The penalty for defamation (also vilification, slander, ethnic slurs), false light (defined as technically correct but still misleading) and libel should mainly be financial. The penalty system described below refers to the punishment and compensation for the defamation itself. Other damages which may be proven to have resulted from such defamation (such as lost income due to customers being deterred, loss of job, etc.) would be in addition to those described below and would be treated as a form of theft guided by the principles stated here.
Such a penalty for defamation should be determined in two parts.
First, a base penalty should be determined by the courts, be dependent on the actual facts of the case and based on the nature of the defamation. The more serious its nature, the higher the penalty. For example, accusing someone of murder may possibly result in a $1,000,000 fine, while accusing someone of stealing a sandwich may result in a minimum defamation fine of $1,000. (A minimum defamation fine is set due to the minimal deterrence an incrementally decreasing fine amount would have. In addition, lower value judgements would tend to ‘waste’ courts’ time.)
Second, an additional penalty should be determined based on the number of people exposed (either actually or potentially saw or heard the defamation). These people should be divided into a few categories: 1) those well-known to the victim (family, relatives and close friends), 2) those known to the victim (friends and acquaintances) and 3) those who ‘know’ the victim (for example people who just recognize their name, as a politician, an actor, radio personality, etc.). An estimate of how many individual fall into each of these categories would need to be agreed upon in court.
Then a certain monetary figure should be applied to each of these categories. For example, a judge could rule that the additional fine amount for each person in category #1 would be $10, and for category #2 it would be $2 and for category number #3 would be 5 cents.
Example: Let’s say a US Senator was falsely accused of accepting $100,000 in bribes. We’ll assume the courts have determined that the severity of this false accusation is worthy of a $100,000 fine. Now let’s say that the Senator has 200 close family and friends, 500 acquaintances, and 5,000,000 people who recognize his name because he is a popular politician. According to the formula above, the criminal (originator of the defamation) would need to pay $100,000 (the original base defamation fine) plus $2,000 (200 x $5 for the #1 family and friends fine) plus $1,000 (500 x $1) plus $250,000 (5,000,000 x 5 cents. This equals out to be a total fine of $253,000 against the criminal and awarded to the victim.
Distinction Between Intended and Incidental Audiences
There should be a distinction between the intended audience (such as the intended recipient of a text message) and the incidental audience (such as the newspaper that got a hold of that text message and broadcast it to the whole nation). The particular charge for each viewing within each category in order to determine the final fine amounts, would need to be determined by the particular facts of each case in court. However a rule of thumb could be that the incidental viewings should cost at least 100 times less than the intended viewings.