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Bulletins Story:
US JURY AWARDS $11.3 MILLION OVER DEFAMATORY INTERNET POSTING:
SCHEFF AND PARENTS UNIVERSAL RESOURCE EXPERTS INC v
BOCK
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Date: 31.10.2006
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This action arose from a bulletin posted by the defendant in the
United States on an internet message board accusing the plaintiffs
of being “con artists” and “frauds” who “exploit[ed] families” and
placed children in “risky” and “possibly abusive” programs.
The plaintiffs successfully established that these postings were
defamatory and a jury awarded them a staggering $11.3m (£6m)
including $5m (£2.7m) in punitive damages. This is believed to be
the largest sum ever awarded over postings on an internet message
board.
This case sends a clear warning to those who post articles on
internet bulletin boards. This said, the huge award is unlikely to
result in a new house and car for the plaintiffs as they were
awarded against the individual who posted the bulletin and not
against the website itself. The operator of the bulletin board had
originally been named as a defendant, but the claim against it was
subsequently dropped because of the strict protection that US law
provides online publishers.
Are UK courts likely to award damages on a similar level
in defamation actions?
In a word: no.
The position in the UK is very different. Damages are
effectively capped at £200,000 and it is highly unlikely that the
UK will follow the US in allowing such astronomical awards, unless
economic loss can be proved in the form of ‘special damage’.
Following Elton John’s claim a few years ago (John v MGN
Ltd), a libel defendant is entitled to invite the jurors to
draw comparisons between the level of damages sought by the
claimant and the damages awarded in personal injury cases (the
latter are often significantly lower).
Would there have been a similar judgment in the
UK?
In the UK it is much more likely that the bulletin board would
have been sued instead, subject to possible defences under the
Defamation Act 1996 and Electronic Commerce (EC Directive)
Regulations 2002.
The first defence available to the bulletin board is that of
innocent dissemination. To succeed in this defence, they would need
to prove that they did not publish the statement, that they took
reasonable care in relation to its publication and that they did
not know that they caused or contributed to the publication of the
defamatory statement.
The difficulty lies in determining whether, in law, a website or
bulletin board is the publisher. Whilst there are currently no
reported cases of bulletin boards defending libel actions using the
innocent dissemination defence, this is likely to change soon with
the proliferation of blogs and discussion boards. In the meantime,
the following observations can be made:
- Although the court has held in Totalise Plc v Motley Fool
Ltd that a website was not responsible for messages on a
bulletin board, this was within the meaning of section 10 of the
Contempt of Court Act 1981 (ie disclosure of sources). It is
questionable whether this could extend to responsibility for
defamatory messages.
- Bulletin boards would argue that they are only involved in
“processing, making copies of, or distributing electronic
medium in or on which the statement is recorded, or in operating or
providing any equipment, system or service by means of which the
statement is retrieved, copied, distributed or made available in
electronic form”. If so, this would provide the bulletin board
with a defence under section1(3)(c) of the Defamation Act.
- Alternatively, bulletin boards would argue that they are not
liable for defamatory content on their discussion boards because
they are only involved as the “operator or provider of access
to a communications system by means of which the statement is
transmitted, or made available by a person over whom he has no
effective control” (Defamation Act section1(3)(e)). Whether
bulletin boards fall under this section depends on the degree of
control they exercise over their website and its contents. For
example, if the website is hosted by an independent contractor,
then its operators will arguably be considered a publisher and may
therefore be unable to rely on this defence.
Further, the defence of innocent dissemination would be likely
to fail in circumstances where, for example following threats from
the claimant’s solicitors, the bulletin board either refuses to
pull the defamatory article or pulls it but then subsequently
reposts it. This would amount to effective control and would place
the bulletin board in the same position as any other publisher
(electronic or otherwise).
A bulletin board is also likely to have defences available under
the Electronic Commerce Regulations, although a detailed analysis
of these is beyond the scope of this e-bulletin. In theory, the
bulletin board could argue that they were a mere conduit, caching
or a host. These defences similarly amount to no effective control
over the defamer. However, it is generally thought that these
defences are only available to ISPs rather then operators of
bulletin boards and it will be interesting to see in the future
whether bulletin boards successfully defend defamation actions
based on the Electronic Commerce Regulations.
Swan Turton is involved in a number of libel disputes concerning
bulletin boards. If you would like to discuss the issues raised in
this e-bulletin in more detail, please do not hesitate to contact
Tom Cowling.
Paula Martinovich and Tom
Cowling
Defamation & Privacy / Digital Media
e-bulletins are for general guidance only. Legal advice
should be sought before taking action in relation to specific
matters. Where reference is made to Court decisions facts
referred to are those reported as found by the Court. Please
note that past bulletins included in the Archive have not been
updated by any subsequent changes in statute or case
law.
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