US jury awards $11.3m over defamatory internet posting: Scheff and Parents Universal Resource Experts Inc v Bock

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:

  1. 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.
  2. 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.
  3. 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 Paula Kumar.

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.