Hot tip! Greatly increased worldwide libel risk in websites

If you publish on the web, the risk of being sued for libel, wherever in the world your web content is accessed, has greatly increased as a consequence of the decision of Australia’s highest court last month.

The defendant in this case was an American corporation which posted information on the web in the USA to be accessed by its subscribers, 98% of whom are American. Despite the fact that a very small minority of subscribers were Australian, the Australian Supreme Court decided the American corporation could be sued in Australia (as opposed to the USA), where the libel laws are far more favourable to claimants. The court placed only a few limitations on the ability to sue in Australia. Firstly, the offending webpage must have been published in Australia (i.e. downloaded and read) and, secondly, the claimant must have a reputation in Australia.

This decision will be persuasive authority in other common law jurisdictions including England. If other courts follow the Australian approach, a claimant could sue for libel on the web wherever he or she downloaded the offending material, which could be anywhere in the world. As a consequence, forum shopping is likely to be greatly increased, with foreign claimants particularly looking to sue in England due to its strict defamation laws. If you are subject to adverse comment on a webpage posted outside of England, you may well have a cause of action in England if you can establish that it has been downloaded and read in England.

If your company owns a website and you wish to limit your liability for libel, you should consider the following steps:

• Ideally, a company should take steps to impose geographical restrictions on where its web content can be viewed. However, such restrictions are unlikely to be 100 percent effective and technically are likely to be difficult to achieve. One reasonable step to take is to seek to have the reader confirm the jurisdiction from which he is accessing the material before he is able to enter the site.
• Vetting all website content to ensure it complies with libel laws around the world will simply be impractical. Therefore, we recommend that you focus on the law in key jurisdictions. Key jurisdictions will be any country with strict libel laws, such as England, in which an individual, corporation or body subject to the adverse comment has a reputation. Make sure that your website does not contain material that could be considered defamatory in these jurisdictions.

For further information please contact Susan Barty by telephone on +44(0)20 7367 2542 or by e-mail at susan.barty@cms-cmck.com or Karen Marshall by telephone on +44(0)20 7367 2522 or by e-mail at karen.marshall@cms-cmck.com