Website terms and conditions. A lesson to be learnt

Patchett and Patchett -v-Swimming Pool and Allied Trades Associates

I am often asked whether or not website terms are really that necessary. Two schools of thought apply. One is that you are seeking to start a new business and as such solicitors are required. The second is why waste the start up costs-cut and paste from a competitor! It is not unsurprising but I favour the former and never more so now that I have read the recent Appeal case and the Judgment of Lord Clarke the Master of the Rolls. It concerned a mis-statement on a website and underlines that not only having the terms but understanding them is vital. While the website owner was successful at both first instance and on appeal it would have cost significant monies in getting to that point.

The initial decision held that the defendant ‘SPATA’ did not owe the claimants a duty of care in making certain statements on its website. The Appeal court was asked whether SPATA the trade association for swimming goals owed the claimants a duty of care. While each decision must be taken in its own context can such a duty be set out on a website.

In short the Claimants used the SPATA website to choose and instruct a swimming pool installation company. They paid and were badly let down by the installer. The installer went into liquidation. The claimant’s case depended upon the contents of SPATA’s website. SPATA had a drop down menu which listed what it does and that “SPATA pool installer members are fully vetted before being admitted to membership, with checks on their financial record, their experience in the trade and inspections of their work. They are required to comply fully with the SPATA construction standards and code of ethics, and their work is also subject to periodic re-inspections after joining. Only SPATA registered pool and spa installers belong to SPATASHIELD, SPATA’s unique Bond and Warranty Scheme offering customers peace of mind that their installation will be completed fully to SPATA Standards” come what may!

In short it was the usual website trade association blurb. But it was blurb which the Claimants said had led them to spend thousands of pounds with a trader who was in fact insolvent.

The Master of the Rolls had sympathy with the Claimant “The claimant’s case undoubtedly has some force. The judge however rejected it and I have reached the conclusion that he was correct to do so. Before I turn to the essential reasons for the judge’s conclusion, I should note the judge’s conclusion……….that there is a difference, which he described as an important difference, between the statements in fact made on the website and what Mr Patchett says he understood them to mean. It is an important difference. The judge was right to say that the question of duty of care depended on the basis of the statements actually made and the way in which they would be objectively understood. I agree with the judge that SPATA was not saying that its members were at all times creditworthy. No warranty was given. SPATA was saying that before each member joined, checks were carried out on its financial record and on its experience in the trade and there were inspections of its work. It was also saying that its work was subject to periodic re-inspections after joining. It was not saying that Crown would install the claimant’s pool in a sound and competent way simply that its work had been checked in the past and had been up to SPATA standards”.

and further on “The essential reason which the judge gave for holding that SPATA did not owe a duty of care to the claimants was that he held that, while SPATA no doubt knew that the representations on the website would be likely to be acted upon by people like the claimants, it would not expect them to do so without further enquiry. The judge held that the third of the criteria identified by Lord Oliver as arising out of Hedley Byrne v Heller, namely that it is known, either actually or inferentially, that the representation is likely to be acted upon by the advisee “without independent inquiry”, was not satisfied. The principal reason it was not satisfied is that, when the website is read as a whole, it urges independent enquiry.

This is so important when it comes to legal terms. SPATA had the following namely “SPATA supplies an information pack and members lists which give details of suitably qualified and approved installers in the customer’s area. The pack includes a Contract Check List which sets out the questions that the customer should ask a would-be tenderer together with those which must be asked of the appointed installer before work starts and prior to releasing the final payment.” The Appeal Court said “This makes it clear that SPATA supplies, not only members lists, which the claimants obtained from the drop down list on the website, but also an information pack. The purpose of the information pack was to provide relevant information, including a contract check list which set out questions which should be asked of a would-be tenderer and an appointed installer. The judge held that it would be expected that a potential customer would obtain the information pack. I agree.”

SPATA was simply a portal. It was not seeking to hold itself out as an adviser and advisee as the Court held “I find it difficult to classify their contact in terms of a relationship, whether special or otherwise. For the same reason I do not think that there is sufficient proximity between the parties to give rise to a duty of care”.

The Appeal court concluded “In all the circumstances for my part I do not think that it can fairly be held that SPATA assumed a legal responsibility to the claimants for the accuracy of the statements in the website without the further enquiry which the website itself urged. It is common ground that, if the claimants had asked for and obtained an information pack, they would have learned the true facts. They would have learned that Crown was only an affiliate member and that, as such, Crown was not the subject of the checks referred to and its customers would not have the benefit of the SPATASHIELD bond or warranty. In these circumstances there was not a sufficient relationship of proximity between SPATA and the claimants for these purposes and it would not be fair just and reasonable to hold that SPATA owed them a duty to take care. Moreover, it is I think of some relevance that it is not suggested that to hold that SPATA owed a duty of care to the claimants would only be only a small increment or development from existing case law. It would I think be an unwarranted extension of that law, even though nothing I have said is intended to detract from the conclusion that it is important that information put into the public domain is accurate.”

Do special considerations apply to representations on websites? The answer is no “I do not think that the mere fact that the representations were contained on a website supports the conclusion that a duty of care is owed. As ever, all depends on the circumstances. Some websites are interactive and it may be possible, applying the principles outlined above, to conclude in particular circumstances that a duty is owed. However, I agree with the judge that that is not the case here”.

So for these reasons I would advise you instructing solicitors. Not worth the risk.

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