Email libel case sparks call for action

Norwich Union to pay #450,000 damages to rival insurer

A LANDMARK legal case on email libel has sparked calls for government action and warnings of more court cases to come.

Last week, Norwich Union made a High Court apology and paid #450,000 damages for spreading defamatory rumours, via email, that stated rival private medical insurance company Western Provident was in financial trouble. This is believed to be the first time a company has received damages for email libel.

The case has prompted networking software company Novell to call on the government to set up a taskforce to consider the legal implications of electronic messaging.

Novell also recently highlighted the growing problems facing email users, such as bullying by email.

Norwich Union, stung by the hefty damages, has vowed changes in the way it uses email. The company said: ?Every effort has been made to ensure such unacceptable practices do not occur again?.

And as email use continues to proliferate, the Norwich Union case could open the floodgates to more libel actions in the future.

According to Hilary Pearson, Bird & Bird?s IT law specialist, last week?s court case is unlikely to be the last.

?Few companies have taken steps to manage the risk arising from widespread email use. Many businesses have formal policies on how employees should communicate with third parties, but these polices have not kept pace with the times.

?It is quite possible for an unauthorised employee to commit his company to a binding contract over the Internet or make libellous statements,? Pearson said.