Final answer:
In libel law, the term for knowledge of falsity or reckless disregard for the truth is 'actual malice.' Public figures must prove actual malice in defamation cases, a standard set by the Supreme Court in New York Times v. Sullivan.
Step-by-step explanation:
In libel law, the knowledge of falsity or reckless disregard for truth is known as actual malice. This term is crucial in cases involving public figures where they must prove that a defamatory statement was made with actual malice - that is, the statement was made either knowing it was false or with reckless disregard for its truthfulness.
The landmark Supreme Court case New York Times v. Sullivan established the standard that public officials must demonstrate actual malice to succeed in a libel suit regarding their official conduct. Subsequent cases, such as Curtis Publishing Co. v. Butts and Gertz v. Robert Welch, Inc., have further clarified the nuances of libel law as it pertains to public figures and private individuals, respectively.