The Virginia Defamation Law Blog
Earlier I wrote about the case of Mansfield v. Bernabei, in which Fairfax Circuit Court Judge R. Terrence Ney sustained demurrers to a defamation claim based on statements made in a draft complaint forwarded to a small group of prospective defendants for settlement purposes. Judge Ney ruled that the statements were privileged from defamation liability because they were preliminary to a proposed judicial proceeding and sent in good faith. The Virginia Supreme Court has now affirmed that decision and set forth a new test for determining the applicability of the judicial privilege in Virginia.
Under the new test, communications made outside of court but preliminary to proposed judicial proceedings will be absolutely privileged from defamation liability where (1) the statement is made preliminary to a proposed judicial proceeding; (2) the statement is “material, relevant or pertinent” to the proceeding; (3) the proceeding is contemplated in good faith and is under serious consideration; and (4) the communication is disclosed only to persons having an interest in the proposed proceeding.
(Note: The court enumerated only three elements, combining (2) and (3) above. Because the test contains four distinct concepts, I find it easier to think of this as a four-part test. But that’s just me.)
The plaintiffs argued that to protect communications that are not part of an ongoing judicial proceeding would encourage abuse of the legal system by aggressive lawyers, who would be free to defame others in non-judicial 
settings without meaningful restraint. The court downplayed this concern, finding that adherence to the elements of the test would offer adequate protection against unbridled defamation. The court also emphasized the importance of encouraging compromise and settlement by facilitating free and open communication by parties and their counsel.
Applying the test to the facts of this case, the court found that the communication at issue was privileged and that the demurrers were properly sustained. The draft complaint and demand letter were marked “For Settlement Purposes Only,” and the letter warned that “formal legal action” would follow if a response were not received. Formal legal action did, in fact, follow, and the actual complaint filed was substantially similar to the draft complaint. The communications were sent only to the potential defendants who were clearly interested persons. The court therefore affirmed the judgment of the circuit court.