Managing Risk through PII Scheme: Social Media and Defamation

09 May 2023, by Dennis Goh, Claims Manager, Echelon Claims Consultants Sdn Bhd and Johan Shahar, Vice President, FINPRO – Malaysian Bar, Marsh Insurance Brokers (M) Sdn Bhd.

Social media is one of the most powerful communication tools today, with the ability to offer greater opportunities, open doors for business in the corporate world as well as in the personal space, and realise benefits beyond imagination.  However, these benefits can potentially cause massive risk exposures, such as defamation, leading to costly legal proceedings.

Does the Professional Indemnity Insurance (“PII”) Policy cover defamation claims?

The Malaysian Bar Mandatory PII Scheme provides coverage to lawyers against civil liability pursuant to a claim that arises from their legal practice.  This includes coverage towards statements said or published by lawyers in the discharge of their duties.

Generally, coverage would be provided where the statement complained of is made by the lawyer in his or her professional capacity, and in the discharge of their legal duties.  By contrast, coverage will not be provided where the statement is personal in nature, eg a lawyer’s personal opinion, views or criticism on a matter which when expressed was not within his/her professional duty/capacity.  Each claim will be assessed by the Insurer on a case-to-case basis.

In a recent claim, a lawyer had made statements in his Twitter account pertaining to the character of the counterparty in a child custody battle, in which the lawyer had been retained to act.  The Insurer had decided to refuse coverage on grounds that the impugned statements were views personal to the lawyer and when made, were not made within the lawyer’s professional duty and obligation to their client.

In another claim, a lawyer was made a subject of a defamation suit for statements made by the lawyer in a press conference held by the lawyer’s client, which was subsequently published by the lawyer in his Facebook account.  The impugned statements were in relation to the findings of the High Court judge after trial which the claimant, who was the subject of the adverse findings, claims to be defamatory.  The Insurer had no issues providing coverage as it was clear that such statements were made in the lawyer’s professional capacity.

Although using social media has benefits, it is important to always be aware of the potential risks involved.  Anyone actively using social media should recognise the potential blurring of boundaries between personal and professional use.  When posting online, all professionals owe the same level of professional and ethical obligation to their clients and counterparties as they do offline.

It is also good to take note of the Legal Profession (Publicity) Rules 2001[1] that governs what a lawyer can and cannot do in respect of publication.  Some of the rulings are as below:

Rule 5[2] provides that a lawyer who publicises his practice shall not do so in a manner that will likely diminish public confidence in the legal profession or bring the profession into disrepute or in a manner that can be regarded as ostentatious, in bad taste, misleading, deceptive, inaccurate, false, sensational, intrusive, offensive or in any other way unbefitting to the dignity of the legal profession.

Rule 13[3] provides that a lawyer may produce for distribution a journal, magazine or newsletter relating to the practice of his firm but that such publication must only contain information approved by the Bar, law notes or legal articles.  The publication may not be distributed to the public at large, but only to members of the firm, clients, potential clients who had enquired about the firm’s services or any person who the lawyer has had or may have professional dealings with.

Rule 21[4] states that any publication stored or transmitted through electronic media must be done in a manner determined by the Bar and shall not contain any information pertaining to the lawyer or his firm except for information approved by the Bar.

Social Media Etiquette Reminder

Always be professional, courteous and respectful.
Do not mix business and personal matters.
Use caution when posting.
Be truthful and accurate; to ensure that nothing may be misleading, deceptive, inaccurate or false. Review content before posting to see whether it contains any misrepresentation of fact, omission of fact or unverified information.
Avoid controversial or potentially inflammatory subject matter.
Preserve confidentiality and privacy. Avoid disclosing a client’s name or confidential information in any posts. Same goes for any proprietary information belonging to the firm.
Be selective of safe sites to visit.
Avoid online arguments and/or hostile communications that can lead to personal attacks or defamation.