Liability Briefing on e-Business

SETTING UP A WEBSITE

Why use the WWW?
Domain names
What are the main legal requirements regarding the contents of a website?
What terms should I agree with the website designer?
What is a hosting agreement?
What regulations govern the eCommerce uses of a website?
What are meta tags?
Security

Why use the WWW?

There are a number of reasons why businesses have a presence on the World Wide Web (www). Deciding on what type of presence, what the site is to say and do, who it should be aimed at and a whole range of other factors should form part of a carefully thought out strategy. There are typically four types of website that consultants operating in the construction industry may have:

Electronic brochure Displays information, eg about the consultant’s practice, just as a printed brochure would. Used for marketing the consultant’s services. Requires a visitor to access it directly (by using the site’s URL or by clicking on a link, eg on another site or contained in an email), or to find it via an Internet search engine.

An accessible resource Contains materials, data, information accessible for free.

Interactive Permits visitors to use applications for free (eg search engines, calculators, etc).

E-commerce Enables the sale of products, software applications, (eg available for use on the site or by downloading), access to data or technical information directly through the site on a commercial basis. Visitors pay online or separately, (eg by subscription or billed on the basis of usage).

Generally, the more ambitious the aims of the site, the more legal issues arise:

Domain names

Every website must have a domain name or URL. A domain name is a user friendly name for an Internet address. For example, www.microsoft.com; www.beale-law.com; www.adjudicate.it. Most domain names are registered on a first come first served basis, but domain names can also be bought and sold.

Domain name selection follows that for business names. Generally, do not choose a name that is the same as or similar to an existing business name. You need to avoid confusion and the risk of passing off and of infringing someone else’s trade mark or copyright. If someone else has already registered a domain name in a way that causes confusion with your existing business name, (a practice known as “cybersquatting”), this can be challenged via a simple form of arbitration. In serious cases, court proceedings may be necessary to protect your interest. The goodwill associated with a trade name can be very valuable and infringements very damaging. Even businesses with existing sites should periodically check the Internet for such misuse.

Having secured a name, it is worthwhile and relatively inexpensive to register a number of variants to that name. Check by search that the registration agent you use has correctly registered you as the owner. Note that registration needs to be managed and renewal fees paid, otherwise a registration can lapse and the domain re-registered by someone else.

What are the main legal requirements regarding the contents of a website?

This guidance assumes the law for England and Wales applies. Because websites are accessible from anywhere in the world, local law may apply, particularly if the website is used for e-commerce purposes.

Privacy policy Most companies providing the hosting of websites can provide data, albeit in fairly basic form, as to the numbers of visitors. When this data is collated, data protection issues arise. These websites should include a policy statement about what data will be collated from a visitor and for what purpose this data will be used. The content of these privacy policies follow fairly standard forms. Examples can be freely viewed on most websites.

Data protection Where the website collects more detailed data, (eg because a visitor is required to register their details or complete an online form) care needs to be taken over the use of this data. Collating, holding, using and disclosing personal data raises data protection issues covered by the Data Protection Act 1998 (“the DPA”). Acting in breach of the Act may give rise to criminal sanctions as well as claims for damages. Click here to view more information about the DPA.

Advertising restrictions Again websites which advertise services/products are accessible from any jurisdiction and local legislation may apply. It may also apply to any advertisements by third parties displayed on the website and to any links provided to third party sites. Websites aimed at consumers must not contain false or misleading price details or business/product descriptions as this may infringe consumer legislation (such as the Consumer Protection Act and Trade Descriptions Act 1968). This could also give rise to disastrous financial consequences for businesses where the incorrect price was stated. Put in place a system to have the site carefully checked on a regular basis. Consultants should also check any professional constraints on advertising their services against the terms of membership of both UK and international associations and institutions.

Confidential information Consultants should be careful not to disclose by publication on their site information which is confidential to others, eg clients. This can be done innocently by describing a project on which the consultant has been involved in order to demonstrate expertise. The client’s consent may have to be obtained first, just as you would prior to publication in a traditionally published technical paper. A great deal of potential content on the Internet is freely available and often reproduced without consent. One view is that any information posted on sites is in the public domain. However, it is not correct to assume that content found on the Internet can be freely reproduced. Internal guidance should be issued to those responsible for adding content to the website. Equally, if copyright in your own original content is yours, a copyright notice, eg “©”, should be included on the site to warn visitors not to reproduce it (although this is not a requirement under English law). Click here for more information about Intellectual Property Rights.

Sites that permit others to post content on their sites are potentially at risk. By providing the site, the site owner and operator are giving the means of publication of such potentially infringing content, and this can make them liable in law. Other risks of defamation arise from such sites. There is specific law relating to this which is not covered in this guidance, as such sites are not thought to be commonly used yet by consultants.

Liability for inaccurate content Apart from reflecting badly on a firm, inaccurate content exposes the firm to a risk of liability if information provided on the site is relied on and causes loss. Note that free advice provided on a website can still give rise to liability. As such, consider adding appropriately worded disclaimers. These may need to apply to both the site’s content and to the content of other sites to which a link has been provided.

Terms and conditions of use Include in any brochure site and information resource site the copyright notice, disclaimer and privacy policy statement referred to above. Where the site is used for additional purposes, require the visitor to agree additional terms of use, even where a commercial transaction is not concluded online. Note that any terms applicable must be brought to the attention of the visitor and accepted by the visitor, and the visitor’s acceptance should be either recorded or the visitor’s future use of the site prevented.

What terms should I agree with the website designer?

A large number of design agencies exist who can produce a highly polished professional looking and well-designed site. With the use of proprietary website development applications it is also possible to design your own website. Some sites can be created online with an Application Service Provider (ASP). (These are normally hosted on the ASP domain though, which may make it difficult to move.) ASPs will also host the website.

When instructing a designer to design your site, always have a written agreement. Here are some key points to include:

• Ensure you know who you are instructing. Is it a company or an individual who is going to do the work? Will they outsource it or use their own staff? Ask for references and previous examples of work.
• Draw up a specification for the site. Essential if you agree a fixed price. How many pages, links, content and graphics should be included? What software does it use?
• Approve the design of the home page, the “look and feel”, and get assurances that it does not copy another site or that the use of all third party material is properly licensed.
• Ensure that the ownership of Intellectual Property Rights (“IPRs”) vests in you and that any specially written software is assigned to you. The designer may need to keep some elements of the source code used but you will want to be able to display the site without being tied to that designer. Copyright subsists in the computer software added as content to websites including any databases programmes that are used. Unless your agreement states otherwise, the copyright in the software held as part of the site and the website content will be owned by the creator, ie. the developer or designer and not necessarily by the person who pays for the site.
• Where the site includes third party software, you must ensure that you have the necessary licences to run that software on your site. Ensure all licences for software incorporated into the site have been obtained and get copies of the licences.
• Agree “milestones” against which interim payments are made where work is likely to be long term.
• Agree the terms of hosting the site separately. This could be done by someone other than the original designer.
• Consider how you are going to update the site. Who controls this? If your own staff, can they do it technically?
• Ensure that your designer is aware of the impact of the Disability Discrimination Act on the design and operation of the site. (This Act creates certain technical requirements for sites so as to enable them to be used by a disabled person).

What is a hosting agreement?

Once the site has been designed and includes the content you want to publish, it then needs to be hosted on a server connected to the Internet. A written agreement should be put in place between your firm and the hosting company. The hosting agreement will need to cover the following key issues:

• What service terms are specified?
• What is the permitted down-time?
• What is the notice for terminating the agreement?
• Existing service provider to co-operate on change of hosting company
• What additional services are offered, ie statistics, data collation, etc.?
• Maintenance
• Technical queries: who is to deal with these?
• What level of security/firewalls/virus protection is offered?
• What backups and business contingency plans are in place?