Defamation in Canadian Cyberspace

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Liability : ISP Liability, Caselaw, Results in Canada...

Basis of Liability for Cyberlibel in Canada

While the individual can be held liable for defamatory materials on the Internet, by analogy so can the ISP. In determining whether there is a basis for liability, one of the most important issues in cyberlibel is whether the ISP, the operators of bulletin boards or the website owners are common carriers, distributors or publishers. The distinctions have significant liability ramifications. Common carriers, such as telephone companies, have virtually no liability in libel as they are required to carry all messages and often their rates are regulated by governmental authorities. Similarly, distributors, such as booksellers, news vendors and libraries, do not have any libel liability, unless they have been negligent. Publishers, such as newspapers, magazines and broadcasters; however, are responsible and liable for everything that they produce, post and broadcast. Their liability is grounded in the fact that they can edit what they wish to include and exclude from their publication.(34) As we shall see, the case law is pushing ISP's into the publisher category.

ISP Services Resulting in Liability

The role of the ISP is to provide access to the Internet for its clients. This includes allowing users not only to access the Internet but to send and receive e-mail, read and write to Usenet newsgroups, and host personal web pages of a few megabytes in size. ISP's also support their own newsgroups which are generally not part of the general Usenet and thus are only accessible by their own paid subscribers. Most ISP's categorize their newsgroups by topic and within each topic are more specific sub-topics. Hence they act as intermediaries between the subscriber and the defamatory material. As we have discussed the Internet presents many jurisdictional problems. These serve to glorify the problems faced by the ISP's. As noted by Perritt, the inability to answer jurisdictional questions satisfactorily increases the pressure to hold intermediaries liable, because unsatisfactory answers make legal recovery from content originators less likely. He further argues that the Internet's anonymity worsens the position of intermediaries. If the victim cannot identify the originator, immunizing an intermediary leaves a faultless victim bearing the loss.(35) In a speech given at Queen's University, Sopinka J. stated that anonymity will increase the likelihood of holding online service providers liable: "Where the defamatory message is posted by an anonymous user, a court may be reluctant to excuse the service provider and leave the injured party empty handed."(36)

As noted by Iris Ferosie, Usenet's create similar liability issues for ISP's which are shared by newspapers and radio stations except now on a broader spectrum. First, unlike newspapers and radio broadcasters, ISP's receive and "publish" thousands of postings per day. Secondly, postings are often not purged off of the system and can remain for an extended period of time.(37)The business of an online service provider is such that the provider rarely has knowledge of defamatory content before the matter is brought to its attention via complaint. Failure to review all content should not be viewed as negligent, but rather as an exigency of the volume of information being transmitted through the provider:

Anyone who has stood in the middle of a room full of electronic boxes and listened to the hum of traffic can tell you that there is little point in making the ISP liable for stored information. (38)

It can be argued then that ISP's have little control over the material they are "publishing." While software such as Cybersitter on NetNanny does exist to locate and block access to material of an offensive or pornographic nature, they are of little use in relation to defamation where there are no specific words or images which can be predicted to attract legal risk.(39) This adds up to a liability time-bomb for Isp, which could substantially affect their ability to operate commercially, unless defence mechanisms are made available to them. The arguments are then put forth under the distinctions listed above regarding the status of the ISP as merely a common carrier rather than a distributor and whether they should have the benefit of the innocent dissemination defence. Two U.S. cases have looked at this situation.

Precedential United States and United Kingdom Case Law

Two widely discussed U.S. cases have failed to settle the issues of ISP liability as they have resulted in contradictory verdicts. In Cubby, Inc. v. CompuServe Inc. 776 F.Supp. 135 (S.D.N.Y. 1991), CompuServe was sued in response to a message appearing in one of their locally hosted forums called "Rumorville USA." CompuServe had employed a third party specifically to edit and control the forum's content. The third party posted the information once it was edited, with no opportunity for CompuServe to review the material prior to publication. CompuServe thus argued that they were merely a distributor of the information, not a publisher, and should; therefore, not be held liable. The New York court held that CompuServe had, by contract, divested itself of control over postings by users. The court classified CompuServe as a distributor, finding that CompuServe was the functional equivalent of a lending library.

However, in Stratton Oakmount v. Prodigy, 23 Med. L.R. 1794 (S.C., Nassau County 1995), the decision went in the opposite direction. On similar facts, a libel action by Stratton Oakmount, arose after an anonymous user posted three defamatory messages on Prodigy's "Money Talk" BBS in October of 1994. The user (who still remains unknown) did not have authorization to access the system, the user gained access by acquiring a former Prodigy employee's identification number. As noted by Potts and Harris, in a motion for summary judgment brought by the plaintiff, the court found that Prodigy was a "publisher" for the following reasons:

  • Prodigy had held itself out as being a "family oriented" computer network and exercised editorial control over the content of its editorial boards in order to make itself more appealing to certain markets
  • Prodigy had posted "content guidelines" to its users regarding what Prodigy regarded as proper and appropriate for posting on it's bulletin boards.
  • Prodigy used a software screening program which picked up offensive language.
  • Prodigy also retained "board leaders" to enforce the guidelines.
  • Prodigy employed technological means to delete postings that violated the guidelines.(40)

This was enough for the court to regard Prodigy as the publisher of the libel and grant a partial summary judgement. However, on October 24, 1995, Stratton Oakmount announced that it was dropping its US$ 200 million libel lawsuit against Prodigy Online Service. Prodigy had assembled new evidence to show that, since 1992, it had used a computerized keyword search solely to weed out messages containing obscene language, but had not scanned messages for defamatory speech. This evidence, coupled with an apology from Prodigy, was enough to convince Stratton Oakmount to drop the case.(41) Unfortunately, for our analysis, the court did not adopt a standard of liability applicable to ISP's as the suit was settled; however, the decision was never overturned..

The two cases have one poignant distinction: if the ISP chooses to edit or censor its newsgroups, it makes itself a primary publisher, and if the ISP does not edit the Usenet it is a secondary publisher. As labelled by Edwards, such a "head in the sand" approach is an extremely unhelpful message for improvement of Internet services, whereas any user will know, one of the key problems for commercial use is the volume of unedited, disorganised, misleading and often offensive text that must be worked through to reach any useful information.(42)

Recently in Lunney v. Prodigy Services [1998] WL 999836 (NYAD 2 Dept), the New York Court of Appeal threw out a lawsuit against Prodigy regarding forged email and bulletin board postings. The court ruled that the online service could not be held liable for its users' actions. Alexander Lunney, the son of a former New York prosecutor, sued Prodigy in 1994 when an unknown person sent electronic messages using his signature. The plaintiff argued that Prodigy should pay punitive and compensatory damages. Under the common carrier versus publisher distinction the court cited earlier cases involving telegraph and telephone companies and ruled that online services carry the same common-law privileges. The court stated that, "Email is, in substance, nothing but an updated version of the telegraph."(43) Marc Jacobson, Prodigy's senior vice president, said the decision means the service cannot be held responsible for posted messages . He further called it a victory for freedom of expression and stated that the ruling demonstrated that the 1995 decision, "was totally wrong."(44) The United Kingdom courts; however, have come to a different conclusion.

In the recent decision of Godfrey v Demon Internet Ltd. (Britain's largest Internet service provider), a British judge potentially curbed online freedom of speech in Europe by holding an ISP liable for postings on its message board. The London High Court judge ruled that Demon Internet cannot claim to bear no responsibility for an allegedly libelous newsgroup posting on its server. Physicist Laurence Godfrey (45) filed a suit in response to a message posted in 1997 to the newsgroup soc.culture.thai. The message, which appeared to be from Godfrey, was actually a forgery. Similar to previously mentioned cases the anonymous originator of the message was not a Demon Internet customer. Godfrey claimed the message contained damaging allegations of a personal nature and thus sued Demon Internet for defamation. He further argued that Demon could not rely on the "innocent dissemination" defense because the ISP had been informed three times of the offending message and refused to delete it from the newsgroup. He thus claimed damages for libel in respect of the posting after the seventeenth of January 1997 when the Defendants had knowledge it was defamatory. (46)

Daniel Lloyd, legal adviser to the British campaign group Internet Freedom, called Godfrey's suit against Demon, "a worrying incursion on free speech…an ISP is no different than a newsstand or a newspaper…If Demon loses the case, it will place an impossible burden on all Isp to monitor the content of Internet material."(47)

In his decision, Justice Morland downplayed the significance of the U.S. caselaw raised by the Defence due to legislative differences:

"The impact of the First Amendment has resulted in a substantial divergence of approach between American and English defamation law. For example in innocent dissemination cases in English law the Defendant publisher has to establish his innocence whereas in American law the Plaintiff who has been libelled has to prove that the publisher was not innocent."(48)

Also in regards to the availability of the innocent dissemination defence Justice Morland referred to the Consultation Document where it was stated that:

"2.4 The defence of innocent dissemination has never provided an absolute immunity for distributors, however mechanical their contribution. It does not protect those who knew that the material they were handling was defamatory, or who ought to have known of its nature."(49)

Justice Morland also commented on the categorization of an ISP as either a distributor or publisher:

"In my judgement, the Defendants, whenever they transmit and whenever there is transmitted from the storage of their news server a defamatory posting, publish that posting to any subscriber to their ISP who accesses the newsgroup containing that posting. Thus every time one of the Defendants’ customers accesses "soc.culture.thai" and sees that posting defamatory of the Plaintiff there is a publication to that customer… In my judgement at English Common Law Prodigy would clearly have been the publisher of the practical joker’s message and therefore Lunney does not assist the Defendants."(50)

The judge then stripped Demon Internet of the "innocent dissemination" defense under Great Britain's 1996 Defamation Act:

"…as from the 17th January 1997 they knew of the defamatory content of the posting, they cannot avail themselves of the protection provided by Section 1 of the Defamation Act 1996 and their defence under Section 1 is in law hopeless. Therefore the Plaintiff’s summons to strike-out succeeds."(51)

The judge; however, accepted an appeal request from Demon Internet immediately following the decision.(52)

Results in Canada

There are currently numerous Canadian libel lawsuits still in their initial stages, over allegedly defamatory publications in the mediums such as e-mail, websites and image and text postings to USENET newsgroups with defendants ranging from individuals, associations, corporations and political parties.(53) What then are and what will be the rules and results in Canada? The general rule for republication under Canadian law is that, "every repetition of a defamatory statement is a new publication, for which a separate cause of action will lie.(54) This means that republishers cannot claim a defence in the fact that they did not originate the material; nor in the fact that they published the material believing it to be true.(55) There is no liability under Canadian law for individuals who, "act as a mere conduit for the dissemination of defamatory information."(56) Thus, individuals have the defence that they were playing a "subordinate role" in disseminating defamatory material.(57) As we have noted, such subordinate players include, "vendors of books, magazines, and newspapers, or carriers, and librarians."(58) As such they may argue that they were not "publishers" of the material, but rather that they were "innocent disseminators". The existing law of innocent dissemination is based on the English decision of (as discussed under Defences) Vitzelly v. Mudies Select Library Ltd.[1900] 2 Q.B. 170 at 180 and is nearly one hundred years old. This case was adopted into Canadian jurisprudence when it was quoted with approval in Newton v. Vancouver (1932) 46 B.C.R. 67 at 75, which held that:

The defendant in the defence of innocent dissemination will succeed if the defendant shows:
i) That he was innocent of any knowledge of the libel contained in the work disseminated by him;
ii) There was nothing in the work or the circumstances under which it came to him or was disseminated by him that ought to have led him to suppose that it contained a libel;
iii) That when the work was disseminated by him it was not by any negligence on his part that he did not know that it contained the libel, then, although the dissemination of the work by him was prima facie a publication of it, he may nevertheless, on proof of the before mentioned facts, be held not to have published it.

The Canadian test, therefore, to determine: whether the distributor had knowledge or was negligent in failing to ascertain that the disseminated material contained defamation.(59) A ruling in Canada on ISP liability then would likely follow the Demon case. As noted by Randy Pepper, a lawyer with the Toronto-based firm Osler, Hoskin and Harcourt, "What this does is, in my view, demonstrate exactly how a court in Canada is likely to approach this issue."(60) When combining the U.S. and U.K. case law with the existing Canadian jurisprudence on innocent dissemination, the ISP is placed in an awkward position. As noted by Potts and Harris, if a Canadian ISP exercises responsibility and attempts to regulate content, it may then become a publisher and vulnerable to a libel suit. And, if they do nothing as an alternative, they could then be sued in negligence for failing to maintain security, or for negligent misstatement.(61) As noted by Takach, in order for the defendant to successfully argue innocent dissemination in Canada, the ISP must show that it did not have knowledge of the libel and that there were no conditions that would have lead it to suspect libel and the entity was no negligent in failing to know about the libel.(62)

The first large Canadian damage award for defamation with an Internet component occurred in the April 15, 1998 judgment of the British Columbia Supreme Court in Baines v. Chelekis, where the verdict included CDN$250,000 in general damages for publication in an electronic magazine called Market News. The magazine was widely disseminated in an electronic environment. Furthermore, the court ordered the defendant to pay aggravated damages of CDN$100,000g for what was called a, "campaign of vilification" which was designed to, "reach a world wide audience." The Court further ordered the defendant to pay CDN$150,000 in punitive damages for his, "intention to inflict... the maximum damage he could." As mentioned earlier, this case would propagate the notion that Internet-related awards can be substantial.(63)

The issue of ISP liability has also arisen in Canada. For example, where the original authors may be judgment proof, the plaintiff could seek a remedy from an intermediary. For example, in Fantino v. Baptista, an Ontario policeman obtained a modest default judgment for CDN$40,000 for damages in respect to some defamatory electronic messages. The defendant, who claimed he had no assets and could afford to ignore the judgment, reportedly told a newspaper reporter he was an "Internet god" who was engaged in a war against the government. This type of defendant may lead plaintiffs to sue "deep pocket" defendants such as large ISP’s. (64)

The lack of precedents and the relatively strict nature of defamation law can lead to the conclusion that there are real possibilities that many actors in Internet communications will be called upon to answer for defamatory statements. It could be considered that at the present state of development of the law, computer network owners and operators could be held responsible for defamatory materials, whether they write them themselves or publish them after having received them from third parties. Thus, a company could be obliged to assume liability for statements found on its electronic sites. As bountiful awards may become the norm and precedential foreign caselaw continues to expand, what protections are available for Canadian ISP's in avoiding liability? This is discussed in the next and final section.

34.Potts and Harris, supra note 3.
35. H.H. Perritt, Jr., "Jurisdiction in Cyberspace: the Role of Intermediaries" (Address to Kennedy School of Government, Harvard University, 28 January 1996), available at
36. Sopinka J.,"Freedom of Speech and Privacy in the Information Age" (Address to Queen's University, Faculty of Law, 21 November 1996), available at
37. Iris Ferosie, "Don't Shoot the Messenger: Protecting Free Speech on Editorially Controlled Bulletin Board Services by applying Sullivan Malice," (1996)The John Marshall Journal of Computer & Information Law, XIV, Number 2, Winter, 347 at p.350
38. T. Denton, "Speech Notes for an Address to the Canadian Bar Association (Ontario): The Liabilities of Internet Service Providers - and what we plan to do about them" (7 November 1996), available at
39. Edwards, supra note 9.
40. Potts and Harris, supra note 3.
41. Potts and Harris, supra note 3.
42. Edwards, supra note 9.
43. Chris Stamper, "Prodigy Prevails in Libel Suit",, (11:55 a.m. 5.Jan.99.PST) available at
44. Stamper, supra note 43. Available at
45. For more information on Mr. Godfey's crusade see James Glave, "Sweeping UK Net Libel Decision,", (12:00 p.m. 26.Mar.99.PST) available at
46. Godfrey v. Demon Internet Limited, available at
47. Alan Docherty, "ISPs May Bear Content Liability," (9:30 a.m. 17.Feb.99.PST) available at
48. Godfrey v. Demon Internet Limited, available at
49. Godfrey v. Demon Internet Limited, available at
50. Godfrey v. Demon Internet Limited, available at
51. Godfrey v. Demon Internet Limited, available at
52. James Glave, "Sweeping UK Net Libel Decision,", (12:00 p.m. 26.Mar.99.PST) available at
53. Ladner Downs Free Speech Bulletin. February 1999, available at http://www.ladner
54. R. Brown, The Law of Defamation in Canada, vol. 1, 2d ed. (Scarborough: Carswell, 1994) para. 7.7
55. Brown, supra note 43.
56. Brown, supra note 43 at para. 7.12(6).
57. Brown, supra note 43 at para. 7.12(6).
58. Brown, supra note 43 at para. 7.12(6).
59. Brown, supra note 43 at para. 7.12(6).
60. David Akin, "British Internet judgment ripples across Atlantic: 'Dangerous precedent': ISP held responsible for potentially libelous message," Financial Post, (March 30, 1999) available at
61. Potts and Harris, supra note 3.
62. Takach, supra note 2 at 389.
63. Ladner Downs Free Speech Bulletin. February 1999, available at http://www.ladner
64. Ladner Downs Free Speech Bulletin. February 1999, available at http://www.ladner

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Introduction - Defamation - Defences - Cyberlibel - Liability - Conclusion - Reference