Dialogue: You take your cyber-chances

By DAVID GODDARD*

On the internet, borders seem largely irrelevant. The ability of users to access information and services anywhere, and for businesses to reach worldwide markets, is one of its key attractions.

Except when Yahoo! is injuncted by a French court, few of us give much thought to questions like, "When I use the net, which country's law decides whether I have a remedy if the software I download doesn't work or contains a virus?" and "Can I get that remedy at home in NZ?"

Or, for a business: "Which laws must our advertising comply with?" and "Where might claims, justified or unjustified, be made against us?"

For the small New Zealand business, the answer is that a bewildering array of laws will, on their face, apply to online activities.

The consumer protection laws of every country in which the business has regular customers are likely to be applied by that country's courts. Not to mention laws on copyright, privacy, obscenity and language (Are you selling to Quebec? Is key information in French?).

Any attempt by a local business to find out which laws apply, and to comply with them all, would be prohibitively expensive, if not impossible. Only the largest companies can even think of trying.

For others, the options include finding out what is required in major target countries and complying, taking a punt on no problems arising in practice, specifying on the site which law applies and where claims must be brought (this will work for some purposes but not others), or limiting (so far as possible) the countries with which the business will deal.

Yet here's the paradox - the net offers few remedies for consumers.

While the business encounters a legal babel, the Aucklander whose hard drive was reformatted by virus-ridden software may look about in vain for a practical remedy.

Does the Consumer Guarantees Act apply? Possibly, but this is not very clear. The Fair Trading Act? Probably not, but again, this is far from clear. Can a claim be brought in the Disputes Tribunal? Probably not, but a claim in the district court or High Court is possible.

Assuming the cost is justified, you might file proceedings and arrange to serve the claim on the overseas supplier. (This won't be easy. E-mail service won't be legally effective. The site may not give the correct name and address of the supplier, making personal service difficult.)

But let's say we can get over these hurdles. The supplier does nothing and judgment is entered by default.

You've won - or have you? The supplier probably has no presence in New Zealand and, with a very few exceptions, this judgment will not be enforced overseas.

What else could you do? Complain to the Commerce Commission? There is not much it can do if the supplier is overseas.

Sue the supplier in its home jurisdiction? Possible, but expensive.

For internet users, a few lessons are clear. There are extra risks when dealing with overseas suppliers - borders are not irrelevant.

Legal proceedings are less likely to be an option when suppliers are overseas so a site's reputation for customer treatment is critical. Trustmarks and other dispute resolution programmes are often more important than legal rights.

For businesses, the lesson is that legal risk overseas may be less than it seems on paper and winning business overseas means building customer trust and confidence, which depends on clear commitments to address complaints.

For the Government, the lesson is that action is needed to reduce the risk and uncertainty encountered by businesses, and to give consumers more effective access to relief.

Our laws could be written so that their scope of application is clearer. We can continue to participate in international initiatives to clarify which country's law will govern issues such as privacy, copyright breaches, share offers or misleading advertising, and where disputes will be resolved and the rulings enforced.

We can foster links with the enforcement agencies of our main trading partners, helping them so that they will help us. Some progress on these issues has been made but there is much more to be done.

From a legal perspective, we are no longer an island. No consumer, business or lawmaker can afford to overlook this.

* David Goddard is a Wellington barrister specialising in cross-border issues.