
Online reviews are a commonplace practice, and more often than not, they are positive. Occasionally, your business may be given a negative review, which could impact your business negatively.
While negative reviews can be resolved through communication, occasionally, some reviews are made solely with the intent to defame a business and deter potential clients and customers from using the services of that business.
In 2020, Dr Matthew Kabbabe, a dentist, had an anonymous review slandering his business. The case was taken to court, where it was found that Dr Kabbabe had grounds to pursue a defamation case.
A lawyer in Adelaide, Gordon Cheng, won a $750,000 lawsuit after a defamatory review from a non-client damaged his business.
The two examples of Dr Matthew Kabbabe and the lawyer, Gordon Cheng, are examples of cases of defamation, the impact that defamation has on a business, and the types of outcomes of defamation charges.
Defamation charges in Australia may be contested. In this resource, we will address what you can do as a business owner when prompted with a negative review defaming your business and the legal action, or litigation route you may follow.
Can I take Action Against Defamation in Australia?
In accordance with the Defamation Act 2005 No 77, you can take action following an instance of defamation after you have sent out a “concerns notice”.
A concerns notice is the first step to resolving the matter, and you must, before pursuing any legal action, establish the defamatory content, and the harm that it has caused. The concerns notice also provides an opportunity for the offending party to make amends, such as apologising, retracting the statement and/or compensating you for the losses gathered.
The Defamation Amendment bill 2020, has also modernised its approach to be in line with digital publishing and to limit the size of these damages.
Before pursuing a defamation claim, you must determine who posted the review and whether or not tha person is a client or customer of the business. Once you’ve established this, you must do the following:
- First, comment on the review and address the concerns. The comment should be neutral, and not provoke an argument.
- Report the review if the review is false or offensive
- You may also contact the customer directly in an attempt to resolve the situation amicably. If necessary, you may provide the customer with a refund.
If the customer refuse to comply with your attempt to resolve the dispute, you may take legal action against these claims, but you might want to consider finding the right commercial lawyer to help you.
Changes to Defamation Laws for Online businesses
When pursuing legal action, there are a few conditions you must take before you can pursue this.
In contrast to other areas in the law, the burden of proof in defamation cases falls on the defendant to prove that they did not defame the plaintiff. This is good news for businesses and bad news for those who leave reviews that are considered to be defamatory.
Further, you must have fewer than 10 employees to pursue legal action against someone publishing negative reviews online.
You also can sue for injurious falsehood, especially if done maliciously. However, the plaintiff must prove that the defendant did this with malicious intent. They must also prove that the defamatory remarks have caused actual damages, including but not limited to fewer sales and customers demanding refunds.
Defamation Claims: What to Do
First, the online review must be classified as defamatory, showing that the content is false and negatively affects your business.
Factors to look at before the law establishes that the review is defamatory include:
- The comment or review was published somewhere for public consumption;
- The comment or review identifies you as a business or employee directly; or
- The comment or review has caused considerable harm to the company or reputation of such.
This is all based on the Australian defamation laws of 2015, which cover details such as the litigation associated with defamation of a business and online publication.
If the review identifies and defames someone in the business, you can bring that as a defamation claim.
But if the review defames the business in general, you can only bring a claim if there are less than 10 employees, according to the same defamation laws.
If the reviewer was expressing opinions, then they may use the defence of an honest opinion.
For them to prove this, though, they must show that:
- They were expressing their opinions of the business. For example, maybe they thought the constant questions were bothersome.
- It’s related to a business that’s within the public’s interest. So, for example, maybe you were trying to attain a higher position, and they were giving an opinion that would forewarn others.
- The opinion is based on factual material, and they can [prove this
However, all these defences may be challenged if it can be proven they aren’t honest when the review was published.
Your first step is to figure out whether defamation can be pursued, and from there, identify the reviewer and then take action to claim damages for defamation.
False Injurious Claims
There are also injurious falsehood claims. This was utilised in the Palmer Bruyn & Parker Pty Ltd v Parson case of 2001.
In this type of tort, the claim of injurious falsehoods implies a false statement was made, published, and done with malicious intent.
For example, if someone orders a product online and they claim it cuts your hand, and they have no pictures to prove it and was done solely with malicious intent to make you look bad, that’s an example of injurious falsehood claims.
To establish injurious falsehood reviews, though, you must have the following:
- The statement is false about the business or employee
- The statement was published on a third-party platform
- There was malice involved
- There were direct damages
You must be able to prove that the statements are all falsehoods too.
Australian Consumer Law claim
Another aspect is the Australian consumer law claim. If you find out there is a negative review made by a competitor about your business, or maybe they paid someone to write that on behalf of the competitor, you can sue the competitor.
The Australian consumer Law claim allows you to make claims if you know your competitor is paying someone else to write the bad review. You may complain directly to the ACCC, and then sue for damages.
This law is to protect businesses from competitors who utilise their reviews to deceive others.
If a claim is brought using the ACL, and the court finds that the competitor breached it, they may sue for damages and be penalised for engaging in deceptive conduct and misleading customers.
Takeaway
Reviews are an essential tool for businesses, especially when bringing new customers in.
But a false negative review or defaming can wreak havoc on a business.
If you find yourself at the mercy of a defaming online review or content, get in touch with one of our legal advisors, and we will be able to help you and advise you on the best course of action. Our business lawyers will be able to answer all your questions and help you pursue defamation, or a false injurious claim, so you can get the compensation you deserve.
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Mark Lazarus
Mark Lazarus, the visionary behind the business and the fresh blood of the Lazarus Legal team, Mark (or Laz as he is often known) owes much of his success to his past experiences. And he’s made it his personal goal to bring that wisdom and formula to the firm.