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What are your people up to?
Practical e-commerce
The e-com hype seems to have generated mass myopia as businesses charge on oblivious to the risks inherent in the ways electronic communications are used. Common word-processing or e-mail software is very sophisticated, but training is not always adequate and there are some very unsophisticated people - often the most senior! We have all seen management dinosaurs discover a latent, excessive enthusiasm for things electronic!
An e-mail is correspondence that must contain details of registered office and registered number to comply with Companies Act. If not, directors could lose protection from limited liability. In the case of partnerships, it must contain partners' names and the principal address.
Rules on sending/signing letters and faxes and the underlying reasons for rules are ignored for internal and external e-mails. Total informality of content is permitted with little or no restriction on users. Contractual commitments are entered into without any formality or thought for the consequences. In this context, informality breeds carelessness and that will be the downfall of many businesses.
E-mails now commonly play a role in harassment, while defamation in internal e-mails has given rise to at least two high profile cases. In both the content of e-mails from individuals became known externally. This resulted in damages of £450,000 and an out of court settlement of £101,000.
This raises the issue of monitoring employees' e-mail or Internet use. The new Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 under the Regulation of Investigatory Powers Act 2000 set out the circumstances in which communications may be intercepted. Much misinformation has appeared in the press. Prior to the Act, there was no legal prohibition on monitoring employees' communications on the company's systems. Now this is illegal unless permitted by the regulations.
Interceptions are allowed for monitoring or keeping a record of business communications in the interests of national security, or for the purpose of preventing or detecting crime, investigating or detecting unauthorised use, or in order to ensure compliance with business practices or procedures.
The interception must be in connection with a business of the person by or at whose request it is made, the telecom system must be for that business, and the person intercepting must have made all reasonable efforts to inform every person to whom or by whom the communication in question is made that it may be intercepted.
Challenges under the Human Rights Act 1998 have been threatened. The right to privacy of correspondence under that Act could be waived by agreement, but this "must be established in an unequivocal manner" by the use of express words and a clear understanding. The implications would have to be clearly explained. Even if the threat of challenge to the regulations does not materialise, it would be sensible to obtain written agreement to interceptions.
Prior to the Regulations there were a number of high profile cases of mass sackings arising from misuse of the Internet and e-mails. Employers will now have to justify interception in terms of the Regulations. It is important that employees have been warned of the consequences and IT policies should refer to discipline and harassment policies.
The Internet has apparently made the world our market, but what of the legal issues in that market?. What creates an electronic contract? What are its terms? Where is it concluded? What law applies? It may be illegal to offer your product or service or illegal to promote it in a specific way or in a particular country. You must address these issues and remember that your website may be accessed abroad, so if you only want to do business in specific countries, say so.
Some websites will not allow access without accepting standard terms, but if a page beyond that can be bookmarked it would be possible for someone else to visit and place an order without even seeing the standard terms.
Check if your company is insured for e-commerce risks. Ask about such issues as misleading descriptions on websites, cyber vandalism, misuse of electronic signatures, misuse of confidential information, infringement of intellectual property rights, transmission of viruses, libel by employees. You may then wish to reconsider your approach.
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