Dealing with Defamation of Your Business: Can You Sue?

What is Defamation?

In legal terms, a false statement of fact made to harm the reputation of someone else, and made either negligently or maliciously, constitutes defamation.

It can be in 2 different forms:

There are 2 primary statutes which regulate defamation in Singapore – namely section 499 of the Penal Code and the Defamation Act.

Depending on the severity and nature of the offence, parties alleged to have committed defamation can be charged in court under either the Penal Code or the Defamation Act.

Under the Penal Code, defamation is regarded as a criminal offence and you could be sentenced to prison if found guilty.

Under the Defamation Act, defamation is regarded as a civil offence instead, and possible remedies include compensation to the victim and injunctions (banning the offender from posting again).

Legal Defences To Defamation

Under common law in Singapore, there are 2 primary defences to defamation, for those defined as without privilege. They are namely a defence of justification, and a defence of fair comment.

In summary, for a defence of justification, the defendant (person who is accused of making the defamatory remark) has to bear the burden of proof to show that the statement that he/she made was true.

For defence of fair comment, the defendant must prove that the statement was a matter of genuine opinion.

How Defamation Relates to Business Owners

Business owners, especially those running online businesses, are also affected by defamation. Unlike in cases where defamation is made against a person, defamation is directed at the business instead.

For example, should you be a service provider and run most of your business online, defamation can take place through online reviews about your business and the services it provides. This can happen when dissatisfied customers write up negative online reviews about your business on crowd-sourced review platforms such as TripAdvisor or Yelp. As a business owner, such remarks are defamatory if they are deemed to be untrue and made with the intent of harming your business’ reputation.

Businesses such as those in Sim Lim Square have already developed notorious reputations, as a result of numerous bad reviews online. However, cases where businesses retaliate and cite the reviews as defamatory in Singapore are still far and wide, and do not happen regularly in Singapore.

Another example would be marketing tactics from competitors to deliberately undermine your business through negative advertising campaigns. Competitors can choose to do this by deliberately targeting your business and asserting their superiority over your products or services.

The 2015 case of Singtel and Gushcloud serves to illustrate this. Even though the case did not proceed to litigation and defamation claims, it highlights another potential area for defamation against your business.

In more extreme cases, your business can also be sued for defamation if statements made during advertising campaigns are made negligently and deemed to be defamatory. Hence, it is important to understand defamation in the context of your business, and how such cases can be avoided or managed.

Responding to Defamation of Your Business

Effective management of the situation is crucial for your business. Here are some approaches in which you can respond to defamatory remarks about your business and uphold your business’ integrity:

1. Do not be hasty in wanting to remove hate remarks

The first step to bear in mind would be that the removal (even immediate) of such defamatory remarks may not be the best solution to the problem. Always bear in mind that on third-party, crowd-sourced review platforms, reviewers are free to publicise their opinions or experiences, as long as they comply with the websites’ rules.

Having the comment taken down or demanding the third-party provider to do so could make matters worse. Your business will appear overly-defensive and aggressive, and give an impression of being incapable of dealing with criticism.

In a recent court ruling in the USA, a law firm successfully won a lawsuit for crowd-sourced review platform, Yelp, to take down a negative review written by one of the firm’s former clients. However, the case spanned across 2 years of litigation, committing a great deal of time and effort, and resources from the firm.

It is not as straightforward as merely having a bad review taken down. Unless the remarks are of a threatening or abusive nature, you should take this into consideration before deciding to insist that the reviews be taken down. This helps you to avoid unnecessary or longstanding legal action.

2. Respond graciously

One approach which business owners can take is in the form of a targeted and gracious response to the maker of the defamatory remarks online. This approach allows you to acknowledge your business’ shortcomings (if there were any) and seek to restore customer confidence. This must also be balanced with maintaining the dignity and integrity of your business.

For example, you can offer to listen to why your customer was not satisfied and suggest a suitable remedial or prospective compensation. A 2015 example would be how the CEO of Farm Fresh milk responded to a complaint and bad review of his milk products, and how his response managed to win his customer back.

Recent cases of restaurants in Singapore responding badly to online reviews has drawn criticism from Netizens and even worsened the restaurants’ reputations. Hence, it pays to adopt a more gracious approach rather than an overly-aggressive one.

As a business owner, you can even see the lighter side of things and adopt a more light-hearted, humorous yet respectful approach in response to defamatory remarks about your business. At the same time, do not be afraid to present your side of the story. See how these business owners responded to bad reviews about them on Yelp.

3. Seek legal advice

If these defamatory remarks have been truly damaging to your business’ reputation, such as a prolonged drop in sales and earnings or loss of customers, you can then turn to litigation to address the issue. It is usually recommended as a last resort due to the amount of resources that could be drained from your business. Depending on the severity of the remarks, it may be a criminal or civil proceeding.

For you to prove that the remarks made were indeed defamatory to your business, you will have to ensure that the statement(s) made fulfils 3 criteria:

1. The statement(s) must be defamatory in nature, i.e. intended to harm your business’ reputation or expose your business to contempt or ridicule.
2. The statement(s) must refer to your business, either by stating its name or referencing it through other means, e.g. a picture.
3. The statement(s) about your business must be published and communicated to a third party.

Once you can successfully prove that the statement(s) were indeed defamatory, you can proceed to seek compensation in the form of damages or injunctions in court. For more serious cases, the defendant (maker of the defamatory remarks) could face imprisonment if found guilty.

Do bear in mind that you are unable to seek legal action against the network service providers, e.g. TripAdvisor or Facebook, provided that they have not altered the defamatory statements in question.

This is because they are protected under section 26 of the Electronic Transactions Act which states that they are not subjected to any civil or criminal liability that arises when such content is posted, they are merely providing access to such statements.

SingaporeLegalAdvice provides a platform for you to contact defamation lawyers and seek a suitable recourse for your business in the event of alleged defamation.

Dealing with Defamation

As a business owner, especially if you run an online business, your business will always be subjected to criticism and reviews from customers. It is important to manage such remarks carefully and not jump into a defamation suit. However, in some cases litigation might be the last resort to ensure that your business’ integrity is not compromised.

Careful management of how your business responds to defamation will ensure that its reputation will not be compromised in the long term.