ISPs reflect on landmark libel settlement

UK ebusinesses and ISPs have called for a change to UK legislation to protect them from potentially crippling legal actions. The move follows last month's decision by ISP Demon Internet to settle out of court with an academic who claimed that he had been libelled in a Demon-hosted chatroom.

The response from those running ebusinesses or ISPs, and from lawyers and civil libertarians, has shown that legal regulation of cyberspace remains a grey area.

Lawyers said that the Demon settlement in the action brought against it by Laurence Godfrey does not create a legal precedent.

However, ebusiness managers and those responsible for content from users and subscribers will be concerned at the signals that the settlement sends out. Demon itself, in a statement following the settlement, said that it "remained convinced that the law has not kept with the development of the internet", and that "ISPs should not be liable for the millions of items carried on the internet every day"

.Uneven playing field
Part of the problem with regulating and controlling the internet is its global nature. Lawyers have pointed out that ISPs in the US, for example, are not held liable for defamatory content posted on sites they host.

Under the 1996 Defamation Act, UK ISPs are not responsible for content posted on their site, providing they can demonstrate that they did not contribute to the posting. The definition of what constitutes a contribution remains legally unclear.

ISPs are treated as 'common carriers', like telcos - which are not held responsible for content transmitted over their networks - until they are informed that offensive or libellous content has been posted. Then their status seems to change.

David Engel, an internet lawyer at Theodore Goddard, said Demon could have been seen to have contributed to the defamation of Godfrey by not taking down the posting after receiving complaints from the eventual litigant. "Demon fell foul because it did not do anything about it when it was put on notice," he says.

But he adds that this will not open the floodgates to huge numbers of libel actions as some ISPs fear. "What has happened here is entirely in accordance with existing defamation law. No new precedent has been created."

Protecting freedom of speech
This view is also held by Alex Hazell, a lawyer at PSINet. "The 1996 Defamation Act still needs clarification, and that clarification will come in terms of legal precedent." He adds that Demon's out-of-court settlement has not created a precedent that will imperil other ISPs. "We do not expect a flood of writs," he says.

But some industry insiders believe that changes in the law are urgently needed, in particular relating to how ISPs and ebusinesses are regulated. They say it is vital for firm guidelines to be drawn up so that material cannot be pulled from a site simply because someone objects to it. This flies in the face of the free speech ethos that underpins the internet.

Keith Mitchell, director of the London Internet Exchange, says the fact that Demon was forced into a pay-out demonstrates that existing laws are inadequate. "What is needed is a formal procedure for warning ISPs to take defamatory material down, and a timescale for them to do that," he says. The key point, according to Mitchell, is that ISPs need to know how to avoid contributing to the libel.

Heads I win, tails you lose
The ambiguity is highlighted by Clare Gilbert, general counsel for AOL Europe. "We have a number of concerns about the 1996 Defamation Act," she says. "An amendment to the Act purports to give a defence to network providers, which takes into account the vast volume of content passing though their services. The problem is that the amendment makes the defence disappear as soon as the provider receives notice of infringing content, even if the ISP has no control over that content."

As reported, the solution for ISPs and hosting companies supporting ecommerce sites is to ensure that the terms and conditions users agrees to make clear that the ISP or hosting site has the power to censor or remove material that it considers to be defamatory.

Graham Avory, marketing manager at trade group e-centre UK, also warns UK ISPs and hosts that they need to be careful when posting content from overseas users, where it would be difficult to pursue those abusing the system.

Changing terms and conditions to allow the ISP to remove offensive content is necessary because otherwise ISPs could be sued by users on the grounds that their right to freedom of expression had been violated.

Nicholas Lansman, secretary general of the Internet Service Providers Association, warns that the present ambiguities in the law, leaves ISPs stranded between a rock and a hard place. "It's distracting the industry from the real business of growing ebusinesses," he says.