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Libel on the Net: have the legal floodgates opened?
Demon recently settled its long-running libel case with a UK academic - a decision which cost it over £250,000 and left many ISPs fearful that they too will be bombarded with defamation law suits. Sarah Left looks at just how likely this is

By Sarah Left

Published: Wednesday 05 April 2000

ISPs are still reeling this week after Demon Internet settled its case with Dr Laurence Godfrey out of court. (See 'Demon pays out £250,000 in libel case', http://www.silicon.com/a36673 ).

Godfrey, a physics and computer science lecturer, brought two cases against the ISP over two years ago, claiming he was defamed in Demon-hosted newsgroups.

Announcing the settlement, Demon said it has apologised to Godfrey - and paid out £250,000 in costs and damages - but added that the law must be reformed. Demon's parent company, Thus, argued that "it is contrary to common sense to make ISPs responsible for the millions of items carried on the Internet."

So will other ISPs find themselves being sued by anyone who claims they're hosting defamatory material? Because Demon settled out of court, a legal precedent may not have been set on this occasion. But for ISPs, the damage was done when a judge's preliminary ruling last year found that ISPs are responsible for content held on their servers. That was why the Godfrey case reached the high court in the first place, and remains a point in law. It could be used in future legal action.

The industry is, of course, rather unhappy about this. Nicholas Lansman, secretary-general of ISPA (the Internet Service Providers Association), said that ruling places an impossible burden on ISPs of being judge and jury on content.

"An average small ISP hosts 1,000 Web sites, with maybe 10 pages each. That's 10,000 pages of information. We need to have legislation that says we're not liable for content."

But David Barrett, partner with UK law firm Arnold and Porter, said ISPs are simply being held liable under the same laws as distributors of paper-based products. "For years WH Smith refused to carry Private Eye because of libel fears," he explained. Under UK law, anyone who plays a part in the distribution of libellous material - from publishers to printers to retailers - can be sued.

Barrett took issue with ISPA's argument that ISPs are nothing more than a conduit. "I never thought they could get away with that argument. They're being put in the same position that WH Smith is put in every day."

And it's not just ISPs that are worried; Godfrey's victory has begun to send shockwaves through the publishing world as well. Last week gay publication, Outcast, had its site shut down by its own ISP, Netbenefit, over fears of a libel suit from a rival paper. The Pink Paper contacted both Netbenefit and Outcast's printer to warn them of allegedly defamatory material in Outcast. The ISP took immediate action.

Netbenefit's decision makes sense in a world where ISPs must strike the delicate balance of free speech and libel law. "ISPs have to make decisions very quickly, without all the facts," ISPA's Lansman explained. "The ISPs will take the route of avoiding liability, and the sufferers will be those with content."

Stuart Campbell, associate with law firm Taylor Joynson Garrett, said: "ISPs will probably be quite brutal about this. If they've been notified about something, they won't have the time to investigate and they won't want to incur the expense. They'll just take it down."

He added that publishers who have sites shut down because of libel fears will probably not be able to sue their ISPs for breach of contract. That's a sobering thought for online publications dependent on their ISP as their only distribution channel.

Although an EU directive now in the pipeline may bring ISPs some relief, Barrett confirmed that there is no move within government to change the laws which have plagued magazine and newspaper distributors for years.

ISPs be warned.