The English Court of Appeal has held, by a 2-1 majority, that a trade association was not liable to a user of its website who suffered financial loss through relying on incorrect information on the website. The majority would have found the trade association liable, had the website not invited the user to request a further information pack from which the error on the website would have been apparent. This was held to amount to an opportunity for the user to make an independent inquiry, and that a user could not be expected to rely on the information on the website alone without making such an inquiry. Accordingly, it was held by the majority that the trade association did not owe a duty of care to the claimants.
The claimants, Gary and Karen Patchett, were a husband and wife, while the defendant, Swimming Pool & Allied Trades Association Ltd (SPATA), was a trade association with a membership that includes most of the major swimming pool installers in the UK.
In the summer of 2006 the claimants were looking for a contractor to construct a swimming pool in their garden. Mr Patchett visited SPATA’s website and from a drop-down list of SPATA members obtained the contact details of three contractors, in order to obtain from them direct quotations for the swimming pool construction work. One of the contractors he contacted was Crown Pools Limited. After negotiations, the claimants accepted Crown’s quotation, and work on the swimming pool commenced.
However, by the autumn of 2006, Crown was in serious financial difficulty, and on 20 November 2006 it wrote to the claimants stating that it had ceased trading. The claimants arranged for their swimming pool to be completed by a new contractor, and as a consequence suffered a financial loss of some £44,000.
The claimants’ claim was founded upon certain information which was displayed on a page of SPATA’s website entitled “WHO AND WHAT IS SPATA?”. In addition to the representation that Crown was a SPATA member, the case focused on the following statements:
[Paragraph 1]: “Installing a swimming pool is a specialised task requiring skills and technical expertise in a number of different areas. One way of guaranteeing that the pool installation company has this expertise, is to make sure they are a member of The Swimming Pool and Allied Trades Association (SPATA) before contacting them for a quotation.”
[Paragraph 6]: “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 reinspections 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!”
[Paragraph 8]: “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 claimants’ case was that paragraphs 1 and 6 of the website text contained negligent misstatements by the defendant. Crown was not in fact a full member (only an affiliate member) of SPATA and, the claimants alleged, was not a competent contractor, was not financially sound and did not provide the benefit of “SPATASHIELD” or any SPATA guarantee.
In relation to paragraph 8 of the website text, it was common ground that Mr Patchett did not contact SPATA for an information pack, and indeed had no direct contact with SPATA at all. He did not have any information about the nature or terms of the “SPATASHIELD” scheme beyond that set out at paragraph 6 of the website text, and none of the documents provided by Crown made any mention of SPATA or the SPATASHIELD scheme.
The progress of the claim
The claim was first heard in the Birmingham County Court. In a judgment handed down on 15 December 2008, His Honour Judge Worster held that SPATA did not owe the claimants a duty of care in relation to the statements made on SPATA’s website.
The Court of Appeal Decision
The Court of Appeal upheld the decision of the Birmingham County Court. The majority judgments of Lord Clarke of Stone-cum-Ebony MR and Lord Justice Scott Baker considered in particular the judgment of Lord Oliver in Caparo Industries v Dickman  2 WLR 358. In this judgment, Lord Oliver set out guidance (based on the earlier landmark case of Hedley Byrne v Heller  AC 465) as to when a duty of care may arise when advice is being given. He identified four key principles in this regard:
- the advice is required for a purpose, whether particularly specified or generally described, which is made known, either actually or inferentially, to the adviser at the time when the advice is given;
- the adviser knows, either actually or inferentially, that his advice will be communicated to the advisee, either specifically or as a member of an ascertainable class, in order that it should be used by the advisee for that purpose;
- it is known either actually or inferentially, that the advice so communicated is likely to be acted upon by the advisee for that purpose without independent enquiry; and
- it is so acted on by the advisee to his detriment.
With regard to these principles, the Court of Appeal found that the representations on the SPATA website were made to a limited class of people – those who were considering having a swimming pool installed. As such, the court held that SPATA could reasonably foresee that visitors to its website might rely on its representations in order to choose a swimming pool contractor – indeed, the very purpose of its website was to encourage such people to contract with a SPATA member. It was also clear that the website gave no indication that there was more than one type of SPATA member, and that in fact some members (including Crown) were only affiliate members and thus did not benefit from the SPATASHIELD protection.
However, and as with the County Court judgment, the Court of Appeal held that the third criteria identified by Lord Oliver in Caparo had not been satisfied, finding that SPATA could not have known that the representation would be acted on “without independent inquiry”. This conclusion was reached on the basis that paragraph 8 of the website text encouraged the user to apply for an information pack which listed “…suitably qualified and approved installers in the customer’s area” and which would provide “…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 Court of Appeal agreed with the original judge and held that SPATA could expect potential customers to have regard to all the information that was potentially available from the website, including that in the information pack. It was common ground that had the claimants obtained the information pack, they would have discovered the true nature of Crown’s affiliate SPATA membership and the fact that it did not benefit from the SPATASHIELD protection.
Accordingly, the majority in the Court of Appeal held that there was not a sufficient relationship of proximity between SPATA and the claimants in order to establish that SPATA owed the claimants a duty of care. Both of the majority judgments also emphasised that the legal principles which applied to misrepresentations made on websites were identical to those that applied to misrepresentations made elsewhere in the public domain.
The dissenting view of Lady Justice Smith
In her dissenting judgment, Lady Justice Smith found that there was a sufficient relationship of proximity between SPATA and the claimants in order to establish a duty of care. She reached this conclusion on the basis that the website no more than offered the further information which would be obtained by applying for the information pack. The user did not need the information pack in order to find the contact details of a SPATA member, as demonstrated by Mr Patchett, who contacted Crown without obtaining the information pack. Lady Justice Smith stated that there was nothing in paragraph 8 of the website text which suggested that there was a link between the information pack and the SPATASHIELD scheme, or that it was necessary to obtain the information pack in order to confirm the credentials of a SPATA member listed on the website. Accordingly, she held that it was not reasonable of SPATA to expect that a customer would not rely solely on the representations of the website.
It should also be noted that while it had no bearing on the outcome of the case (since no duty of care was held to be owed by SPATA), both the Master of the Rolls and Lady Justice Smith found that had a duty been owed by SPATA, its liability should be reduced by 75% on account of the claimants’ contributory negligence in failing to make further inquiries about the availability of the SPATASHIELD protection.
This case represents the first UK decision on negligence liability for incorrect information on a website, and the Court of Appeal’s decision raises some interesting issues. While it was held that SPATA did not owe a duty of care to the claimants, the majority reached this conclusion only because the website suggested that a user could apply for further information (which would have revealed the error) and the claimants had failed to do so. Meanwhile, the dissenting judge would have held that there was sufficient proximity between the parties in order to establish a duty of care even in spite of the availability of the further information pack.
The findings in this case may come as something of a surprise to those who operate websites which are broadly similar to that of SPATA, and who might not consider their websites to be providing “advice” which could form the basis of a negligence claim if it later transpires that information on the website is incorrect. This is perhaps particularly true where, as with the present case, there is no contact whatsoever between the user and the website operator beyond the user viewing the website itself.
The case underlines the importance of ensuring that information on a website is correct, comprehensive and is kept up-to-date. It also demonstrates that website operators should consider limiting or excluding their liability if there is any possibility that the website could be considered to be providing advice of a sort that might be relied upon by a website user.