Stephen Revill and Malcolm Webb of Belly Gully raise a protest against proposed copyright and defamation regulations for Internet service providers

It might sound unusual coming from lawyers, but here's a recommendation against making a new set of laws that creates more litigation. Let's develop a set of rules to regulate Internet service provider ("ISP") liability that explains what an ISP should do if faced with a claim that subscriber material on a web site it hosts defames another or is in breach of copyright.

As the debate continues around the world about the legal liability of ISPs, the Government has recently published its proposals for regulating ISP liability.The legal arguments arise when sites hosted by ISPs contain defamatory material or breach copyright. When an ISP is acting as a mere access provider or host for online services, it can often find itself caught in the middle of a major legal battle not of its own making. An ISP will ordinarily be liable for breach of copyright or in defamation by merely republishing the offending information, even where it was not the original author. An ISP is an easy target to sue - it can be "local" and accessible and it invariably is seen as having deep pockets.

Is the legal framework proposed sensible?
The Ministry of Economic Development proposes an ISP is only liable for any act or omission by its subscribers if it:
- has actual knowledge of the existence of information on a web site it hosts that is actionable at civil law or constitutes a criminal offence; and
- fails to remove such offending information promptly.
The proposals also rule that an ISP will be protected from defamation suits if it is able to prove that:
- it didn't know the information posted contained defamatory material;
- it didn't know the information posted was of a character likely to contain defamatory material; and
- its lack of knowledge was not due to negligence.

But even these proposals - while their objective is correct - do not go far enough. They certainly don't provide legal certainty for ISPs. Key areas of uncertainty include:
- When is an ISP deemed to have "actual knowledge"?
- Is the ISP required only to investigate once a complaint is made, or take further action?
- How quickly is an ISP required to move offending material of which it has gained actual knowledge?
- If an ISP acts in good faith and removes offending material that turns out not to be contrary to legal requirements, is the ISP protected from liability?
- What steps should an ISP take to establish it has not acted negligently?

In our view a better approach would be to develop a prescribed set of rules for ISPs to manage these issues. If ISPs can demonstrate they have followed these procedures, they should be allowed to step back and leave the subscriber and complainant to fight the dispute among themselves.

ISP liability is an increasingly common problem overseas, where the nature and extent of ISP liability hinges in large part on the degree of control exercised by ISPs in relation to the content of the web sites they host.
Establishing the current set of proposals could have the opposite effect that is intended. If we adopt laws that protect ISPs from liability on the grounds that they have no actual knowledge, it's likely that will encourage ISPs to limit or even stop any monitoring they perform, even though this may raise questions as to whether the ISP is not acting with due care or without negligence in these circumstances.

The proposals for a set of principles rather than legal rulings to help protect ISPs is similar to the model adopted in the United States. ISPs must remove hosted information if it is alleged to breach copyright, but the ISP must then inform the subscriber against whom the allegations are made. If the subscriber than notifies the ISP within a fixed time frame that it disputes the claim, it is up to the complainant to take the case to Court and notify the ISP that it is doing so.

If the complainant fails to take this action and notify the ISP within a further specified period, the ISP may reinstate the offending material, with legal impunity. There is no reason similar protocols could not be adopted successfully in New Zealand.

This is a general summary only and should not be taken as a substitute for specific advice.

Stephen Revill and Malcolm Webb are partners in Bell Gully's communications, technology, and media group.

Web site: Bell Gully
Malcolm Webb email: malcolm.webb@bellgully.com
Stephen Revill email: stephen.revill@bellgully.com

March 2001