The High Court dismissed a law firm’s libel claim over defamatory online reviews as the firm failed to show how the bad reviews caused serious financial loss.
Background:
A Leeds-based firm, BW Legal, which specialised in debt recovery work, filed a claim against Trustpilot for libel. BW Legal claimed damages between £10,000 – £50,000, an injunction and an order under s.12 of the Defamation Act 2013. It also alleged that its potential loss of chance was estimated at £3.7 million in contract due to defamatory online reviews.
The defendant applied for a summary judgement on the basis that the Claimant has no real prospect of establishing that the publication has caused, or is likely to cause, serious financial loss as required by Section 1 of the Defamation Act 2013.
Decision:
The High Court granted summary judgement in favour of Trustpilot as BW Legal has failed to show how the bad reviews caused serious financial loss. The main problem was that BW Legal could not demonstrate causation.
Judge Lewis rejected both of BW Legal had allegations that it had lost a chance to bid for a contract for debt recovery services which caused serious harm and that it was to be inferred that the 20 reviews were likely to cause BW Legal serious harm which included serious financial loss. The Court dismissed the first allegation, due to the lack of supporting evidence. Under Section 1(2) of the Defamation Act 2013, claimants are required to prove on the balance of probabilities that they suffered serious financial loss or were likely to do so.
Regarding the 20 reviews, they only reflect a small proportion of the reviews of BW Legal. As Judge Lewis noted most reviews and comments about the Claimant published on Trustpilot and other sites were ‘overwhelmingly negative’. The Court acknowledged that most of those reviews have probably been published by people against whom the Claimant has sought recovery. He continued and concluded that “Given the volume of negative reviews published on the defendant's website at the relevant time, it seems improbable that the Claimant will be able to show that any loss (or likely loss) it has suffered was caused by a specific publication. It seems to me that this is a good example of the "daunting problem of causation" referred to by Collins Rice J in Sivananthan.” Moreover, only three out of the 20 reviews were published when BW Legal lost the three tenders.
The Court considered that there was “an absence of reality with the claim as put by the Claimant” as “there is nothing likely to link the specific reviews complained of with financial loss, in the context of everything else on the defendant’s site.” Even if BW Legal could show a real and substantial chance that Three would have acted differently, it would still need to prove on the balance of probabilities that one of the three reviews caused it to lose that chance.
Implications:
This decision confirms the threshold that companies have to demonstrate for their case to be heard and be successful. In this case, causation was difficult to establish, as they were unable to show the real extent of the harm caused.
This case and the ruling also highlighted the problems with platforms such as Trustpilot. As Judge Lewis noted some of the reviews were not left by customers or clients from BW Legal but by people against whom the Claimant has sought recovery. At the same time, the decision confirms that customers should be able to leave negative reviews if they want to.