Articles > Small Business

What Can I Legally Do About a Bad Review?

May 23, 2022   Fatima RazaPhilip Evangelou

A lot of small businesses rely on reviews to help boost their business as consumers rely on reviews when looking for businesses. Thus negative reviews can be detrimental for small businesses and are very difficult to handle.

Defamation can be considered for defamatory online reviews however there are several elements to prove and it can be quite difficult.

Other elements need to be taken into account such as the honest opinion defence where the reviews could be true and just their opinion and thus defamation could not apply. 

What is Defamation?

Defamation is the publication of false material regardless of its medium that harms a person’s reputation. It must be proven that the material was published in order to defame them in the eyes of an average person. Compensation such as money or a public apology can be claimed.

Interestingly, in the recent High Court decision in Google LLC v Defteros, it was decided that Google is not a publisher specifically in the context of search results (but this would not apply to situations like business reviews), and so they do not have any legal responsibility for defamatory content through searches or hyperlinks. The only current exception to this is if the defamatory content was sponsored.

Examples of Defamation

Colagrande v Kim [2022]

This case involved Dr Min Sik Kim and his wife Anna Kim who wrote a false review in 2018 on RateMDs imitating a former patient of Dr Colagrande who had previously accused him of sexual assault. The review stated “After what he did to me, I can’t believe he’s still practising” with a link to Dr Colagrande’s 2017 conviction. The sexual assault case referenced was overturned on appeal a year later and the prosecution dropped charges. The respondents were found guilty of defamation and had to pay aggravated damages of $420,000 with special damages of $31,511. 

This case highlights the impacts of reviews on small businesses. As small businesses rely on reviews to boost their position it can also be detrimental to them. 

Ways for Small Businesses to Respond to Defamatory Reviews 

  • Keeping Up with Reviews- Small businesses should constantly stay up to date with their reviews, this way the business can resolve negative reviews thus reversing a customer’s experience. This includes false reviews as businesses can try to resolve it however can take legal measures if necessary. 
  • Reach Out- Identifying who wrote the false review is important as you can then contact them directly to resolve the issue. 
  • Contact Review Platforms- Some review platforms have options for businesses that have been fairly maligned however it is difficult to prove a review is false. 

Initial Legal Avenues 

If the reviewer still remains anonymous, preliminary discoveries can be used such as a court application “premised on the basis you have a prima facie cause of action for defamation or another claim, you just don’t know who the proper respondent is”. 

Issuing a concerns notice to offer them another chance to apologise and retract/delete their statement can also be done.

Pursuing Defamation 

Finally defamation can be pursued for small businesses. However Australian Legislation has limited businesses to sue for defamation as a company can be defamed but only small businesses can sue for defamation. A business can only sue for defamation if they have less than ten employees as they’ll be considered an entity rather than an individual. They must also not be related to another corporation or is not a not for profit organisation.

What elements must be proven for defamation online?

The following must be evident if an individual believes they were defamed online: 

  • The material was communicated to one or more people- the material must be communicated to a third party, if the material has not been consumed by the third party then defamation is not possible. 
  • The material must be defamatory– the test to determine this is whether an average person of average intelligence would make such an accusation. Furthermore the court will also look at other materials as well as the context of the situation.  
  • The person claiming to be defamed must be identifiable- An average person with average intelligence should be able to assert that the material is in reference to the person being defamed. 

Proving the Review Caused Serious Harm

Defamation Laws in Australia have changed to include a serious harm threshold meaning the business must prove that the review caused serious harm to its reputation. As well as proving that the business faced serious financial loss. Serious harm includes:

  • Bookings were cancelled;
  • Loss of profit or business sales;
  • Loss of employment or contracts;
  • Other losses of financial nature 

Honest Opinion Defence 

The honest opinion defence is important and applies where an online review is just their honest opinion. It applies where:

  • It is their honest opinion;
  • Considered to be public opinion; and
  • Based on proper materials

This is important as online reviews can be considered to be honest and thus defamation cannot take place. 

Key Takeaway 

Defamation is a serious issue that can cause serious implications especially to small business owners in the digital age. When these issues arise such as false reviews, small businesses that are significantly concerned about it and have the evidence and funding can consider taking legal action.

If you’re a small business and have concerns about defamation get in touch with our team via the contact form or by calling 1300 337 997.

About Fatima Raza

Fatima RazaFatima is a legal intern at Openlegal and is currently in her third year studying Law and Media and communications at Macquarie University. Her interests are commercial, property and international law.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.