Information Technology Reference
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However, there will be problem in claiming
compensation or succeeding in negligence against
the service providers or professional advisors if
the harm caused is only financial loss which is
bound to happen in case of negligent statements.
Under general law of negligence pure economic
loss will not be compensated. Economic loss is
either loss of profit or the reduction in value of an
item of property (Scott & Black, 2000). Nonethe-
less, in certain exceptional cases, the court may
allow recovering economic loss provided that the
defendant knew that the recipient would rely on
the negligence statement that he made and the
reliance was detrimental to the plaintiff. In the
case of Hedley Byren & Co. v. Heller [1964] AC
465 the House of Lords held that under limited
circumstances a professional making statement
might owe a duty of care. Further, the court agreed
that there could be liability for negligent misstate-
ment causing financial loss, even in the absence
of contractual relationship. Thus any medical
practitioner who comes within the exception can
be held responsible.
The House of Lords stated that in negligent
statement cases, there has to be a “special rela-
tionship” between the maker of the statement and
the person injured by it. It is not a contractual
relationship but a relationship where the maker
of the statement knows it will be relied on, and
not beyond that to those persons whom he might
foresee relying on it. Here the test to apply is not
the foresee test but knowledge test (Keenan, 2000).
Thus the test for causing loss due to negligent
statement is narrower than the test applied for
negligent act causing physical injury.
As regards the expert system, the system is gen-
erally used to manipulate simple data to the level
of making reasoned judgement. The computer is
programmed with judgement rules so that it can
draw upon its enormous data banks of experience
and apply logic and interference, and institution
can reach a reasoned solution to a particular
problem. The expert system is so complicated
which relies on highly qualified professional who
can synthesise decision rules. The manufacturers,
programmers and the experts of companies or
institution utilising the expert system owe duty
of care to the consumers. However, the burden of
proof that the damage or complication suffered by
a respective consumer was due to system failure
is on the consumer. However, Burgunder (2001)
suggested that when the expert system is used
for medical treatment and the system provides
an inaccurate diagnosis or treatment that leads to
detrimental medical complications, then it should
be easy to prove that the expert system had a defect
making it unreasonably dangerous.
Whoever goes online needs to be affiliated with
an ISP who acts as a gatekeeper for accessing the
Web. An ISP can be a big company having millions
of customers or it can be of a small Mom & Pop
business. An ISP may provide one or more or all
of the following services:
1. An electronic mail server which enables
customers and third parties to send and
receive e-mail;
2. A newsgroups server which enables custom-
ers and third parties to send and receive email
in topical forums in which other interested
Internet users also participate;
3. A list server which enables customers and
others to subscribe to a mailing list on a
particular topic using email;
4. A World Wide Web server which enables
customers to publish web pages;
5. A File Transfer Protocol (FTP) server which
enables customers to publish electronic files
and allow others to retrieve them;
6. An Internet Relay Chat (IRC) server which
enables customers to chat with other users
in real time (bitlaw.com, n.d.).
When the ISPs' above-mentioned services are
used by the customers for infringing copyrighted
materials or defaming someone or posting prohib-
ited and objectionable materials online, the ISPs
may be held liable. The liabilities of an ISP for
content prepared and for communication sent by
others will arise from the services, which the ISP
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