Key takeaways
Court rejects claim over online reviews
Insufficient evidence of financial harm caused.
Defamation needs clear loss linkage
General reputational damage isn’t enough.
Legal action may amplify criticism
Proceedings can draw more public attention.
In June 2024, the High Court granted summary judgment in favour of Trustpilot A/S (Trustpilot) in a claim for defamation brought by BW Legal Services Ltd (BW), a law firm specialising in debt recovery work - BW Legal Services Ltd -v- Trustpilot A/S [2024] EWHC 1449 (KB). BW took issue with 20 online reviews on Trustpilot’s website which, according to BW, brought down BW’s overall rating and may have caused the loss of a potential £3.7million in profit relating to a contract with telecoms company, Three. BW sought an order for damages up to £50,000, an injunction and an order requiring Trustpilot to publish a summary of the court’s judgment.
Section 1 of the Defamation Act 2013
Section 1 of the Defamation Act 2013 states: “1(1) A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant” and “(2) …harm to the reputation of a body that trades for profit is not “serious harm” unless it has caused or is likely to cause the body serious financial loss”.
In other words, BW needed to prove that the reviews complained of caused, or were likely to cause, serious harm and serious financial loss. BW’s case was that the 20 reviews had caused or were likely to cause serious harm to its reputation based on the seriousness of the defamatory meanings conveyed by the reviews, the extent of their publication (Trustpilot being high on a Google search and a number of users having flagged the reviews as “useful”) and the status of Trustpilot’s website as a provider of trustworthy information. Further, the reviews were said to have led to the loss of a chance to tender for a contract with Three, which may have resulted in £3.7million profit. Three had referenced the Trustpilot reviews as a “key consideration” for the rejection of BW after tender.
Application for summary judgment
Pursuant to Civil Procedure Rule (CPR) 24.2, the court may grant summary judgment if it considers that a claimant has no real prospect of succeeding on the claim or there is no other compelling reason why the case or issue should be disposed of at trial.
Trustpilot applied for summary judgment on the basis that BW had no real prospect of establishing that the publication of the 20 reviews had caused, or was likely to cause, serious harm to BW. Alternatively, Trustpilot sought to strike out the claim pursuant to CPR 3.4(2)(b) for abuse of process arising from delay.
The court granted summary judgment concluding that BW had no real prospect of establishing that the publication of the reviews had caused, or was likely to cause, serious harm (including serious financial loss) to BW’s reputation. BW’s “main problem” was causation in relation to serious financial loss. Only three of the 20 reviews had been published at the time BW alleged it lost the opportunity to bid for the Three contract and there was no evidence that Three saw those three reviews. Fundamentally, BW was unable to produce sufficient evidence in support of its allegation that those reviews had caused it to lose a chance to bid for the Three contract and the court considered it unlikely that such evidence would be available at trial. Three gave more than one reason for not proceeding to consider BW’s bid initially and, when the bid was rejected finally, the sole reason given was that they wanted to stay with their existing provider.
Further, the negative reviews in question reflected only a small proportion of the overall negative reviews for BW on Trustpilot’s website making it “improbable that the claimant will be able to show that any loss (or likely loss) it has suffered was caused by a specific publication”. The court considered that there was “an absence of reality with the claim as put by the claimant” because “[t]here is nothing that is likely to link the specific reviews complained of with financial loss, in the context of everything else on the defendant’s site”.
The court was satisfied that BW did not have a real prospect of success in proving on the balance of probabilities that each or any of the reviews caused, or was likely to cause, serious financial loss and there was no other compelling reason for the claim to proceed to trial. In the light of that finding, there was no need to consider Trustpilot’s case on abuse of process.
Comment
It is vitally important for any potential claimant to consider carefully what losses have actually arisen and which may be able to be established were caused by a publication, including the supporting evidence available. A mere indication that a publication may be a factor leading to a loss is unlikely to be sufficient. Further, online reviews should be considered in the round.
It is always important to remember that when issuing legal proceedings for defamation that the proceedings themselves may bring more attention to the publications complained of, as was certainly the case here. The high volume of negative reviews on online platforms were a key consideration in the judgment, ultimately working against BW (albeit the court acknowledged that most were posted by third parties who were not clients or customers of BW). A key point of reflection for BW will be whether the publicity (and costs) associated with this litigation have assisted its overall cause.
For further information on defamation or assistance with issues arising from online reviews, please contact Kate Steele.
