Angus Kidman on a defamation case with cross-border consequences for internet publishing.

Published in The Bulletin, January 21 2003

In an article in The Guardian last week, lawyer Dan Tench wrote that "it is rare for the UK press to pay attention to a decision made by the Australian Supreme Court". However, a recent appeal in an Australian defamation case has sent shock waves across the internet.

The facts of the case are simple. Melbourne investment identity Joseph Gutnick is suing international business publisher Dow Jones, alleging it published a defamatory article on the web site of its business magazine Barron's. Dow Jones argued that the case should be heard in New Jersey, where its web servers are located, since that represented the place of publication. In December, the High Court upheld an earlier ruling that Victoria was an appropriate jurisdiction for the defamation case, which will go ahead this year.

The immediate battle was largely staged to seek legal advantage. Under Australian law, defamation defendants must prove the truth of their claims, while in the US, the onus is on the allegedly defamed party to prove the claims were false. Yet commentators across the globe concluded that the decision might lead to a rash of global defamation lawsuits and chill the internet's potential for international freedom of speech by requiring publishers to simultaneously consider the defamation laws of numerous countries.

The rush to proclaim the decision a legal disaster ignored many of the unusual features of the case. Gutnick has given an undertaking that he will seek redress only in Victorian courts, somewhat deflating the argument that the decision opens up the potential for internationally "forum shopping" a case to the most sympathetic jurisdiction.

As well, Barron's runs a subscription-only site, so the number of potential viewers in Australia was somewhat more limited than regular web publication (court documents state that only about 1700 of 550,000 subscribers were located in Australia). And even Dow Jones, which argued fervently that publication should be deemed to take place where its servers were located, agrees that this defence might falter if the servers were located in an "opportunistic" location which promoted hosting in a defamation-friendly environment.

All those factors are likely to limit the impact of the decision, as might the outcome of the defamation case proper when it returns to the court. Most observers concede that it's unrealistic to assume that no laws can be crafted to deal with the unique challenges of the internet. As the court noted: "Those who make information accessible by a particular method do so knowing of the reach that their information may have."