Managing Negative Online Reviews

In NSW, media companies are now “publishers” on Facebook. They were not until last month, when Justice Rothman handed down his decision against News Corp in the Dylan Voller case (now on appeal).

The media companies deny that they are publishers on Facebook because they don’t create or control posts on their websites, so they should not be liable for defamatory posts.

What can we do about negative online reviews?

In today’s internet age where material is spread from east to west in a matter of seconds, defamation law and the limits of its reach have become a hotly contested issue.

Online reviews have become increasingly popular. The web now gives consumers a platform to share their experiences with the world. All business owners – from small restaurants to renowned surgeons – now face a new challenge when negative online reviews are or may be defamatory.

What is the law?

In NSW, small businesses with less than 10 employees can sue for defamation. However, you must start your case within one year from the date the review was published, unless the Court extends this in special circumstances.

Generally, an online review is considered defamatory where the material, whether written, electronic or verbal:

  1. was published to a third party (other than the “victim”);
  2. identifies the victim, directly or indirectly; and
  3. contains a defamatory meaning, for example, the review causes reputational damage to the business or person, to the ‘ordinary, reasonable’ person.

The publisher can defend the claim, including for: justification, contextual truth, absolute privilege, publication of public documents, fair report of proceedings of public concern, qualified privilege, honest opinion, innocent dissemination and triviality.

The courts can make substantial awards. In 2017, a Sydney surgeon was awarded $480,000 for defamation after a patient defamed him online.

Companies that are not small (with more than 10 people providing services) cannot sue for defamation but can still sue for misleading or deceptive conduct but only if it is in trade or commerce, or for injurious falsehood, in which case you have to prove false statements made maliciously that cause damage.

Are there any additional requirements under Australian Consumer Law?

Businesses can also be liable if they do not remove an online false or misleading review on review sites they host or promote under the Competition and Consumer Act 2010. Impartial reviews by the business itself, or by a competitor, or by someone getting an undisclosed benefit may be misleading. The ACCC or a person that suffers damage because of the misleading review could get orders to take the review down, for compensation and costs. The ACCC brought proceedings against Citymove in 2011 when it posted false consumer testimonials.

What can businesses do to remove defamatory online reviews?

First you ring your lawyer! Generally, most lawyers will send a “concerns notice” that sets out the details of the defamatory imputation and what it requires (including any compensation), and the publisher has 28 days to respond to the letter of demand (or to seek further details of why it is defamatory) and to make an “offer to make amends”, also under the Act. The process is meant to resolve any defamation matters quickly and without too much cost, because if the publisher carries out its offer to make amends, and pays the compensation claimed, the victim can’t sue for defamation, or if it does, the publisher has a statutory defence.

Get in touch

Whether you are a small business or worried about a defamatory online review, contact Peter McNamara at Clark McNamara Lawyers who would be delighted to assist you in this matter.


Source: Written by Peter McNamara, Partner at Clark McNamara Lawyers, Sydney, August 2019.

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