These types of claims are very worrying for the high levels of uncertainty that they impose on forum operators. In the US, Section 230 of the Communications Decency Act essentially immunises forum operators from defamation claims like this one, but no such strong protection exists in Australia. This lack of certainty effectively provides an incentive for those who feel aggrieved by posts on a public forum to seek damages against the operators of the forum, even where the operators have complied by removing the allegedly defamatory material.
The last time this happened, the action for “injurious falsehood” against the Whirlpool forum didn’t actually go anywhere. However, this sounds a little more serious and anyone operating a site that allows comments or other types of user-generated content should be keeping a close eye on this case. The particular issue came up a number of times at the Web 2.0 in Government conference I attended a few weeks ago and agree that in the absence of any over arching rights to free speech, then its the uncertainty around this that is the real issue – I suppose if a precedent was set in the right direction (i.e. one that didn’t hold ISPs or responsible forum hosts liable) this case could be a good thing. However, there is also an interesting connection with the current case against iiNet by the recording industry, because they clearly want to hold ISP’s accountable for the actions of their users.