The "standard disclaimer"
This is a work of fiction. Names, characters, places, and incidents either are products of the author's imagination or are used fictitiously. Any resemblance to actual events or locales or persons, living or dead, is entirely coincidental.
has very little legal effect. If a plaintiff can demonstrate that the characters of a novel are intended to depict real people, or that some readers are likely to take the characters as representing real people, and that negative aspects of a character in a novel have been taken as reflecting on the plaintiff, and have harmed his or her reputation, then success in a libel action is quite possible, and the disclaimer will be of no help. After all, it is a self-serving statement by the author. "I am not a thief" is not a defense to an accusation of theft.
And if the plaintiff cannot demonstrate all that, the absence of the disclaimer will not help the plaintiff's case.
The use of composite characters will make it harder for a plaintiff to demonstrate that the statements are "of and concerning" him or her. This is particularly true if the characters draw on more than two real people. Altered settings may help, but if the character is clearly identifiable as a specific real person, the changed setting will not prevent a defamation suit.
At most, the disclaimer establishes a lack of intent to describe real people. But intent is not a key element of a libel action. If a statement is false and harms a person's reputation, it is potentially defamatory, even if made in the belief that it was accurate, or with no desire to harm.
The disclaimer does not hurt, and it helps establish good intent, but that is the most it can do.
To avoid risks of defamation suits, one might be careful that all statements about a character based on a real person are provably true. Or one might carefully make all characters based on a mix of multiple real people, plus fictional additions so that no character is clearly identifiable with any real person.
Defamation actions are generally expensive. They are also risky, in that the original statements may be repeated many times in the course of reporting on the case, more clearly associated with a real person than the original novel ever was. (Consider the QB7 case in which Leon Uris was sued.) The chance of even a clearly defamed person bringing suit is not large, but it is not zero either. The risk will also depend on the jurisdiction likely to be involved. The US is notoriously less friendly to defamation plaintiffs than most European countries, for example.
An author in such a case might be wise to consult a lawyer experienced in defamation cases in the relevant jurisdiction. If the book is to be published by a major traditional publisher, the publisher would almost surely have a lawyer on staff or on retainer to assess such issues. Otherwise, the author would have to make any arrangements. Initial consultations are often at low or even no cost, to assess if the lawyer is really needed and wants the case.
