Social Media - potential pitfall

To see the article as it appears in The Baltic, please click here. The article can be found on page 89:

Earlier this year the Football Association fined the Liverpool striker Ryan Babel £10,000 for posting a mocked-up picture on Twitter. The picture was of a well known referee and showed him wearing a Manchester United shirt. The referee had awarded a penalty to Manchester United which produced the winning goal in a game Liverpool lost 1 – 0*.

Although the relevance of this disciplinary matter to shipbroking may not be immediately apparent it is one of a growing number of cases in which the use, or perhaps misuse, of a social media websites has led to legal issues. Last year a UK court awarded an individual GBP 10,000 damages as a result of a defamatory posting on Facebook. In an earlier case a businessman received damages of GBP 22,000 for comments posted on the same site which included allegations that he owed substantial sums of money which he had repeatedly avoided paying by lying, and that he and his company were not to be trusted.

Shipbrokers are often asked for, or simply give, their opinion of people and companies in the market. A large amount of information is passed around the market and some of it, while nothing more than rumour, goes straight to the commercial credibility or even honesty of the subject. A posted comment could lead to a defamation suit.

A defamatory statement can be made about either natural persons, individuals like company directors, or legal persons such as companies. A company has a trading reputation that can be damaged by a defamatory statement.  Examples would be an allegation that party “X” would issue back dated bills of lading “if the price was right” or that party “Y” was the author of an anonymous circular regarding price fixing by competitors.

Companies have to recognise that employees use the internet both inside and outside work and that many employees participate in social networking on websites. Leading law firms have been among the many organisations embarrassed by their employees’ sense of humour or details of their love lives.

The issue for the company may not be limited to embarrassment if an employee makes a defamatory statement. The company will also be vicariously liable for the acts of that employee done in the course of employment, even if performed without the consent or approval of the employer.

The difficulty is that, especially in a business like shipbroking, it not always possible to draw a clear distinction between personal and business use. Increasingly companies are utilising this type of networking site for business purposes. Some like LinkedIn are clearly aimed at professional networking.  A simple ban on their use by employees for work related matters is unlikely to be sustainable.

One thing that is clear is that postings are not private.  In the Babel case the FA Regulatory Commission Chairman commented “Social network sites, like Twitter, must be regarded as being in the public domain and all participants need to be aware, in the same way as if making a public statement in other forms of media, that any comments would be transmitted to a wider audience. It is their responsibility to ensure only appropriate comments are used.”

The ease and apparent informality of posting messages may give rise to a false sense that the message will be subject to less scrutiny than if it was made via another media.  Brokers must however be aware that the possibility of a lawsuit as a result of the use of a social media website is a real one.

The most obvious way of preventing a defamation suit is the application of common sense over the contents of messages. There are two major identifiable types of complaint whatever media is used to make the statement.

 First there have been a number of claims throughout industry based on comments about a competitors’ market standing and integrity. Shipbrokers should take care that neither an over zealous desire to do a deal nor a sense of frustration at not getting one leads to a damages claim.

Secondly claims arising from what the maker intends to be a humorous, albeit disparaging, remark or picture. While the readership of the original posting may be intended to be limited further circulation is impossible to prevent. Even if the original posting is removed screen grabs can still circulate. The intended audience may appreciate the joke but the target may not do so.

*The writer has no allegiance to either of the football clubs mentioned in the article and did not see the challenge in question.

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