Australian Net libel case highlights need for harmonising laws

When a computer user in Australia reads an article on a news website based in the United States, where has the article been "published"?

Where it was uploaded onto a computer server in the US, or where the reader downloaded it in Australia?

That might seem a niggling question of little importance - until you're at the centre of a defamation case. If publication occurs where readers download an article, a publisher in the Republic would have to worry about all the varied forms of defamation law in every one of the 191 countries that have internet access, argue international litigation lawyers.

"Where does the harmful act occur? If you're publishing on the Net and what you publish can be read in France, then the French courts would see that as harmful," said Mr David Jacoby, a lawyer with law firm Phillips Nizer in New York, speaking at the International Bar Association conference in Durban, South Africa.

The same perspective holds in Australia, where the Supreme Court is considering an appeal to a High Court ruling in favour of an Australian businessman who claimed he was defamed by an article printed in the American magazine Barron's, owned by Dow Jones. The article was also carried on the New Jersey-based Dow Jones website.

Some 18 media and internet companies - including the Guardian in Britain, Reuters, the Washington Post, Yahoo, Amazon.com and the New York Times - joined the defence action when it was heard in the Australian High Court. They claimed freedom of expression and the use of the Web as a publication medium was at stake.

On the other side of the case, lawyers for prominent businessman Mr Joseph Gutnick, accused of money laundering and other activities in the article, said his reputation was damaged in Australia.

The High Court found in Mr Gutnick's favour, and the decision was appealed by Dow Jones to the Supreme Court. In a preliminary decision, the Supreme Court has agreed Mr Gutnick has the right to have the case heard in Victoria, Australia, where his company has its headquarters and where 300 of the 1,700 Australian subscribers to the Dow Jones website live.

International media organisations are anxiously awaiting the ruling, which would become a precedent for other cases. But already, defamation lawyers say they look for ways of bringing libel and defamation cases in jurisdictions that have more restrictive laws, such as Britain, rather than in more media-favourable locations such as America.

"US libel law is the most protective of the media of any set of laws I know, so we see people going to London to sue for libel-based defamation in American publications," said Mr Kurt Wimmer, a lawyer who works in both the London and Washington, DC offices of law firm Covington & Burling.

British-based defamation lawyer Mr Alasdair Pepper said he successfully took this approach against the New York Times on behalf of a Welsh pharmaceutical company that felt it had been defamed in an article. He based his argument for the British hearing of the case on the small print circulation in Wales of the New York Times. "Most publications now have an internet publication", making such jurisdiction arguments easier for lawyers, he said.

But others argued that international law remained unclear on the issue of jurisdiction, pointing to the continuing attempt by France to make Yahoo remove Nazi memorabilia from its US-based auction website. The French courts found Yahoo had violated French laws against marketing such memorabilia and said Yahoo must block French access to the site.

Yahoo appealed the case in the US courts, where it won. The case is being appealed by the French litigants and will be heard in December.

One British lawyer said she would advise a potential media client to publish a controversial article as long as it would satisfy the "Reynolds Defence" - the precedent established in former Taoiseach Mr Albert Reynolds's defamation case against the Sunday Times in London. The court in that case found that the journalist had not put questions directly to Mr Reynolds, allowing him to answer allegations made in the article. If an article was based on solid information and questions had been properly put to the subject, the lawyer said she believed it should be printed.

A lawyer for US publisher CNN, which has a comprehensive news website, said he would advise CNN not to place an article on a server in the jurisdiction where it might be problematic. "But a lot of online publications don't have that option," having only one server, he said.

Another US colleague disagreed. "We're stumbling around using old-world rules about where your server is. I don't think that's going to be relevant. The question may be decided on international business law - have you personally availed of the opportunity of doing business on the internet?"

Most courts in the future will likely accept that media organisations are doing business internationally through the internet, he said.

Irish law also remains unclear on the subject, even to the Government - at least according to lawyers involved with the Ansbacher tribunal. Fears over the possibility of defamation cases led the Government to decide it would not publish the Ansbacher Report on the internet, lawyers to the tribunal said in court.

Even the Gutnick case in Australia will not definitively settle the question of jurisdiction and liability, although it will establish an important precedent, lawyers said.

An international convention on internet jurisdiction might help but many doubted a general position could be agreed across multiple countries - offering plenty of opportunity for lawyers in a volatile litigation market, admitted one lawyer.