What To Do if Someone Bad-Mouths Your Business

what to do if competitor makes defamatory comments or reviews

Starting a new business is never easy especially in this day and age, when you may well be competing with hundreds of others offering the same service or selling similar/identical items.

If someone bad-mouths your business, you can lose sales immediately and suffer long-term damage to your reputation. So what can you do, if this happens to your business? We asked, Amanda Hamilton, CEO of NALP, to explain.

Googling something has become second nature to most of us. This is what we do when we are looking to purchase, finding a service or searching for a holiday. How do we normally differentiate between the overwhelming choices we are given? Answer: by looking at reviews.

There are many ‘review companies’ out there and quite often a huge number of reviews made. So, mostly we spend our time ploughing through the reviews until we are happy to proceed or not, as the case may be.

Very often however, you may get the odd dissatisfied customer because let’s face it, you can’t please all the people all the time.

Resolve bad reviews

As a business, the worst thing you can do is to ignore a bad review. It’s vitally important to be on top of it, because if it remains un-answered, it very often confirms the content of the review, and this may have adverse rippling consequences for the business.

There could be several reasons why someone leaves such a review. Maybe it is knee-jerk reaction and they are angry, or maybe it has been thought through because of a series of bad experiences with that particular business. Either way, the business must endeavour to resolve the customer’s angst by responding to the review as soon as possible and offer some kind of acceptable resolution.

The business may not end up with a satisfied or returning customer but to the outside world they have at least been seen to find a solution, and that is worth its weight in gold. It shows a level of customer service, and guess what? Customers do like that.

Bad-Mouthing by a competitor

It is, of course, a different kettle of fish if bad-mouthing you or your business is done by a competitor. Mostly, it is probably best to ignore such comments or inaccuracies since this reflects on the business doing the bad-mouthing more than the one it is about.

There is a level of integrity that should be achieved by any business by getting on and doing what it does best. As soon as a competitor puts down another business rather than concentrate on its own, then clearly there is something wrong about what they are doing.

Having said that, there is a clear line between a general bad-mouthing to be perceived as getting ahead of a competitor or out of jealousy, and defamation, which steps over the line and becomes a legal wrong.

Defamatory comments

There are three elements to whether a comment made, either in writing, or verbally, is defamatory:

  1. It must be a false statement
  2. It must be published to a third party/ies
  3. Serious harm (such as damage to reputation) must be proven by the individual bringing the action, or in the case of a business, serious financial loss

It is much harder, since the Defamation Act 2013 came into force, to bring an action through the courts for damages (compensation) because the threshold has increased from ‘substantial harm’ to ‘serious harm’.

Taking action for defamatory comments

A claimant – the person bringing the action – also has to comply strictly with the Civil Procedure Rules (the rules that have to be followed to bring an action through the Civil Courts).

There are certain ‘pre-action protocols’ (pre-action requirements) that have to be followed such as writing a letter before any action is taken.

This letter must be detailed with;

  • The name of the person taking action,
  • The alleged defamatory comments and the names of the publications and/or broadcasts in which they were made,
  • How they were interpreted by the claimant,
  • The damage caused to the claimant by them, and
  • The remedy sought by the claimant.

The main purpose of this pre-action letter is to encourage a resolution and with any luck, avoid the necessity of court action. There is also huge emphasis nowadays to find alternative routes to resolve disputes without going to court. This, mainly, is to relieve the pressure on the court system and to avoid accumulation of costs on both sides.

There has never been eligibility to get funding assistance (legal aid) for defamation cases and so finding alternative solutions is clearly the better option for the parties, if possible.

Responding to a pre-action letter

The defendant (the person against whom the claim is made) should respond to this pre-action letter within 14 days, stating whether the claim is accepted, with an offer of a remedy, or rejected with the reasons why. With regard to the latter, the defendant should also include what meaning s/he interpreted to the words complained of and the facts they rely upon.

Taking Court action

However, if an agreeable solution is not found, then there may only be one path to follow and that is to litigate through the courts. The individual, or business claimant may have utilised the services of a paralegal up to this point, and that paralegal would have given them initial advice and assistance at a reasonable cost.

Paralegals generally charge far less than solicitors or barristers for their services, but if the situation reaches this stage, then a barrister may need to be employed, and from this, serious financial consequences will ensue.

Taking such an action into the courts means that it is now out of the control of the claimant. There will be no predictable outcome since each case will be determined on the facts presented, and on the merits of the case. There is, therefore, no guarantee that a claimant will get the decision they want.

Even if the case is won, and an award of damages is made, it may be an empty victory bearing in mind the time and financial factors involved. The damages awarded at the end of the day may not be able to cover the, time effort, stress and finances already incurred.

The principle of not allowing someone to get away with bad-mouthing you or your business may be a strong one, but at the end of the day, maybe an apology might have been enough to resolve the issue.

About the author

This article has been written for ByteStart by Amanda Hamilton, Chief Executive of the National Association of Licenced Paralegals (NALP), a non-profit Membership Body and the only Paralegal body that is recognised as an awarding organisation by Ofqual (the regulator of qualifications in England).

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