The UK Internet industry has welcomed a report by the Law Commission examining defamation and the Internet
The report found that there is a "strong case" for reviewing the way that defamation law currently affects ISPs.
The preliminary findings - prompted by the Lord Chancellor in January - suggest that there is a possible conflict between the pressure put on ISPs to remove material and people's right to freedom of expression as embodied under the European Convention of Human Rights.
Several ideas are currently being floated that would protect ISPs and one suggestion is to exempt ISPs from liability, as is the case in the US.
The UK ISP lobby group, ISPA, welcomed today's report and said it would work with the Government to draw up any new legislation. However, ISPA is concerned that the report focuses only on defamation and would like the work extended to include a review into copyright.
Scottish telco THUS, which owns Demon, also welcomed the Law Commission's call for a review of how the defamation law affects the Internet.
In 1999 Demon faced a defamation case which centred on a Usenet article about Laurence Godfrey. Thus's Internet content regulation manager, Mark Gracey, said: "Despite having no editorial control over material hosted on their servers, ISPs are currently being held legally responsible for defamatory, copyright-infringing and other types of content.
"This puts ISPs in the untenable position of acting as judge and jury in cases where complaints have been made, having to balance the rights of the complainant with those of their customer and the risk to their business.
"The law should recognise that it is the author of the material, not its distributor, who is responsible for ensuring the legality of information online."
Last week, an Australian court ruled that entrepreneur, Joseph Gutnick, has the right to have a defamation case against US online publisher Dow Jones heard in an Australian court. Dow Jones argued that any libel case should be heard in the US since that was where the story had been published.
The Australian court's ruling opens the doors for publishers to be subject to the law where material is downloaded, not published.
In the report today, the Law Commission concluded that the issue of jurisdiction and applicable law "has always been complex" and that there are "no easy answers". Any solution would require an "international treaty, accompanied by greater harmonisation of the substantive law of defamation".
"We do not think that the problem can be solved within the short to medium term." ®