Living with legal risks

Submitted by
Alasdair Taylor
9th March 2008

“Please do whatever necessary to make sure I don’t get sued or fined!”

Clients sometimes assume that the instruction of a legal adviser amounts to an insurance policy against legal risk. But whilst proper legal advise should reduce a business’s legal risks, it will not eliminate them.

There are, I think, five main reasons why web-based businesses must live with legal risks.

  • First, the law changes all the time. This is especially true of “internet law”. Sometimes these changes can be easily anticipated, but sometimes not.
  • Second, good websites are regularly updated; and few web publishers take legal advice on everything they publish.
  • Third, user-generated content can give rise to liabilities which may be beyond the control of the web publisher.
  • Fourth, the law is often much more uncertain than we would like. For example, the special defences under the E-commerce Regulations, which from a risk management perspective may be considered crucial to the operation of many websites, are of uncertain scope.
  • Fifth, legal advisers sometimes get things wrong. Whilst you may well be able to sue a negligent legal adviser, that is not the same things as an insurance policy!

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