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Jeremy Hertzog is a solicitor in the contentious media group at Mishcon de Reya.
More than a year after the issue of libel proceedings, BG (formerly British Gas) last week paid Andrew Duffield and Exoteric Gas Solutions (EGS) the very substantial sum of £101,000 for defamation by email.
Mr Duffield, ex-head of engineering at BG, set up EGS in January 1997 as part of the liberalisation of the gas supply market.
Twelve weeks after EGS began trading, a BG area director sent an internal email. This instructed all 10,000 staff of BG subsidiary Transco that, as a result of a "high level complaint", they were "to have no further dealings with this company (EGS) or with its principal [Andrew Duffield] until further notice".
The 1986 and 1995 Gas Acts stipulate that final connections to the gas mains can be made only by Transco. This meant that EGS could not hope to compete with Transco and could lead to future claims by EGS for breaches of statutory duty and the Competition Act.
Employers today are responsible for the rapid dissemination of information by email. Monitoring simultaneous transmissions (particularly those messages forwarded by all recipients, as in the BG case) is virtually impossible. Consequently, the potential for libel claims is enormous.
The BG case has a wide-ranging message for business email users. It demonstrates the damaging effect of emails' immediacy and capacity for infinite redistribution. The messages are usually industry-specific. In this case it was encouraging anti-competitive behaviour which made it all the more damaging.
Employers relying on email for the efficient running of their business should be aware that internal emails may be protected by the defence of qualified privilege but not if there is malice.
Employers should educate their employees in the use of email. Particular attention must be given (via contractual documentation and staff handbooks) to explain that sensitive emails should not automatically be forwarded through existing mail lists.