When it comes to negative reviews, they hit service-based businesses harder than product-based ones. The damage is even more pronounced when customer experience is a significant part of the service, as is the case with coworking spaces. A single scathing review can impact bookings, member retention, and even SEO ranking.
So, what can you do to protect your business and reputation from bad reviews? Should you go all out and start a legal battle with each member or customer who is unhappy because the meeting room they wanted wasn’t available?
Let’s unpack what you can and can’t do (legally speaking) when someone trashes your business’s good name online. We’ll also explore the fine line between negative and defamatory, whether legal action is really worth it, and how to manage your online reputation without needing to call your lawyer every other Tuesday.
Are bad reviews really that bad?
You might be tempted to shrug off a bad review as just another disgruntled member venting online. After all, you can’t please everyone, right? As long as you held your part of the deal as stipulated in the membership agreement, the problem is out of your hands.
Sadly, bad reviews carry real weight, especially in a highly competitive industry like coworking spaces. According to a study by PissedConsumer, 84% of people read reviews before making a decision and are heavily influenced by negative ones.
Say 80% of your potential customers read a few negative reviews about your business, and half of them decide to go with the competition because of that. If this happens, you’re out of business in half a year.
Plus, search engines also care about a business’s reputation. Google’s local search algorithm, for instance, prioritizes businesses with frequent, positive, and well-responded-to reviews. Even one or two sour reviews without a response can be a red flag to the algorithm, which may push you down in the SERP.
If you don’t care much about your reputation (you should), you will care about your bottom line. A Harvard Business School study found that a one-star increase in a Yelp rating can lead to a 5–9% increase in revenue. Flip that around, and you can imagine the impact of a single poorly worded, highly visible bad review.
Generate recurring revenue and offer exceptional customer experience at your shared or coworking space
Was the bad teview justified?
"Negative reviews are not always unjustified. Sure, it’s hard to believe that the service or product you’ve worked hard to design could be flawed, but once you open your ears and allow customers to give you honest feedback, things will change for the better. Our critics helped us spot blind spots, refine our services, and build real trust." — Ian Gardner, Director of Sales and Business Development at Sigma Tax Pro.
When you’re faced with negative reviews, your knee-jerk reaction is defense. But before you start composing a cease and desist, it’s worth pausing to ask a crucial question:
Was the review fair?
“In many cases, negative feedback is a sign that something slipped through the cracks (a double-booked meeting room, patchy Wi-Fi, or a front desk staffer who was having an off day). These reviews, while uncomfortable, are often rooted in genuine experience, and that makes them incredibly valuable.” — Ben Bouman, Business Owner at HeavyLift Direct.
Negative vs. defamatory—know the legal line
If you’re considering any sort of legal response, it’s essential to know the difference between negative and defamatory feedback.
In plain terms, a negative review, even if it’s harsh, unfair, or written in ALL CAPS, is rooted in opinion or personal experience.
Some members may say things like:
“The Wi-Fi was painfully slow, and I couldn’t get any work done.”
or
“Staff seemed disinterested, and the coffee tasted like regret.”
Do these hurt your reputation and/or your feelings? Absolutely. But they’re generally considered protected speech.
In most jurisdictions, including the UK, the U.S., Canada, Australia, and much of the EU, opinions are not considered defamatory, even if they’re exaggerated, unfair, or delivered with a sharp edge. Defamation laws around the world typically protect a person’s right to express dissatisfaction, as long as they’re not making false factual claims.
Defamation occurs when someone publishes a false statement of fact that causes reputational damage.
This is what it looks like:
“This coworking space scams its members and steals their credit card info.”
Or
“They operate illegally and ignore fire safety laws.”
Such claims are serious and, if untrue, are usually designed to hurt the target’s reputation. In this case, they may meet the legal threshold for defamation.
That said, courts worldwide are cautious about defamation cases involving online reviews. In most cases, you’ll need solid evidence that the review actually damaged your business, which is not always the most straightforward thing to do.
Jeffrey Zhou, CEO and Founder of Fig Loans, puts it best:
"It’s tempting to react fast when someone publicly criticizes you, but legal action should never be your first move. The difference between negative reviews and defamatory ones is usually blurry, which is why it’s best to consult a lawyer before making legal threats. Overreacting to a strongly worded opinion can make you look worse in the long term.”
Can you sue over a bad review? Should you?
Yes, you can sue someone over a bad review.
Around the world, defamation laws do allow businesses to take legal action if a review published to a third party is proven to be false, presented as a fact, and harmful to the business’s reputation. Countries like the U.S., Canada, Australia, and those across the EU all provide avenues for defamation claims, although the standards, burden of proof, and “serious harm” thresholds vary.
For example:
- In the U.S., the First Amendment strongly protects free speech, so plaintiffs must prove the review was false and malicious (especially if they're a public-facing business).
- In Australia, the laws are more favorable to plaintiffs, but recent reforms require “serious financial harm” before a case proceeds.
- In most EU countries, defamation laws are strict, but so are the penalties for frivolous lawsuits.
While legal action is technically possible, courts in most jurisdictions are cautious about silencing public opinion, especially if it comes from consumers sharing genuine experiences. Therefore, the best course of action is to take all necessary precautions to avoid getting sued yourself and manage the negative feedback with grace and poise.
Josh Howarth, Co-Founder & CTO at Exploding Topics, talks about how legal action could backfire:
“A business suing a freelancer, student, or solo entrepreneur for posting their honest experience? It rarely looks good, even if you're in the legal right. Public sentiment almost always sides with the underdog.”
Of course, this doesn’t mean you can’t take any action to protect your reputation. In many countries, you have other legal-ish routes, like:
- Flag the review on the platform (especially if it violates the terms of service),
- Send a cease and desist letter to the reviewer (with your lawyer’s guidance),
- Use dispute resolution platforms, which are increasingly available through local small claims systems or consumer protection services.
But again, these should be last resorts, not your go-to strategy.
How to do reputation management
In most cases, the best defense is a proactive, professional response that demonstrates your brand's credibility, even in the face of criticism.
Here are a few tried-and-tested tips on how to handle bad reviews the smart way:
1. Respond promptly, but calmly
Research indicates that over 51% of consumers expect a response to their review (positive or negative) within seven days. Also, they are 33% more likely to turn a negative opinion into a positive one if the reply is polite and useful.
Here’s an example of how you can respond:
“We’re sorry to hear about your experience, and we’d love the chance to make things right. Please reach out directly so we can follow up.”
Even if the original reviewer never says anything else ever again, future readers will see your professionalism and willingness to listen.
Bonus Tip: Don’t turn this into a full-on social media brawl. Yes, big brands do it all the time, but they almost exclusively “fight” with other big brands. They avoid punching down. In your case, the best course of action is to take the conversation offline, away from the public eye.
2. Acknowledge valid feedback
If the review is justified, even partially, own it. A simple admission can go a long way toward building trust, as it shows growth and humility.
Even better:
"Don’t just collect feedback. Act on it! Acknowledging valid criticism shows customers you’re listening, but following through is what builds loyalty. Real improvement is extremely good PR, so treat every review, even a harsh one, as a roadmap to doing better." — Anna Zhang, Head of Marketing at U7BUY.
3. Keep records
Even if you’re not planning legal action, keep screenshots and logs of problematic reviews, communications, and internal notes. If things escalate later, you'll want a paper trail.
When to take legal action
If someone posts verifiably false information, you may have grounds for a legal response. The same applies if the review includes threats, hate speech, personal attacks, or language intended to incite harm (either reputational or physical).
Additionally, if you have strong reason to believe a competitor or bad actor is posting fake negative feedback, this may fall under unfair competition or consumer protection laws in many regions.
First, document everything. Take screenshots, note the time and date, and report the post to the platform. Also, check whether the reviewer was ever a member of your coworking communities.
Next, talk to a legal advisor in your jurisdiction to assess whether the review meets the criteria for the claim you want to make. Laws vary by country, which is why you need local expertise to ensure compliance. Legal counsel can also assist you in sending a cease-and-desist letter or filing a formal complaint with the platform or local regulatory bodies.
Even if you don’t intend to sue, a lawyer can help you craft a clear public response or guide your communications strategy, especially if media or legal platforms become involved. In some cases, the mere presence of legal counsel can de-escalate tensions and show professionalism.
Wrap up
No one wants to deal with negative reviews or difficult customers. Yet, these are part of what it means to run a business.
The good news is that most can be managed with transparency, empathy, and strong membership contracts. When handled right, tough feedback can strengthen your coworking space’s reputation.
