Will e-mail send your firm to court?

David Engel, partner, Theodore Goddard

David Price, solicitor, David Price & Co

Steven Blakeley, managing partner, Wilde Sapte

The recent high-profile anti-trust case in the US against Microsoft highlights the potential risks of companies using e-mail. Once a message is sent it is virtually impossible to ensure that no copies survive. Even if an e-mail disappears from the screen, the delete button does not magically erase the information.

Last week the High Court ruled for the first time that an internet service provider is responsible for defamatory material posted on its sites. If lawyers are sending an e-mail or publishing information about clients or colleagues on a company website, they may be exposing their firm to a flurry of defamation actions and protracted law suits. There is also the added problem of employees misusing e-mail, which recently caused a City investment firm to lay off 11 employees.

Should managing partners be taking greater precautions to ensure they are protected against cyber liabilities?

David Engel, partner in media and internet litigation at Theodore Goddard, says: "Cyber liability is a growing area, but the difficulty is that very few cases have come to court in England compared to the US, so the practicality of working out the existing law is complicated.

"There are concerns about facilities for automatic forwarding, copying and inadvertent distribution."

Engel has a rule for the use of e-mail: "If one doesn't mind a document finishing on the pavement then fine, send an e-mail." Otherwise, he says, "encrypt it and attach the same confidentiality that is given to a fax document."

However, Engel does say "firms can ensure that e-mail misuse is kept to a minimum. You can implement policies to educate employees on the risk of e-mail, and management may wish to install a computer usage policy on the private use of e-mail.

"You should have a policy to monitor e-mail because, since there is no law of privacy in the UK, anyone can read the e-mail of other staff.

"The management must be aware that they will be vicariously liable for the misuse of e-mail by employees. They are effectively the publishers and service providers of the e-mail."

David Price, defamation specialist and solicitor advocate at David Price & Co, remembers a famous incident at a City firm a few years ago regarding an internal e-mail about a romantic liaison sent to a colleague. "That e-mail was printed by mistake to everyone in the firm."

Price says: "If one sends round a memo on the e-mail which is defamatory then the person and the firm will be open to a libel case in the ordinary way. The courts can issue a discovery order whereby all e-mail published by the company can be made available for the purposes of court proceedings."

"With electronic publishing there is a permanence - it is stored somewhere in the system. Firms have to be careful because e-mail is a potent way of communicating very quickly: it can do more damage than a telephone."

Steven Blakeley, managing partner at Wilde Sapte, says: "There are valid concerns about the use of e-mail, but there are just as many weaknesses with the use of faxes and stray bits of note paper. If I want to send a message to 35 people, I don't want to have to bother about stuffing envelopes and delivering them by hand."

He adds: "I don't really see how e-mail makes you more likely to defame partners or clients than using anything else. As a manager you have to believe you are employing adults who use the equipment responsibly."

Blakeley says: "On a general basis, I do not think it is appropriate for management to trawl through personal e-mail, just as it isn't appropriate to check on personal telephone calls.

"If there are problems with e-mail, then the chances are it is nothing to do with the technology, it is to do with the people. The manager's problems are with people, not with technology."