Disputing actions on a website: whose courts decide?

In the EU, just using a website, without explicitly agreeing to any terms and conditions, may in some circumstances be enough to bind the user to the operator’s choice of courts to resolve any dispute.

Background

Many websites stipulate terms and conditions of use for
anyone wishing to access and use their content – indeed, it is very much best
practice to have such terms even for non-commercial sites.  It is also best practice to include a clause
designating what law applies to use of the website and which courts will hear any
dispute, since a dispute where the parties first have to fight out what law
should be used to interpret the terms is automatically more complex than one
where at least it is clear it is English, or Swedish, or Chinese law that needs
to be consulted and in which court. 

Room for argument

But unless the website user actually confirms their
agreement to those terms, and so accepts the choice of law, there is still room
for argument as to whether the site’s terms have any legal effect.  Many websites do not require a ‘click to
accept’ unless and until the user actually chooses to buy something, which is
well after they have reviewed a lot of material. And users who do not choose to
buy, but may nonetheless copy material for their own purposes, are unlikely
ever to do anything actively signalling acceptance of the terms.

Despite the belief lingering in some communities, that as a
virtual Wild West the internet is not generally subject to laws, in fact law
nevertheless applies.  Any action that
can be taken on the internet will at some point touch a legal jurisdiction – at
least, until we reach the point where communities based permanently in
international waters exist, as some are said to be planning. 

Brussels I Regulation

It does not follow that the user can be sued in the courts
of the country where the website is hosted. 
It could be argued that the laws of the user’s own country, or the place
where they are at the time of the action, should apply.  Indeed, for users domiciled in the EU, the
Brussels I Regulation stipulates exactly that a defendant must be sued in their
local court – unless there is a rule which permits otherwise. 

Widely known or
observed usage: Irish Supreme Court decision

As reviewed by the Irish Supreme Court recently in two cases
between Ryanair and two travel agencies (Ryanair
Ltd v Blligfluege De; Ryanair Ltd v On The Beach Ltd), Article 23 of the
same Regulation does include such rules. 

Article 23(5) permits a person to agree to be sued in the
courts of any Member State.  That
agreement does not need to exist in the form of a series of written terms; it
can arise from a widely known or observed usage of parties to the type of
agreement concerned.  In other words, if
players in (say) the travel industry routinely form contracts through using
others’ websites which include terms stating that use of the website is subject
to terms and conditions, then that routine practice evidences the agreement of
someone aware of that practice and nevertheless using such a website, to be
bound by those terms. Such “agreement” extends only so far as choice
of courts is concerned.   Different
issues may need to be considered in determining whether there is a binding
contract in force.

Awareness and usage

The court concluded that both travel agencies had in fact
agreed that the courts of the Republic of Ireland should decide any dispute,
despite their strenuous arguments to the contrary.   Central to the decision was the finding that
both travel agents had set up systems to obtain data from Ryanair’s website, a
procedure which would have required “a
close scrutiny of not only the data that needed to be captured … but also the
other aspects of the airlines’ requirements for use of their online material;
whether valid or not.” Further, the online travel industry routinely
used terms which had the objective of binding a site user merely through ‘click
wrapping’ or ‘browse wrapping’. 

As one of the judges appealed had commented “In reality, it is difficult to see how
online trade could be carried on in the absence of those devices“.  As a result, the practice was found to be a
consolidated practice and one of which defendants were aware.  Awareness, combined with continuing to use
the site’s services, indicates agreement.

Implications:
maintaining the commercial viability of the web

Although this decision was made by an Irish court, the pragmatic approach accords well with the Court of Justice of the European Union’s decision on click-wrapping in El Madjoub v CarsOnTheWebDeutschland.de earlier this year. Thus, other senior EU courts are likely to come to the same conclusion. To paraphrase the trial judge above, in reality it is difficult to see what other approach could be taken and still maintain the commercial viability of the Web. With the Digital Single Market initiative in full swing and aimed at further smoothing the course of online trade across borders, any other approach would be perverse.