“No man is an island, entire of itself; every man is a piece of the continent.” John Donne
That statement has never been truer, especially with regard to operating online, both as a consumer and as a business. This article will look at the realities of dealing with companies in different countries.
The modern world is progressively online, accessible to almost all, no matter their location. This can be amazing most of the time, as people away from the main markets of North America and Europe can have access to much of the same material. People are no longer isolated by location. With only a few exceptions, the world has access to the latest in news, entertainment, and interaction. As a result, we have seen world changing events. #metoo could not have happened without social media. The Arab Spring could not have happened without access to news and online communication. Websites and services are being created to service not just a local market, but the world.
For tech lawyers, this means working with websites to draft terms and agreements that need to consider a number of special items (as a side note, while websites can be accessed by almost anyone, if a website is targeting a certain market then lawyers will look at whether there is a need to tailor sections of the terms and agreements to meet the laws of those countries, and gaining local assistance in doing so). One of those will often be the jurisdiction. This is an agreement between the website and the user that outlines that, if an issue should arise, which country’s law will be followed, and which court will be used.
For websites run by companies in New Zealand, this will typically be New Zealand, as it is the most convenient to the website owner and is the law system they are familiar with. However, with companies based in the USA, the jurisdiction will be in a particular state, often one the company isn’t based in, but because it provides the most business-friendly results. The state that was laughed at in the movie “Wayne’s World”, Delaware, is the most usual state to see. Over 50% of publicly traded USA companies, and 60% of Fortune 500 companies, are incorporated in Delaware, despite the state having a population of under one million people. This is because Delaware has legislation that is business friendly, as well as providing a more simplified trial process.
So, if you were to have a dispute with an online website, chances are it’s USA-based with the jurisdiction being in Delaware. So, should nothing else work, you’d be looking at finding a lawyer with the right to practice law in Delaware.
For most people that would be too expensive an approach to take. This means, to be honest, most online terms and conditions don’t really mean much to someone in New Zealand.
We are sometimes presented with a situation where we must advise a client to go no further, even if they are in the right. Law can be expensive, it’s one of the largest flaws with the legal system. If the terms and agreements on a website require you to go to court in another continent, there will need to be the weighing up between the cost (which is often not covered even if you win); and the benefit. If the benefit is minor, going to court in another country isn’t an effective option. For the majority of people, there is no benefit in spending dollars to recover cents.
This is one of the benefits of using products and services, where possible, based in your own jurisdiction.
Enforcing the Unenforceable
However, this doesn’t mean that you will have no options. So here are some tips to getting a result from an online company based in another jurisdiction:
Overall, be reasonable in your communication with the other party and, if the possible costs warrant it, see a lawyer.
We live in a single connected world, yet we don’t have a single connected legal system. There will always be a conflict between what is agreed to and what you’ll be able to enforce. Most of the time companies will do what they reasonably can to resolve an issue, just approach them in a reasonable manner. Of course, if you need legal advice, just ask.