If You Can't Say Something Nice, Get Insurance

After a dispute with a Washington, D.C., contractor, Jane Perez of Fairfax, Va., did what many dissatisfied customers do these days: She posted negative reviews on Yelp and Angie's List.

Among other things, she said the contractor's work damaged her home and that some jewelry went missing at a time when he was the only other person with a key to her townhome.

Months later, Christopher Dietz and his firm Dietz Development filed a $750,000 defamation suit against her. Dietz claims Perez owes the firm money for the work it did and that she made false statements online. The suit estimates the reviews could cost him $500,000 in lost work opportunities, and he seeks another $250,000 in punitive damages.

Whether the lawsuit, filed in October, has any merit has yet to be decided, but it serves as an important reminder if you want to be an online critic: If you can't say anything nice, check your insurance coverage to make sure you're protected in case you're sued. And don't give someone legitimate grounds for legal action.

Consumer reviews are serious business

Although rare, such lawsuits are becoming more common as consumers take to sites like Yelp to voice their praise and gripes about everything from restaurants to dentists.

Businesses take the reviews seriously for good reason. A 2011 Harvard Business School study looked at the effect of Yelp on Seattle-area restaurants. It found that a one-star increase in a Yelp rating led to a 5 percent to 9 percent revenue increase for the eatery.

The Dietz case is pending in Fairfax County Circuit Court. Initially the judge ordered Perez to remove parts of her review and not to post anything more about one of her complaints. But the Virginia Supreme Court reversed that order after Public Citizen and the American Civil Liberties Union of Virginia filed an appeal on Perez's behalf. (See: "How much umbrella insurance should you have?")

Although some defamation lawsuits may have merit, others are filed simply to shut up critics. The latter are called SLAPPs -- -Strategic Lawsuits Against Public Participation, a term coined 20 years ago by University of Denver law professor George Pring and sociologist Penelope Canan. They wrote the 1996 book, "SLAPPS: Getting Sued for Speaking Out." Now that anybody with a computer and an Internet connection can write for the masses, a growing number of SLAPPs are aimed at consumers.

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