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The Better Business Bureau keeps an eye on companies for consumers. But who keeps an eye on the Better Business Bureau?
A small Ottawa shop has just concluded a long, costly lawsuit against the BBB of Ottawa-Hull for defamation after the firm was graded a D minus for not responding to a complaint from a customer in 2007.
It did not sit well with Barry Walsh, the operator of two heating and air-conditioning outfits. Two appeals and some 10 years later, he’s still not vindicated and finds himself poorer by at least $275,000.
The operator of Walsh Energy Inc. and Waltek Energy Services Inc. learned last week the Ontario Court of Appeal, in the end, mostly sided with the BBB, though it did reduce the $348,000 awarded to the bureau after the initial trial.
“I pursued the matter because I spent years developing my business reputation, only to have it severely tarnished by a company like the BBB that decided, for its own reasons, to rate businesses without explaining the true factual basis for the rating,” Walsh says in a written reply to this newspaper.
The higher court heard that Walsh was a member of the BBB from 1994 to 2007. As part of membership, companies agree that failure to respond to a customer complaint will affect the company’s rating, which is posted on the BBB website. It became clear at trial that Walsh was not satisfied with the BBB’s complaint resolution and informed the bureau it would resolve complaints on its own.
In 2009, the bureau changed its rating system from words to grades, like a report card. One of Walsh’s companies went from a “neutral” rating to a B and while another went from “unsatisfactory” to a D minus for “unanswered complaints,” although there was only one, not several.
The BBB’s new system used software that graded according to 17 factors. Walsh is upset that a poor grade for a vaguely worded “unanswered complaint” is not explained to consumers, instead casting doubt on the trustworthiness of a business.
What are the consequences of having a poor grade on a publicly-viewable website for over a year? Walsh said he lost a pile of business, had higher advertising and labour costs, amounting to an estimated $650,000 in losses related to the poor rating.
“Some of my competitors were using our grade against us in competing on contracts. I felt I had no choice but to try to stop the ongoing damage to my business reputation that had taken years to develop.”
At the first trial in 2012, there was quite a lively discussion about what constitutes defamation, or the lowering of one’s reputation via publication, to wit: whether a D minus is “worse” than “unsatisfactory” and how B might be construed as a lower rating than “neutral,” especially when competitors are getting straight As.
The case was dismissed: no defamation was found and the BBB was awarded $348,000 in costs, a massive amount of money for smaller companies like those controlled by Walsh who, at peak times, might have two dozen employees.
The case was appealed to Divisional Court, which ruled that D minus was, in fact, defamatory, and ordered a new trial on the issues of the fair comment defence (which protects the BBB), malice and damages. Then the whole matter went to the Ontario Court of Appeal, with appeals and cross-appeals from both sides.
Now we’re eight years out from the alleged libel. The appeal court agreed the D minus was defamatory but ruled the BBB is protected by the fair comment defence, which essentially allows it to publish negative things about companies as long as the comments are based on facts. (The Walsh firm had, indeed, failed to respond to the complaint and, as a BBB member, had agreed to those rules.)
The case is a window into the legal framework that allows organizations like the BBB — or media outlets — to exist. They have both a duty and legal protection to publish negative, even defamatory information, as long as it is in the public interest, the comment is considered “fair,” based on fact and not motivated by malice.
The appeal court was not impressed with the cost award.
“Counsel for the BBB billed for over three times as many hours in defencing the action as the appellant’s counsel did in bringing it,” the panel noted. “The result is a costs award that is contrary to the fundamental objective of access to justice.”
It reduced the total award to $275,000. “That makes it tough,” writes Walsh, “for a small business like mine to survive.”
To contact Kelly Egan, please call 613-726-5896 or email kegan@postmedia.com
Twitter.com/kellyegancolumn
查看原文...
A small Ottawa shop has just concluded a long, costly lawsuit against the BBB of Ottawa-Hull for defamation after the firm was graded a D minus for not responding to a complaint from a customer in 2007.
It did not sit well with Barry Walsh, the operator of two heating and air-conditioning outfits. Two appeals and some 10 years later, he’s still not vindicated and finds himself poorer by at least $275,000.
The operator of Walsh Energy Inc. and Waltek Energy Services Inc. learned last week the Ontario Court of Appeal, in the end, mostly sided with the BBB, though it did reduce the $348,000 awarded to the bureau after the initial trial.
“I pursued the matter because I spent years developing my business reputation, only to have it severely tarnished by a company like the BBB that decided, for its own reasons, to rate businesses without explaining the true factual basis for the rating,” Walsh says in a written reply to this newspaper.
The higher court heard that Walsh was a member of the BBB from 1994 to 2007. As part of membership, companies agree that failure to respond to a customer complaint will affect the company’s rating, which is posted on the BBB website. It became clear at trial that Walsh was not satisfied with the BBB’s complaint resolution and informed the bureau it would resolve complaints on its own.
In 2009, the bureau changed its rating system from words to grades, like a report card. One of Walsh’s companies went from a “neutral” rating to a B and while another went from “unsatisfactory” to a D minus for “unanswered complaints,” although there was only one, not several.
The BBB’s new system used software that graded according to 17 factors. Walsh is upset that a poor grade for a vaguely worded “unanswered complaint” is not explained to consumers, instead casting doubt on the trustworthiness of a business.
What are the consequences of having a poor grade on a publicly-viewable website for over a year? Walsh said he lost a pile of business, had higher advertising and labour costs, amounting to an estimated $650,000 in losses related to the poor rating.
“Some of my competitors were using our grade against us in competing on contracts. I felt I had no choice but to try to stop the ongoing damage to my business reputation that had taken years to develop.”
At the first trial in 2012, there was quite a lively discussion about what constitutes defamation, or the lowering of one’s reputation via publication, to wit: whether a D minus is “worse” than “unsatisfactory” and how B might be construed as a lower rating than “neutral,” especially when competitors are getting straight As.
The case was dismissed: no defamation was found and the BBB was awarded $348,000 in costs, a massive amount of money for smaller companies like those controlled by Walsh who, at peak times, might have two dozen employees.
The case was appealed to Divisional Court, which ruled that D minus was, in fact, defamatory, and ordered a new trial on the issues of the fair comment defence (which protects the BBB), malice and damages. Then the whole matter went to the Ontario Court of Appeal, with appeals and cross-appeals from both sides.
Now we’re eight years out from the alleged libel. The appeal court agreed the D minus was defamatory but ruled the BBB is protected by the fair comment defence, which essentially allows it to publish negative things about companies as long as the comments are based on facts. (The Walsh firm had, indeed, failed to respond to the complaint and, as a BBB member, had agreed to those rules.)
The case is a window into the legal framework that allows organizations like the BBB — or media outlets — to exist. They have both a duty and legal protection to publish negative, even defamatory information, as long as it is in the public interest, the comment is considered “fair,” based on fact and not motivated by malice.
The appeal court was not impressed with the cost award.
“Counsel for the BBB billed for over three times as many hours in defencing the action as the appellant’s counsel did in bringing it,” the panel noted. “The result is a costs award that is contrary to the fundamental objective of access to justice.”
It reduced the total award to $275,000. “That makes it tough,” writes Walsh, “for a small business like mine to survive.”
To contact Kelly Egan, please call 613-726-5896 or email kegan@postmedia.com
Twitter.com/kellyegancolumn
查看原文...
