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SMEs powerless against defamatory reviews

Adam Zuchetti
Adam Zuchetti
01 August 2018 1 minute readShare
powerless, small, weak, business, size

“Thousands” of small businesses are seeking legal advice each year over potentially defamatory online reviews, but are largely powerless in their ability to do anything about it, a specialist lawyer has claimed.

Speaking with My Business recently about the definition of what constitutes defamation, Peter Coggins of Shine Lawyers said the biggest headache business leaders face around defamation boils down to online reviews, with thousands of businesses reaching out to his firm each year to resolve uncertainties.

Under current Australian law, the ability to take defamation action is only open to individuals and small businesses with fewer than 10 employees. Given that incorporates the majority of trading businesses in Australia, the problem is by no means a small one.

“Shine receives literally thousands of enquiries from small businesses each year in relation to what are perceived to be defamatory reviews on sites like Google reviews, Facebook and Product Review,” Mr Coggins said.

“Unfortunately, these mediums have created a breeding ground for people to make all sorts of comments about businesses and products as they see fit.”

Sadly, many small businesses who have been legitimately wronged find themselves unable to take proper action because of the high financial costs involved, Mr Coggins said.

“In many cases, we advise the businesses that while the publications are clearly defamatory and go well outside of honest opinion, taking action directly against the defamer is usually going to be an uneconomical exercise,” he said.

Mr Coggins explained that a more cost-effective approach is to pressure the relevant publication to take down the offending post.

“Importantly, as the law currently stands in Australia, an online platform which publishes a defamatory review can also be liable for the defamatory publication if they have been placed on notice and fail to take action,” he said.

“We advise clients to place significant pressure on the platforms which carry the publications (e.g. Facebook, Google) to have the reviews taken down.”

Legitimate defence to defamation claim

When it comes to reviews, it can be very difficult to determine whether someone is relaying their personal experience and making malicious statement against a person or business, and the line between freedom of speech versus defamation can be very fine indeed.

In the absence of evidence or proof to support a claim, Mr Coggins said that the law allows what is known as “honest opinion” to be used as a legitimate defence.

“‘Honest opinion’ is an established defence to a defamation claim. So long as the person making the publication is expressing opinion rather than fact about matters of public interest, then the publication is likely to be protected from a claim,” he explained.

“Public interest is very wide and generally includes anything that invites public comment, such as running a business.”

SMEs powerless against defamatory reviews
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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