rights - tarnishes the reputation of the entire sector. The practice also emboldens big companies to act with impunity.
Libel laws need to be clarified so complainants know their exposure. And the Public Prosecution, which makes an initial judgement whether to charges suspect, has a key role as a gatekeeper.