Demon Internet’s parent company Thus has announced that it has reached an out of court settlement with Dr Laurence Godfrey, who was suing the ISP for libel. The case is expected to have wide reaching implications for the Web, as it is based around how responsible ISPs are for materials posted on their servers by others. The events resulting in the legal action began over three years ago, in January 1997. At that time, a message was posted to a news group carried by Demon's servers that was attributed to Godfrey, as well as defaming him. After his requests that the post be removed went unanswered, Godfrey sued Demon. Again, in 1998 another message defaming Godfrey was posted, and again, after removal requests went unheeded, Godfrey filed a second suit. Demon responded to both suits by denying that it was its responsibility to remove messages posted by users. In March of last year, a judge in London's High Court ruled that Demon was responsible for information posted to and made available from news groups on its service, a ruling that Demon appealed. The case has been watched closely by ISPs and Web sites who run or serve newsgroups or chatrooms. It is expected that a ruling against Demon would lead to many companies dropping such services as being too risky. It is with this is mind that Thus "will press the Government for recognition that ISPs should not be liable for the millions of items carried on the Internet every day", as the company said in a statement. A spokeswoman for Demon confirmed that the company has paid £15,000 in damages to Godfrey, saying that the legal costs will be decided by the court at a later date. Newspaper reports have estimated the legal costs of both parties, which Demon will have to pay, at over £480,000.