Not all defamatory statements are actionable. A critical element of defamation is publication. Without publication, the aggrieved party does not have a suit.
So what is publication? For defamation purposes, this does not mean the same thing as publication to writers. It means communications to a third party - that is someone other than the person making the statement and the person the statement is about.
In other words, the publication requirement does not mean you have to make the statement in a published book, magazine article, internet website or television broadcast. If just one other person is part of the conversation, the publication requirement is met and the defamatory statement is actionable.
Example 1: Betty walks up to Joe and tells him "I know you gave your mother poison and murdered her. Then you stole the money out of her house. And you kicked her dog, too."
Can Joe sue Betty for defamation? The answer is no, even if not a single word is true. There has not been legal publication. As long as the conversation remains between just the person making the statement and the subject of the statement, there is no legal defamation.
At first that may seem a bit odd, but tort law is intended to compensate for damages caused by wrongful conduct, not to regulate manners or even boorish behavior. If the alleged defamation is confined to a one-on-one statement made directly to the target, it may result in hurt feelings, but it cannot lower the target's reputation in the community -- because no one else heard it or knows about it.
Example 2: Same as above, except the statement is made within ear-shot of several other persons (or just one other person). In this case, if Joe can prove others heard the statement, it is actionable. Joe can sue because there has been legal publication to third parties.
Example 3: Instead of making the statement directly to Joe, Betty makes the statement to her best friend Carol. Even though the statement was made to only one other person, it is actionable. Betty "published" the defamatory statement by making it to someone other than Joe. Joe can sue.
Example 4: Same as 1, except Betty made the statement to Joe in writing in an email. Same rule applies. Just putting something in writing does not mean it is "published." Even though the statement was in writing, if it was made only to Joe, there was no legal publication. Joe cannot sue.
Example 5: Same as 4, except Joe forwards the email to his family and friends to demonstrate the horrible things Betty has said about him. Result: Joe does not have a defamation case against Betty. The only publication was the result of Joe's own actions. There was no publication by Betty, and Joe cannot create a lawsuit by publishing it to others himself.
photo credit: <a href="http://www.flickr.com/photos/90664717@N00/28225950/">Akuppa</a> via <a href="http://photopin.com">photopin</a> <a href="http://creativecommons.org/licenses/by-nc-sa/2.0/">cc</a>