Tuesday, March 13, 2007

Would You Hire This Contractor?


Our friend John Kelly, at the Washington Post, reports today on a home building contractor (identified as SCS Contracting Group) who has sued at least two of his former clients for defamation because they made disparaging remarks on the web about the contractor's performance.

Now, let's put ourselves in this contractor's shoes for a moment and see if this is a good strategy. Assume that, in fact, we did a good job. There were some problems--after all, there always are--but it wasn't our fault. Let's further assume that the homeowners who complained on the web did so unfairly, even to the point of exaggerating some of the facts. And let's assume at least a couple people told us they saw the posts and it made them reluctant to hire us.

Should we sue the homeowners for defamation?

Not unless we're deranged! After all, who in world would hire a contractor who might SUE if they say something bad about his work? You'd have to be crazy to invite that possibility.

In contrast, there are more positive ways to deal with a situation such as this, without ruining your own business in the process. For example, in one instance, a homeowner posted negative comments on a site called Angie's List, where consumers can evaluate service providers. The contractor could post a response, and could also get other clients to post favorable reviews. Then readers on Angie's List would have a more balanced view and might decide the one homeowner was just disgruntled. (That assumes you have satisfied customers; if not, suing the dissatisfied ones is probably not a good idea.)

Counterbalancing unfavorable web reviews is not uncommon. If you read individual reviews of restaurants on the Post's website, or one of many others that allow individuals to spout off their opinions, you'll see some pretty bad ones for even the best of restaurants. But if you look at them in context, it's pretty obvious they are outliers.

Another possibility is to work out the problems with the complaining customer. While that doesn't always work, good businesses follow-up on web complaints and try to learn from them. Again, restaurants will often offer an offended customer a perk or an apology and try to get them to give it another try.

What if, instead, a restaurant starts suing every bad reviewer for defamation? What's going to happen? That's right: empty restaurant! Bankruptcy. Not because of the bad review; but because of the responsive lawsuit.

We might very well consider hiring a contractor despite a negative review from another client. But we'd NEVER hire a contractor who'd sued a customer for defamation simply for stating their opinion on a website.

In any event, truth is an absolute defense in a libel/defamation case. Just think of the risk of losing.

11 comments:

Anonymous said...

Angie's List has just had one of their readers/members sued because of a bad review. Angie's List is supporting this member in the lawsuit, which (IMHO) has little chance of success, because the company has had many, many bad reviews and a bad reputation. (Unfortunately, a lot of people do not know this, and still use the company.) However, since the best defense against a libel lawsuit is the truth, it seems like the suit is probably not going to succeed. At least, I hope not.

Anonymous said...

I had this contractor perform work at my home and they were the worst. The company is very dishonest and shady. I recommend that you avoid them at all costs.

Handy67 said...

As a constrution professional I can really see the side of the contractor here and why his actions are justified. After spending a couple of hours looking at the legal postings from the website the contractor posted concerning the lawsuits (something I doupt other posters or the blogger has done) I can see where he has a justified complaint. I commend him on his attitude of enough is enough concerning the complaints. He followed the contracts that were written and the homeowners didn't. He even had a homeowner that refused to pull permits for work to be done, risking legal problems for the homeowner. The contractor recommended against avoiding permits. The homeowner then stopped paying on the project. Imagine this a cheap guy, who skimps on permit fees, then stops paying his contractor, who is at fault here? Then the contractor tried to settle through binding arbitration, there was a agreement made and yet the contractor wasn't paid money owed to him.
As a contractor I have had a few run ins with the unscrupulous customer. This is a contractors nightmare because the perception is the customer is always right. Running a small business is difficult at best and damn impossible when you have complaints made in a forum where you have no rebutal.. I frankly hope he wins his lawsuit or settles in his favor. The actions of angies list certainly appear to me to be woefully lopsided against a reputable contractor who has a crank of a customer. I would also point out the other comments are anonymous which is the kind of thing that got the defendants in trouble to begin with. If you really believe what you say and truth is the ultimate defense, post your name....

Toddon14th said...

Mel- Congratulations are in order for reading the lawsuit! It is a mountain of information to go through, and as you indicate in your posting, only represents 1 side of the case. There certainly are others and I hope that in due time you are able to read those as well.

For those that haven't read the lawsuit, what is at issue here is whether a consumer has a right to complain about a service provider and not be slapped with a lawsuit because the service provider didn't like what was said. When multiple, negative responses were filed in multiple forums against the contractor, rather than find out what was wrong--you know, by talking to the folks doing the complaining, he decided to file a lawsuit (at least in one case this is true!). And we aren't just talking Angie's List either. Included in his lawsuit is the DC government-- Department of Consumer and Regulatory Affairs, the very body that was put in place to protect consumers.

Regarding the case of permits. It seems to me that before you could even start a job, you'd have to have a permit pulled, so I am not sure how the contractor got in this bind in the 1st place, or how it is even relevant to this lawsuit posting. If this is one of the 1st actions he is supposed to do, after taking 1/3 of the money, how can he not be "paid"? If the homeowner needs to have a permit for work to be done and the contractor follows the law, why did the contractor enter into a contract with the homeowner in the first place? Or pull out as soon as the homeowner stated they didn't want a permit? Seems to me that violation of the law is a legal reason to pull out of a contract! Clearly, some critical pieces are missing in this particular case.

The customer doesn't always have to be right--just like the contractor doesn't always have to be right. However, what consumers look for is how the contractor--or any other type of vendor works with the consumer to resolve the issue. Suing homeowners because you don't like the fact they have filed a complaint against you sounds like poor consumer relation skills to me. And based on the fact he has a history here (in 1990, he was banned by Montgomery County, MD for doing business for at least 3 years because of the same type of things he is once again accused of doing) it seems more of a diversionary tactic than anything else!

If you read the lawsuit, you'd notice that it was more than 1 homeowner. If you had heard from all parties involved--to include Angie's List, you'd also know that the contractor was given a chance to rebut the information posted on the site According to an Angie's List representatives, he filed a long rebuttal that had nothing to do with the claims, so they opted not to post them. Just like the complaints have to be truthful, the rebuttals have to be relevant! Related to this, I'd like to know if there are any good things posted about the contractor on Angie's List. Surely some people are happy with him or his work. If there were positive things posted, then perhaps there'd be a balance

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Unknown said...

I don't know but I think both sides are at fault here. The contractor should have done a good job on his project. The consumer, on the other hand, should have complained about it but in a nicer way.

Maybe this contractor didn't have a project management program like the Sage Master Builder software.

Unknown said...

@Mark

I agree with you. And there are a lot of sage consultants out there. They can really help you with project management.

Mark Ray said...

@Russel

I am from a business intelligence consultancy and we do project planning and accounting with various programs like
Sage Accpac, Sage Master Builder etc. Maybe I could help.

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