Online advice: worth the risks?

Whether you are purchasing legal forms and templates, seeking a medical diagnosis, getting insider information when choosing a school or university, or soliciting the opinions of product aficionados on a prospective purchase, there are many ways to get guidance and advice online - but what are the risks for those providing this guidance and advice?

In this article I look at the legal issues, with a focus on legal advice.

Online legal advice

This website has a public Q&A where users can ask legal questions, and I often respond to particular questions asked by users in blog comments. I also sell legal templates through www.website-contracts.co.uk, and potential customers regularly ask for help when choosing templates, and adapting templates they have purchased. The risks of providing legal advice online are therefore a particular concern to me.

But SEQ Legal is far from alone: a great many law firms and other organisations provide similar sorts of guidance to internet users. Sometimes this is a paid-for commercial service, and sometimes a public service; very often it is marketing.

For individual lawyers, social media services are an easy way to raise profiles, and one aspect of that profile raising may be the provision of legal guidance.  Twitter, LinkedIn, discussion forums and the like are useful tools for legal professionals, but the dangers are obvious.

Getting it wrong

When a lawyer advises a client on a particular legal issue, the lawyer will want to know everything about the client's situation. The lawyer will interview the client, and study all the documentation relating to the matter. This helps ensure that all relevant legal issues are picked up, and that advice is appropriately framed.

Online advice, by contrast, is often provided on the basis of a brief - and all too often grammatically challenged - description of the problem, with no interview and no background documentation. The lawyer will not be in a position to see all the relevant information. Advice is therefore liable to be partial at best, and can be misleading.

What are the risks?

Different types of legal action can arise out of the giving of advice online.

If the advisory service is paid, bad advice might amount to a breach of contract. Irrespective of whether there is a contract, bad advice could lead to a claim in negligence.

Even where advice isn't defective, there can be legal problems: the discussion of a problem or situation might involve an actionable breach of confidence or a breach of data protection law; it might even amount to defamation.

Breaches of contract

Providing advice online as part of a contract for services carries the risk of a breach of contract. As with any contract situation, the terms of the contract should be analysed to determine what constitutes a breach.

Where not express, a duty to take reasonable skill and care in the provision of a service is implied into most contracts for services governed by English law, and poor advice could amount to a breach of this duty.

Negligence

To bring a successful claim for negligent misstatement, the claimant must demonstrate that the defendant owes the claimant a duty of care, arising out of a special relationship between the parties. The defendant must have made a careless (negligent) statement, and the defendant must have placed reasonable reliance on that statement, suffering loss as a consequence.

To date, there is relatively little case concerning negligent misstatement on the internet - but one Court of Appeal ruling from 2009 is particularly helpful.

In Gary & Karen Patchett v Swimming Pool & Allied Trades Association Ltd (SPATA) (2009), the SPATA website provided details of qualified and approved swimming pool installers. The claimants relied on the information in arranging for a company, an associate member of the defendants' trades association, to install their swimming pool. The company became insolvent and ceased trading and the claimants had to have the work completed by another contractor, suffering financial losses as a result.

Although there was no express disclaimer of liability, there was a suggestion that users make further enquiry. Lord Clarke gave the judgment:

I do not think that it can fairly be held that SPATA assumed a legal responsibility to the claimants for the accuracy of the statements in the website without the further enquiry which the website itself urged.

Notwithstanding the failure of the Patchetts' claim, the Court of Appeal did leave open the door for future claims based on online advice: depending upon the circumstances, a company could be liable for false information on a website.

Where specific advice is provided in response to a specific question, then all else being equal the courts are rather more likely to find for a claimant.

Data protection and confidentiality

If information published on the web contains personal data (see http://www.seqlegal.com/blog/what-personal-data), then the processing of that information will be regulated by data protection laws.

Questions about legal issues often include such personal information. Lazy students aside, legal help is usually sought in relation to specific problems involving real people.  From time to time, I have to delete names and other identifying information from blog post comments and Q&A questions.  Other webmasters should do likewise.

Where breaches of data protection law have the potential to cause real damage, regulators take those breaches very seriously. Enforcement action against those breaking the law are common.

Defamation and other offending material

There is a similar problem with defamation: information given by an individual posting a question requesting advice, could lead to individuals or organisations being identified.

It's easy to image defamation being an issue where an individual has a grievance against an employer company, where a trader attacks a competitor, or where a customer criticises a supplier.  Disparaging the goods or services of a competitor or other organisation (whether directly or by implication) could lead to claims under the tort of slander of goods, a species of malicious falsehood.

Website operators can mitigate the risk of potential legal action by implementing processes of prior review and moderation of third party postings before publication.

If the threat of defamation claims over users' posts becomes a reality, they may now be able to rely on the new 'website operator' defence under the new Defamation Act (see our recent article on the website operators' defence).

Law Society Practice Note

Solicitors who use social media for professional purposes should be aware of the Law Society's Practice Note on the subject, which states that if you "form an online relationship with a client, you should consider whether you might breach any of the Principles or requirements in the SRA Code". It also highlights the risks including the need to comply with the SRA's requirements on confidentiality and disclosure.

Managing the risks

Risk management steps for those providing online advice to consider include the following.

Disclaimers: The need for suitably worded disclaimers of liability, clearly visible to website visitors - or even better expressly accepted by them - is one clear lesson from the Patchett case. Disclaimers need to be carefully drafted to give them a good chance of being effective: the courts have lots of tools at their disposal to attack the enforceability of disclaimers, such as the Unfair Contract Terms Act 1977.

Accuracy: Operators should consider instituting a formal procedure to ensure guidance and advice is accurate and, where relevant, kept up to date.

Moderation and takedown: Operators should consider implementing moderation of third party content – combined with a robust takedown policy. If moderation is not considered necessary, ensure there is a simple abuse reporting process.

Access to defences: The hosting defence provides some cover for providers of 'information society services'.  Under Article 14 of the Ecommerce Directive (2000/31/EC), liability is limited - but this defence only applies where the provider does not control or have knowledge of the illegal activity or information, and expeditiously removes the offending information when alerted to it. In addition to this defence and the new 'website operators defence', relevant defences in the case of a defamation claim include those set out in Section 1 of the Defamation Act 1996.

Limited liability: If you are not doing so already, you should consider operating the website through a limited liability entity, such as a limited company or LLP.

Insurance: If you have professional indemnity insurance (all lawyers should), then check that it covers online advice. If you don't have professional indemnity insurance, arrange a policy that does provide this cover. Insurance coverage, as always, must reflect the relevant level of risk: e.g. medical advice is usually more risky that shopping advice.

Comments

Very interesting article! It is becoming more common for trade publishers to publish online resources for paid-subscribers online, and the legal templates you link to are most valuable.

We are currently developing a project where we (the online publisher) publish guides to HR legal issues and templates written by practicing consultants and lawyers. Emails/phone for the writers are provided and the dislaimer clearly states that all information is that of the author, not the publisher. This will be supported by a legal information dislaimer.

The subscribers to the service pay.

In such a case, where would the publisher stand in cases of bad advice, breach of contract and negligence?

This is one of those situations where the publisher's position could be good, bad or ugly - depending upon the exact circumstances.

Clearly, there are imaginable situations where the publisher could be liable.

Whilst a disclaimer of liability is important, it should form part of a defence-in-depth strategy.

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