29 July, 2009

One of the most unloved (and unread) features of commercial websites, the “disclaimer”, may have been given a new lease of life by a recent court decision which appears to have endorsed a disclaimer as a means of avoiding liability for inaccurate statements made on a website. However, in my view this case is not an endorsement of website “small print” so much as a sensible refusal by the courts to impose costly duties of care on websites providing information to the public.

Gary and Karen Patchett were suing the Swimming Pool and Allied Trades Association (SPATA) after their swimming pool contractor – whose details they had obtained from SPATA’s website – ceased trading. The Patchetts claimed that SPATA’s website had failed to make it clear that the contractor was only an “associate member”, and thus not covered by SPATA’s insurance scheme.

The court held that SPATA did potentially owe a duty to the Patchetts, as the site was directed only to those planning to have swimming pools installed rather than the general public at large. However, SPATA was not liable, because (as Lord Clarke put it in his judgment), “when the website is read as a whole, it urges independent enquiry” before people made a buying decision.

In particular, Lord Clarke singled out the following statement on the site:

“SPATA supplies an information pack and members lists which give details of suitably qualified and approved installers in the customer’s area. The pack includes a Contract Check List which sets out the questions that the customer should ask a would-be tenderer together with those which must be asked of the appointed installer before work starts and prior to releasing the final payment.”

Had the Patchetts requested the information pack and members list, they would have seen that their contractor was not a full member of SPATA, and hence SPATA were not liable for the inaccurate statement on their website.

What are the implications of this for businesses with websites providing information to the public?

1. Don’t panic

Many lawyers will be taking this opportunity to encourage their clients to review their website “disclaimers”, warning them of the dangers this case poses to those who fail to do so.

However, the first lesson to draw from this case is the courts’ reluctance to impose a duty of case on website owners to those using their sites, even where a website is directed towards a specialised audience who are likely regard it as authoritative (as in the case of SPATA).

2. Be alert

That said, the case does show the need to ensure information on commercial websites is kept accurate. SPATA may have fought off the Patchetts’ claim, but the inaccurate and misleading information on their website will have cost them dearly in legal costs (not all of which they will be able to recover from the Patchetts), lost management time and adverse publicity.

SPATA were not saved by a legalistic disclaimer buried on an obscure corner of their website. Looking at their 2006 site on the Internet Archive, the statement about their information pack was set out on the first-linked page from their welcome page. There is every reason (including a famous Lord Denning judgment) to believe that the courts will look less favourably at the sort of small-print verbiage lurking on many sites behind the “Terms and conditions” link.

The lesson is not “rely on your lawyers” but “make sure you are clear and accurate in the first place”.

3. Follow the money

A final practical observation. The reason SPATA ended up in court was, in the end, because the Patchetts’ contractor had gone bust and had no money with which to compensate them. SPATA did have resources to meet a claim, and hence the Patchetts (quite reasonably) sought redress from them.

Even if your involvement in a transaction is pretty tangential – there was no direct contact between the Patchetts and SPATA, beyond Mr Patchett’s accessing their website – if you are the “last person standing” with any money, then you may well be a target for legal action. As observed above, this is a far from pain-free experience even if you eventually win.

This should concentrate businesses’ minds on making sure they get their website content right. It is notable that, looking at SPATA’s current website, they appear to have concentrated on removing room for misunderstanding rather than adding legalistic disclaimers.

That strikes me as the right approach – but (and you knew this was coming, didn’t you?) my firm’s insurers will want me to emphasise that (like everything else on here) this is my personal view and should not be relied upon as legal advice!