Under current New Zealand law, Internet Service Providers ("ISP's") may be potentially liable for carrying third party information, giving rise to civil and criminal causes of action. This is the case even where the ISP has no knowledge of the actionable information. A recent high court decision in the United Kingdom concerning the ISP Demon has revisited this general position, and effectively afforded greater protection to ISP's in the United Kingdom.

ISP Liability in the United Kingdom

The previous position concerning ISP liability in the United Kingdom was based upon the idea that ISP's had a duty of care to prevent their sites from breaking the law. This included hosting sites such as newsgroup sites whichsites that posted information whichinformation which broke the law in some way. ISP's were held accountable for information appearing on their sites, much like a publisher is held accountable for the contents of its newspaper.

The Venables/Thompson Injunction

The murderers of 2 year old James Bulger in 1993, Jon Venables and Robert Thompson, were granted parole last month after serving half of their life imprisonment jail sentences. After numerous inflammatory comments by members of James Bulger's family, Dame Elizabeth Butler-Slos, England's most senior family division judge in the high court, granted an injunction banning the media in the United Kingdom from disclosing information about the new identities, addresses, appearances, and accents of Venables and Thompson.

The injunction granted by the judge did not specifically refer to ISP's and was directed at "press and broadcasters". However, an ISP generally includes any person or organisation that provides users with access to and/or content via the internetInternet. As such, Demon was aware that it could still be considered a "broadcaster" under the injunction and therefore could face fines for contempt of court if users posted material about Thompson and Venables in its chat rooms or newsgroups without its knowledge.

Demon's Challenge

In light of this, Demon challenged the injunction prohibiting the UK media from publishing information about Venables and Thompson, by seeking an exception for ISP's in certain circumstances. Demon argued it should not be held responsible for material that breached the injunction if that material was posted on its web pages without its knowledge.

After considering the arguments, the judge held that the injunction's application to the internet was inappropriate, and approved changes to the injunction exempting ISP's from culpability for breach of the injunction if the ISP took "all reasonable steps" to prevent the publication of the offending material.

An ISP in the United Kingdom will now only be held in contempt of court for publication of the identities etc of Venables and Thompson, if it has been made aware that information about the convicted murderers has been posted on its server or could be accessed via its service, or was likely to be placed on its servers or accessed via its service, and failed to take all reasonable steps to prevent such action.

Although the Judge did not specifically state what the Ccourt would consider to be "reasonable steps", she acknowledged this would include taking steps to remove the material from the ISP's server or to block access to it.

Effectiveness of the Injunction

The injunction issued in this case only applied to the United Kingdom, being England and Wales. So information could still be published in newspapers or posted on Wweb sites hosted elsewhere. In practice, the effectiveness of this injunction is questionable. Interestingly, if the injunction had been granted in New Zealand and a New Zealand Wweb site contained a link to another Wweb site outside of New Zealand which referred to the identities of Venables and Thompson, this would be likely to be considered a publication of the material and therefore a breach of the injunction.

The New Zealand Position

The Venables/Thompson injunction has no direct application in New Zealand. Given it is an English high court decision however, it may be persuasive in any future litigation concerning ISP liability in New Zealand. This could mean that a New Zealand court maymight be persuaded to similarly limit ISP liability in certain circumstances.

As the law currently stands in New Zealand though, there is no specific legislation regulating the services offered by ISP's and no explicit exceptions for ISP liability in the case of absence of knowledge. Potential sources of ISP liability for content includecontent includes defamation, breach of intellectual property, and breach of privacy.

An argument does exist that the Defamation Act 1992 provides an exception to ISP liability for absence of knowledge in relation to defamation. Under this Act, "distributors" and "processors" may be protected against liability if they had no knowledge of the defamatory material and did not know that the material distributed was likely to be defamatory in nature. The question of whether ISP's fall under the definition of "distributors" and "processors" has, though, yet to be tested in a New Zealand court.

Under New Zealand's Copyright Act 1994, those who "innocently" deal with infringing copies can avoid liability for some "secondary" infringements, such as importing or possessing infringing copies in the course of business. An innocent infringer will also generally not be liable for damages resulting from the infringement (but will be liable for an account of profits).

In any case, the Law Commission has recommended in its report entitled Electronic Commerce Part 2: A Basic Legal Framework, that an ISP should only face civil or criminal liability if it has actual knowledge of the existence of the relevant information and fails to promptly remove the offending information. Although the government initially intended to include provisions concerning ISP liability in the Electronic Transactions Bill, the Ministry of Economic Development has indicated that this issue is of great enough importance to warrant its own legislation. We await future developments.

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

x-tech group Simpson Grierson Web site: x-tech group Simpson Grierson

Contacts
Earl Gray, Partner, earl.gray@simpsongrierson.com
Michael Sage, Partner, michael.sage@simpsongrierson.com
Jan Kelly, Partner, jan.kelly@simpsongrierson.com
Willy Akel, Partner, william.akel@simpsongrierson.com
Tracey Walker, Partner, tracey.walker@simpsongrierson.com
Karen Ngan, Senior Associate, karen.ngan@simpsongrierson.com
Lianne Young, Senior Associate, lianne.young@simpsongrierson.com
Cherie Lawrence, Solicitor, cherie.lawrence@simpsongrierson.com


October 2001