Why is this case important?
The Swimming Pool and Allied Trades Association (SPATA) runs a website which has 250 member companies which design, install and equip swimming pools. SPATA offers a ‘member finder’ service to help web users find SPATA members in their local area.
Mr Patchett engaged Crown Pools Limited who he located through the ‘member finder’ service on the SPATA website to build a swimming pool. Crown became insolvent before they completed the construction of the swimming pool and the Patchetts suffered a loss of £44,000. The Patchetts then looked to SPATA in an attempt to recover their losses.
The Patchetts claimed that they had relied on negligent statements on the SPATA website. They argued that the website failed to make it clear that Crown was only an affiliate rather than a full member of SPATA; and as such Crown’s work was not covered by the SPATASHIELD warranty which guaranteed the work of full members.
It fell to the court to decide whether SPATA owed the Patchetts any legal responsibility for the statements made on the website. The court decided that since there was a disclaimer on the website which advised individuals to make further “independent enquiries” before instructing contractors to undertake work, then SPATA was not liable. However, the court held that had the disclaimer not been in place then SPATA would potentially have been liable for the Patchetts’ loss.
How can website owners protect themselves?
The decision by the Court of Appeal should not be seen as an endorsement of disclaimers on websites but rather as a clear message that information on commercial websites should always be accurate and up to date. It is worth noting that whilst SPATA may not have been found liable in this instance, the cost to SPATA was nonetheless enormous in terms of time, adverse publicity and legal cost.
This case emphasises the fact that website law is continually developing. As a result, website owners would be well advised to take the following steps to minimise their exposure to legal liability;
- Website owners should consider if disclaimers are necessary on their website. Any disclaimers used must be prominently displayed and clearly visible on the same webpage as the advice given;
- great care should be taken to draw the attention of customers to any disclaimers on the website. It is clear from the SPATA case that the courts would not look favourably on disclaimers which were buried in the small print of a website’s terms and conditions;
- website owners, particularly trade associations, should be wary of the representations they make on their websites for third party or associated companies. They should carefully check that any claims they make are accurate and relevant. Website owners should also bear in mind the fact that, as in the case of SPATA, they may be liable if the third party then becomes insolvent; and
- in the current economic climate where both businesses and individuals are under increasing financial pressure, website owners should take particular care to examine disclaimers for contractual weaknesses. Website owners should seek regular legal advice on their website’s terms and conditions and ensure that any disclaimers are reasonable and comply with the relevant consumer legislation, such as the Unfair Contracts Act 1977 and Unfair Terms in Consumer Contracts Regulations 1999.
If you have any questions arising from this article Alex Weston is a specialist intellectual property and IT law solicitor and can be contacted on 01904 683060 or by email on alex.weston@langleys.com.
This document is not intended to constitute legal advice. Such advice can only be given if we are instructed to consider a particular set of matter specific facts. No duty of care is assumed to any person and no liability is accepted in respect of the contents of this document.