Update: Demon pays out £250,000 in libel case

Demon Internet, now part of Thus, has settled its long-running dispute with Dr Laurence Godfrey.

Godfrey, a physics and computer science lecturer, brought two cases against the ISP over two years ago, claiming he was defamed in Demon-hosted newsgroups.

An out-of-court settlement will see Demon pay £15,000 to Godfrey, and around £250,000 for the academic's legal fees.

Demon's solicitor this week told the Old Bailey: "Demon regrets that it did not remove the postings when it was notified of their defamatory content by Dr Godfrey and is happy to take this opportunity to apologise to him for the injury and distress he has been caused."

However, in a press release, Thus (formerly Scottish Telecom) expressed no regrets. Demon's parent said it "remains convinced that the law has not kept pace with the development of the Internet and will work with our colleagues in the industry to lobby for modernisation of the law... it is contrary to common sense to make ISPs responsible for the millions of items carried on the Internet."

The fact that the settlement was made out of court means the case may not set a legal precedent. However, the judge's preliminary ruling made last year that ISPs can be responsible for content held on their servers remains a point in law, and could be used in future legal action.

Speaking to Silicon.com, Dr Godfrey said: "I'm very happy, although not at how long it's taken to get an apology. Demon would argue they needed to fight the case to clarify the law, but the law is clear as it is."

Internet organisations such as Cyber-Rights & Cyber-Liberties (UK), the Internet Service Providers Association (ISPA) and London Internet Exchange (Linx) have in the past campaigned against ISPs being held responsible for content in this way.

Godfrey claimed that Demon last Wednesday met with ISPA to get wider industry backing, and to look at ways of not being drawn into similar legal wrangles in the future.