Settlement for Demon case clouds libel law.(Internet/Web/Online Service Information)

COMPANIES are facing a major fall-out from last week's settlement of the Demon Internet case, which saw an academic win out-of-court damages against the Internet service provider (ISP).

Because the case was not settled in court, the issue over whether an ISP can defame a person or organisation through publishing material on the Net was not established. Nor was it established that Demon fell down by not acting quickly enough to delete the alleged libel on physicist Laurence Godfrey.

Lawyers said this uncertainty may affect the continuity and safety of corporate Web sites. Nick Arnold, IT litigator at Tarlo Lyons, said, "The waters are just as cloudy for the…