Has your business ever had a bad online review? The traditional advice has been to shake it off and move on. That’s precious little comfort to a business whose reputation has been ruined, however. As goes the reputation, so goes the business. For someone who has put heart and soul into building a business, this can be a crushing blow.
Recent trends in Australian law suggest that there may be more that a business can do to protect itself from defamatory online reviews, however. But first, it is important to understand what defamation is and is not.
Defamation or not?
Defamation law is designed to protect individuals and businesses from false or damaging statements communicated to a third party that cause harm to personal or professional reputation. This includes Google, Twitter and any other social media. It includes images and pictures, as well as words.
On the other hand, a statement is not defamation if it is made only to the subject of the communication (I call you a terrible accountant, but no one else is aware of that statement) or if the statement is not made about an identifiable person or organisation (“All doctors are quacks.”) It’s not defamatory if it’s true or if your reputation is already such trash that it does no additional harm. A certain Chancellor of the German Reich between 1933 and 1945 could probably not be defamed, even if he were alive.
It is also not defamatory if the communication is a statement of honest opinion. (I believe that the cake I bought at XYZ Bakery is the worst cake I have ever eaten.)
It is easy to see the potential for litigation.
The ‘honest opinion’ wrinkle
Many online reviews appear to fall within the “honest opinion” exception. Nonetheless, a lawyer in Adelaide was recently awarded damages of $750,000 after an individual posted a negative Google review. The review cost the lawyer a significant portion of his business and caused him great personal distress. Significantly, it appears that the reviewer was never a client of the lawyer.
It was an expression of opinion that might otherwise have been covered by the exception, except that it does not appear to have been honest. It seems to have been the kind of unrestrained malice that the internet elicits from some people.
Remedies and limits
If you believe that you have been the target of a defamatory online review, it is necessary to consider that financial compensation has its limits. In many cases, harm to reputation is not undone by money. A lawsuit, because it involves repeating the harmful statement, can actually make the situation worse. A published retraction or apology may be more effective.
It is also important to be mindful of very short time limits. In NSW, an action for defamation must be brought within one year of the date the harmful statement was shared with the public. If you believe that you or your business has been harmed by defamation, don’t sit and stew about it. Seek legal help as soon as possible.
Rolf Howard is Managing Partner of Owen Hodge Lawyers. He has been in the legal practice since 1986 and a partner of Owen Hodge Lawyers since 1992. Rolf focuses on assisting clients to proactively manage legal responsibilities and opportunities to achieve competitive advantage. Rolf concentrates on business planning and formation, directors’ duties, corporate governance, fund raising and business succession. His major interest is to assist business owners and their financial advisers plan and implement strategies to build and exit from successful businesses.