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Can a Business Sue You for a Bad Review?

Legal AssistantBusiness Law, Consumer Law, Personal Injury Law

Have you ever encountered such horrible customer service from a business that it left you feeling utterly infuriated? So, much so that even after asking “to speak to the manager,” you could still feel yourself getting hot under the collar?

Don’t worry. You’re in good company. We’ve all been there at one point in our lives.

Before you know it, you’re telling anyone who will listen why they need to avoid that particular establishment like the plague. Yet, it’s still not enough. You need a larger audience.

So, you take to social media and post a bad review, and moments later, it already has 20 views, which turn into 50, then 100. Twenty-four hours later, your post has had 1,000+ views. You feel vindicated. “That should teach them not to mess with me,” you mutter under your breath as a victorious smile washes across your face.

The one thing you may not realize is that your victory could be short-lived. And, it may come at a cost that could leave you shedding premium tears. What happens when a simple bad review turns into a defamation lawsuit?

Can a business sue for a bad review? Here’s what you need to know.

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Defamation Lawsuit for a Bad Review

What most Americans don’t realize is that bad reviews can potentially cost them a lot more than they bargained for.

With so many online review forums on the internet, and the sheer power social media has to potentially ruin a legit business, it comes as no surprise that a business owner may take exception to a bad review left by a consumer. They may even end up seeking legal redress by suing for defamation if they feel that the comments lack merit.

People often confuse the terms defamation, slander, and libel even though the three terms mean entirely different things.

Defamation vs Slander

Defamation is defined as a false statement presented as a fact that ends up causing damage or injury to an individual’s or company’s reputation. For instance, a statement along the lines of: “XYZ Ltd. steals from its customers.”

If this statement is not true, and XYZ ends up losing customers as a result, then it is considered defamation. XYZ has the right to bring a defamation lawsuit against the individual who made that statement.

If, however, you went to the XYZ company premises, demanded to see the owner and proceed to say to them, “You’re stealing from your customers!” that isn’t considered defamation, since the statement was uttered in private, and doesn’t damage the company’s reputation in anyone else’s eyes.

Slander and libel are essentially types of defamation. The difference arises in the method used to defame the entity in question. If you make a false, defamatory statement in writing, then it is considered libel. If you make a false, defamatory statement relayed orally via speech, then it is considered slander.

Elements of Defamation

Keep in mind that before anyone can bring a defamation lawsuit against you, they need to prove four key elements.

  1. The presentation of false statements purporting to be factual
  2. The communication or publication of said false statements to a third party
  3. Fault amounting to negligence
  4. Loss, harm, or injury incurred by the defamed party as a result of the defamatory statement
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Keep in mind that different states have different anti-defamation statutes, which may (or may not) require a higher threshold for proving defamation. As a result, the courts in those states may interpret defamation laws slightly differently.

Defamation of Character

Defamation of character, which is legally referred to as tort of defamation, is generally classified into two specific types of false statements.

  1. Defamatory per se statements – These are utterances that are so obviously harmful, no proof of injury is required
  2. Defamatory per quod statements – The plaintiff has to prove injury or damage incurred, which may include the loss of something with economic value

The Consumer Review Fairness Act (CRFA)

“… Company Sues Customer for Bad Review …” Up until 2016, these kinds of headlines had become an everyday occurrence.

It had become such a huge issue that Congress had to intervene by passing the Consumer Review Fairness Act of 2016 to protect consumers from unwarranted intimidation and punishment by companies for posting honest reviews.

It paved the way for the government to crack down on companies that use the threat of a lawsuit to intimidate honest reviewers into taking down negative posts about their businesses.

Some companies would even go to the extent of using non-disparagement clauses in contracts to sue consumers who left bad reviews online or outrightly intimidating them into giving positive reviews.

If you leave an honest bad review online, the CRFA protects you from being sued by a business that claims (whether true or not) to have a non-disparagement provision. If a company ends up suing you on these grounds, report the matter on the FTC website.

Anti-SLAPP Statutes

If you live in any one of the 29 states that currently have an anti-SLAPP (Strategic Lawsuit Against Public Participation) laws, and are being sued for a bad review, you can petition the court to dismiss the suit on the basis that it lacks merit. Plaintiffs who lose an anti-SLAPP motion may even have to pay penalties as a result.

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On the other hand, states that don’t have these laws leave consumers exposed to the wrath of disgruntled business owners. The average defamation settlement costs vary depending on the loss and damages suffered. These may include:

  • Actual/compensatory damages for the actual lost earnings resulting from the defamation
  • Non-economic damages for the company’s injured reputation
  • Punitive damages assessed against the defendant
  • Mitigating damages to minimize the loss suffered

In 2018, CBS News reported a story about a New York woman who was fighting a $1 million suit by a local doctor for posting a negative review online. Another doctor in Tennessee sued a patient for $25,000 for leaving a bad review on Yelp. So, as you can see, defamation lawsuit settlements are all over the spectrum.

Choose Your Words Carefully

Can a business sue you for a bad review? Yes, you can. Especially if you can’t back it up with facts. The best thing to do when writing an online review is to put forward a factual assertion and be as detailed as you possibly can. Ensure that you also provide proof to back up your claims.

That’s the best way to protect yourself against a defamation lawsuit. So, choose your words carefully.

If you have any legal questions about defamation lawsuits, chat online with a attorney today.