Internet defamation: Motley fools rush in

A small businessman who breeds and sells specialised animals quite legally, consulted us recently.

He was a sole trader, and in addition he had a holiday business linked to the animal operation.

Three years ago, not long after getting started, he’d had a run-in with one of his customers. The animal had died soon after the sale. It was not clear whether this was due to poor handling by the purchaser or a latent illness, but they both fell out over it at the time. Because the animals concerned are specialised, only a small community of people in the United Kingdom is likely to be interested in them (or related holidays) at any one time. Our client forgot about the incident and got on with establishing his business.

In June 2001 our client was horrified to discover that three Internet chat groups - probably the only three in the United Kingdom concerned with this type of animal - had begun receiving defamatory e-mail postings, harking back to the 1999 incident and effectively accusing our client of sharp practice or fraud. The posted e-mails made it clear that our client ought not to be trusted and that no one should contemplate buying animals from him. The consequences for our client’s reputation and his business could hardly have been more grave.

We were able fairly quickly to persuade the ISPs who hosted the three chat groups to remove the defamatory postings.  This was done promptly as one might have expected standing the outcome of Godfrey v Demon Internet [1999] 4 All ER 342.  There was, it seemed, no doubt as to who was to blame for the e-mails, but here we encountered a twist to the tale. As part of our response we had also written to the English based e- mail provider. Their London solicitors informed us that the e-mail account which had been used to spread the defamatory statements to all the chat groups was not registered in the name of the suspected defamer. This was a surprise. There might be a second, unknown, defender to consider. How was our client to find out the identity of the person who had been allowing the culprit access to his (or her, as it turned out) e-mail account?  Prior to February 2001, this task might have proved insurmountable, or at least only capable of being overcome after the expenditure of large sums of money and court appearances.  However, the decision in Totalise plc v Motley Fool Ltd [TLR 15/3/2001 19th February 2001] now came to our aid.

The Totalise Case

Motley Fool Ltd is one of the best known websites in the UK in relation to investment and share dealing advice. In common with many other websites, the Motley Fool Ltd site had a ‘discussion board’ where investors could exchange chat, provide tips, and generally talk about anything of relevance to online investment. However, on one discussion board a large number of defamatory remarks were posted about an ISP called Totalise plc.  Someone hiding behind the User Name “Zeddust” had posted the comments. Motley Fool Ltd agreed to remove the allegedly defamatory postings. They went further and banned “Zeddust” from using its site. However “Zeddust” moved to another site and posted 90 more defamatory messages.

Totalise now needed to know urgently who “Zeddust” was. Motley Fool Ltd refused to identify him. They pointed to the Data Protection Act, and to their own terms and conditions, which undertook to preserve the confidentiality of their users. The exceptions to this being as per a user “Privacy Policy” or if ordered to disclose by an order of court. There was as yet no ongoing court action between Totalise plc or the alleged defamer, and there might never be. This potential difficulty was overcome under reference to X Limited v Morgan Grampian [1991] 1 AC (HL) 3 on the basis that Totalise required the information to obtain proper legal advice as to its rights.  Totalise applied to the court for an order requiring Motley Fool to disclose  “Zeddust’s” identity. It relied upon the court’s discretionary power established in Norwich Pharmacal [1974] AC 133 to order disclosure of a wrongdoer’s identity from those unwittingly involved in the wrongdoer’s activities.

Under the Contempt of Court Act 1981, section 10, a court can require disclosure of information contained “in a publication for which a person is responsible” if it is satisfied that the disclosure is necessary in the interests of justice, national security, or for the prevention of disorder or crime”. Mr Justice Owen was prepared to hold (a) that the section was primarily concerned with balancing journalistic freedom against protection of individual rights and there was no such balancing act in this case; and (b) even if wrong on the first point, disclosure here was in the interests of justice. The court ordered that Motley Fool Ltd must identify the user concerned. The court went further. It stated that such disclosure was permitted under Section 35 of the Data Protection Act 1998 (information required for prospective legal proceedings or to obtain legal advice). The court also awarded expenses against Motley Fool Ltd on the basis that the information ought to have been provided voluntarily standing the circumstances.

Returning to our client and his animal rearing/holiday business, we then wrote to the e-mail provider citing Totalise v Motley Fool. We requested that they provide us with the identity of the person(s) in whose name the e-mail account was registered.  After a pause of some weeks, we received from the e-mail provider a copy letter addressed to the registered user. This stated that in terms of the e-mail provider’s terms and conditions of usage an individual’s identity could be disclosed if there was a legal obligation to do so. Apparently the e-mail company agreed with our submission that the Motley Fool case created such an obligation.

Loutchansky v Times Newspapers Ltd

In another interesting Internet defamation development (which was aired at length during the trial but unfortunately did not make it into the final judgment), the case of Loutchansky v Times Newspapers Ltd [27 April 2001 QBD, Mr Justice Gray] raised the issue of when the prescriptive period begins to run where a newspaper article is still available on the Internet archive section of a newspaper long after the date of first publication in hard copy form. It should be noted that the one year limitation period inserted into Section 4A of the Limitation Act 1980 by Section 5(1) of the Defamation Act 1996 does not apply to Scotland, so to that extent this discussion is academic, but the point has wider application and may crop up if you are advising on internet matters. In this case, two articles were available over a year later in the Internet section of The Times. The Times argued that there had been no alteration or editing of the article since first publication, and that the prescriptive period should run from the date of original publication in the hardcopy newspaper. The Times sought to argue the American “single publication rule” that publication takes place on the day the material is first posted on the website. Somewhat controversially, Mr Justice Gray felt that provided it could be shown that someone had read the article on the website, a libel action could be brought within a year of that person “hitting” the article irrespective of when the article was first posted on the website. This view if correct is bad news for the press! The Court also ruled that in relation to qualified privilege defences, the publisher must be able to establish the existence of that defence at each time of publication, not merely that it existed on the basis of the prevailing circumstances when the article was first published. The Loutchansky case is currently under appeal after Mr Justice Gray’s decision on other issues, and hopefully these two matters will receive passing comment at that stage.

Paul Motion is a partner with Ledingham Chalmers, Edinburgh and Convener of the Society’s Electronic Commerce Committee