- Internet service provider Demon Internet has settled out of court with a physicist claiming defamation.
Dr Laurence Godfrey had alleged that two anonymous postings on Demon's newsgroups were damaging to his reputation. Repeated requests to the ISP to remove the postings proved unsuccessful.
Dr Godfrey has received £5,000 for the first libel and £10,000 for the second. He will also receive an estimated £230,000 in costs from the service provider.
The case has profound legal implications across the net by becoming the first case to establish in UK law that ISPs are accountable for the information contained on their sites.
It could open the floodgates for a multitude of similar libel actions in Britain, where the libel laws are much more stringent about allegedly defamatory statements on the net than in the US.
Some lawyers have responded to the outcome of the case by arguing that the settlement represented an unacceptable censorship of the internet.
Demon has intimated that it will be pressing the government for recognition that ISPs "should not be liable for the millions of items carried on the internet every day".