The Court of Appeal ruled in July that no duty of care was owed by a trade association (Swimming Pool & Alliance Trade Association or "SPATA") to web users in respect of statements made on its website. The judgement turns on the fact that the website urged users to make independent enquiries and there was therefore an insufficient relationship of proximity between SPATA and the website users to satisfy a case for negligent misstatement.
Mr and Mrs Patchett wished to have a swimming pool installed in their back garden. They consulted SPATA's website, which contained information on swimming pool installation, including a section which allowed users to find SPATA member contractors to carry out the installation work. The SPATA website assured users that "pool installer members are fully vetted with checks on their financial record, their experience in the trade and inspections of their work." The site also stated that SPATA registered members were covered by SPATA's "unique Bond and Warranty Scheme offering customers peace of mind that their installation will be completed fully to SPATA standards – come what may!"
The Patchetts appointed Crown Pools Limited, which was listed on the SPATA site as member contractors, to install their swimming pool. Crown ran into financial difficulties prior to completion of the work and a replacement contractor had to be hired to finish the work. The Patchetts claimed that this caused them losses of £40,000.
As Crown had become insolvent, the Patchetts sought to sue SPATA in respect of their losses because it had not been clear from the SPATA website that Crown was an "associated member" of SPATA only, as opposed to a full member, and as such was not subject to the financial checks nor protected by the Bond and Warranty Scheme. The Patchetts claimed that SPATA's negligence in providing advice on its website had breached a duty of care to provide accurate information to consumers and had caused their loss.
Acting by majority, the Court of Appeal did not support this view. Lord Clarke's leading judgement found that it would not be fair, in the circumstances, to hold that SPATA had assumed a legal responsibility to the Patchetts for the accuracy of statements on the website.
The judgement discussed two crucial factors in determining whether a duty of care exists in an advisor / advisee relationship:
- the opportunity to use disclaimers; and
- the likelihood of the advisee relying on the advice given without taking other advice or making further enquiries.
Crucially for SPATA, whilst it had not posted an explicit disclaimer, its website urged users to obtain an information pack before appointing and paying a pool installer. Had the Patchetts done this, the true nature of Crown's status as SPATA associated member and its implications would have been clear to them. The Court agreed with the trial judge's findings that it would be extremely surprising for a customer to rely on the protection of a guarantee such as SPATA's Bond and Warranty Scheme without obtaining a copy of the policy or other details of the protection offered.
Trade associations may find themselves increasingly the subject of litigation as individual businesses fail in the current recession and disappointed customers have nowhere else to turn. This judgement highlights the importance for trade associations, and indeed any other business hosting or providing information about third parties or their products online, to ensure that websites contain clear disclaimers or instructions to potential customers to make their own further enquiries regarding those parties or products.