A UK libel case shows why companies should be careful about what their staff say online

In a landmark legal case, a UK man has won £10,000 in damages from a woman who posted false allegations about him in a Yahoo chatroom. It is the first time a person has been successfully sued for libel after posting comments on the internet.

Keith Smith, a UKIP Parliamentary candidate who fought the Portsmouth North seat last year, was falsely accused of being a sex offender and a racist by Tracy Williams, who had used a pseudonym to post her comments on a Yahoo discussion site. The comments started after the two apparently disagreed in a group discussion about the Iraq war.

In 2004 Smith obtained a court order requiring Yahoo to reveal Williams' real name, and then started High Court proceedings against her.

"The case clearly shows that people are legally liable for what they say on the internet – and in turn, employers are liable for what their employees say," said a posting on network security firm SmoothWall's web site. "Larger companies should be well aware of the corporate governance law requirement to be able to record all such communications."

SmoothWall's advice to firms is that if any communications leaving the corporate network cannot be recorded, they should be blocked, and acceptable usage policies should clearly state to employees the types of conduct that will not be tolerated on the internet.