How to save thousands of pounds with a website disclaimer

They are seen as standard legal jargon that any website should have. But until recently, it was uncertain whether they could protect you. Now, a Court of Appeal ruling has made the position clear. Having properly worded legal disclaimers on your website could save you a small fortune.

In the recent Court of Appeal case, a trade association for swimming pool installers, SPATA, sought to give comfort through its website for the quality and financial stability of its members. One couple contracted with someone listed as a member on the website to build their swimming pool, but they ended up losing about £50,000 when the installer went bust and couldn’t complete the job.

They looked to recover their loss from SPATA. SPATA claimed that the installer in question was actually not a full member and its guarantee therefore did not apply. The couple argued that that had not been clear from the website. However, SPATA responded that the website should only have been used as a starting point in the process of finding an installer and the website told users to obtain an information pack; if the couple had done so, the installer’s status would have been clear. The court ruled that whether SPATA would have been liable for the users’ loss depended on whether its website had reasonably envisaged that users should make further investigations, including looking at its information pack. In the circumstances, based on what was on the website, the court ruled that’s what a user should have done.

This case shows that some websites may be liable for decisions taken based on information provided on them, for example if they may have recommended someone else’s products or services. However, clear and prominent disclaimers on the website can minimise that risk. For example, there could be a disclaimer saying that the website does not invite users to act on the contents of the site without further enquiry.

Having properly drafted legal disclaimers on websites doesn’t have to cost much but may well save tens of thousands of pounds later.

By Paul Gershlick

© Matthew Arnold & Baldwin 2009

Paul Gershlick is a Principal in the Commercial, IP and IT team at Matthew Arnold & Baldwin LLP, working in their London, Milton Keynes and Watford offices. He is editor of the IP/IT/e-commerce legal and market news update site, www.upload-it.com.