Yet defamation lawsuits are not confined to the rich and famous. Increasingly, employers and employees become entangled in this costly litigation when employment relationships sour. A recent NSW District Court case, Bowden v KSMC Holdings trading as Hubba Bubba Childcare, is a timely reminder.

Unusually, the plaintiff was 20-year-old TAFE student Matt Bowden, who had worked for Hubba Bubba Childcare. After about a year in the job, Bowden resigned, primarily due to clashing TAFE and work timetables. There was some animosity between Bowden and the childcare centre's director, Karen Chapman. After Bowden resigned, Chapman accused him of misrepresenting his childcare qualifications and lying to her about whether he had babysat Hubba Bubba clients (against her "non-babysitting policy"). The relationship deteriorated, and Chapman fired Bowden 11 days after he resigned.

While Bowden may have believed this was the end of his dealings with Hubba Bubba, upon his departure Chapman emailed 35 parents of enrolled children. Although wishing Bowden "well with his future", her email also said "Matt [was] unfortunately no longer with [Hubba Bubba] due to disciplinary reasons" and that while "being good with children in general, Matt was not truthful with us regarding his studies and some other issues". Chapman finally alleged she "felt it was better for him to move on and possibly gain a bit more life experience", blatantly rewriting the reality that Bowden himself had resigned, and making several untrue statements about his character and abilities.

Chapman didn't stop there - she also called a parent and advised them that Boden "couldn't be trusted fully ... he's not a totally honest person".

It wasn't long before Chapman's words began undermining Bowden's local reputation. He became aware of the email after a child whom he knew called him a liar. He noticed avoidant changes in the behaviour of some childcare-centre parents towards him. The email, and its resulting grapevine effect, caused Bowden justifiable stress that his career prospects in childcare were shattered. The effect of these defamatory comments culminated in Bowden receiving psychological treatment for depression. He had to further delay his studies.

In concluding that the email was defamatory, and that the harm Bowden suffered justified $225,000 in damages, the court considered whether an "ordinary reasonable reader" would find that the email implied that Bowden was dishonest, untruthful about his studies, unfit for work in childcare and that his conduct had resulted in his termination - essentially, whether the comments defamed his professional and personal reputation. By holding that the email did slander Bowden's reputation, the court sent a message that defamation is alive and well in non-celebrity Australia.

Clients often ask for lawyers' advice on whether they've been defamed and what to do about it. There are many reasons a lawyer might not recommend pursuing a defamation claim. First, not all unpleasant statements are defamatory. The defamatory material must be "published" or communicated to others, you must be clearly identified in the statement, and the statement needs to harm your reputation. Second, it can be difficult to prove defamation. There are several defences, including that the statement was true or an honest opinion. Third, if the publisher refuses to take down the offending material and you proceed to a hearing, defamation litigation is costly and risky - with the loser likely to foot the winner's bill.

In coming to the final figure, the court apportioned $200,000 in general damages to compensate for the defamation itself and $25,000 to the aggravating fact that the employer knew the statements were false, refused to apologise and maintained its position throughout the hearing. Judge Leonard Levy, SC, highlighted that this email was sent to a group crucial to Bowden's career development in childcare, seriously impeding his prospects. Moreover, Levy paid particular attention to Bowden's psychological treatment, his youth and corresponding vulnerability, and the damage done both directly from the email and the grapevine effect.

What does this mean for you? This case reminds us that the threat of defamation action looms over employers and employees tempted to retaliate against each other in the final throes of employment disputes, and that that threat is not empty. It's in both parties' best interests to ensure that employment termination is carried out as smoothly and amicably as possible. While Australian Public Service office "goodbye and good luck" emails from human resources are likely to be tightly worded, should you become aware of defamatory emails, social-media posts or defamatory statements made to others about your conduct or termination, you may want to seek legal advice. Additionally, this is a reminder not to (at least publicly) take part in the inevitable gossip that follows a colleague's termination.

For career public servants, whose livelihoods depend on a good professional reputation within the APS, defamation could end their career and potentially render them unemployable.

Despite the increasing number of defamation claims, Bowen's case is surprising because most defamation cases don't proceed beyond a few meetings with a solicitor, let alone make it to trial (especially claims run by relatively young clients without deep pockets). While this decision should empower individuals who believe they have a defamation situation to seek out a solicitor and discuss their prospects for success, it must be viewed with caution: pursuing a defamation case is likely to be costly and messy. Results may vary.