Demon does U-turn in Godfrey case

In a dramatic U-turn from its position Friday U.K. ISP Demon Internet will not appeal in its defamation case against Laurence Godfrey. The move has left the ISP community with an historic and potentially dangerous legal precedent.

Mr Justice Morland's ruling, that Demon's defence of innocent distribution was untenable because it was aware of an alleged defamatory posting and failed to remove it, has left the Internet community reeling. Never tested before, Morland's ruling exposed the Amendment of the 1996 Defamation Act -- designed to protect online publishers -- as insufficient. Innocent distribution, Morland found, was no excuse if the ISP had been informed about defamatory messages.

ISPA and Demon publicly stated their opposition to the ruling and claimed it threatened the freedom of the Net and the future of e-commerce. Demon vowed to appeal the ruling on behalf of the whole ISP community. It has now abandoned that position.

Director of Demon David Furniss insisted Friday the appeal was not dead. "An appeal is still an option to us and we are considering it," he told ZDNet News. Despite legal experts claiming a late appeal was unlikely to be accepted, Furniss said the ISP had been "assured by solicitors" a late appeal was a viable option. In a press statement, released later that day, the appeal was quietly dropped.

Confusion over the status of the appeal are compounded by confusion over what constitutes a precedent. Furniss claimed Friday the unchallenged ruling does not set a precedent -- a view not shared by legal experts. Robin Bynoe, partner with law firm Charles Russell and Tony Willoughby of Willoughby and partners agree the ruling sets a legal precedent. The effects of the ruling are "potentially extraordinary" said Bynoe.

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