OCA deals with growing issue of defamation and online reviews

By Kirsten McMahon, Associate Editor

A recent Court of Appeal decision involving a defamation claim against an organization that posts consumer ratings is important given how many people and businesses rely on online reviews, Toronto commercial litigation and defamation lawyer Brian Radnoff tells

“Online reviews are an increasingly powerful component of running a business — particularly for service-based companies,” says Radnoff, a partner with Dickinson Wright. “Reviews can significantly influence consumer decisions. Before going on a trip, for example, it’s not uncommon to visit a travel website and look at hotel reviews.”

Prior to the advent of crowd-sourced review websites, there were services that accepted online reviews and provided ratings of businesses, he says. These organizations also give businesses an opportunity to respond to complaints.

In the case before the Court of Appeal, the respondent business received a negative review from one of these services, and did not respond to the appellant organization concerning the complaint nor did it resolve it independently. As a result, the respondent business received a “D-” grade and claimed it caused substantial damages.

At trial, the judge found the grade was not defamatory, that the ratings were protected by defences of qualified privilege and fair comment in any event, and there was no evidence of malice.

The case was appealed to Divisional Court, which ruled that the grade was defamatory, and ordered a new trial on the issues of the fair comment defence, malice and damages.

While the Court of Appeal said the grade was defamatory, it found it was protected as fair comment.

“There is no question in this case that the impugned words were published by the [appellant] and were ‘of and about’ [the respondent]. The question was whether the D- grade was defamatory, in the sense that it would tend to lower [the respondent’s] reputation in the eyes of a reasonable person.”

Radnoff, who was not involved in the matter and comments generally, says the test to determine whether a statement is defamatory is very easy to establish.

“It just needs to be a published or communicated statement to a third person that in the eyes of a reasonable person would lower the reputation of the person being spoken about,” he says. “It's a very low threshold and most negative reviews would qualify."

He says the appellant had two primary defences — fair comment and qualified privilege.

“I believe the Court of Appeal correctly found that this was fair comment — it's an opinion based on facts that a reasonable person could have and it wasn't motivated by any malice because they were acting as a third-party intermediary,” Radnoff notes. “The bottom line is that this is exactly the type of situation where a fair comment defence is likely to apply and should apply.”

However, he says it’s unfortunate the Court of Appeal did not have a chance to determine the issue of qualified privilege.

“The trial judge found that qualified privilege applied and there were some decisions, particularly from Western Canada, that indicated that defence would apply to the appellant on the basis that the whole aspect of its business is to communicate information about ratings of companies which the public has an interest in receiving.”

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