Failure to bring UK cyber legislation in line with the US could have grave consequences for British Internet businesses civil liberties leaders warn Wednesday. The caution comes as the US Supreme Court rules that ISPs should not be responsible for content carried on their servers. This contradicts the verdict in the high profile Demon Internet versus Laurence Godfrey case in which a UK judge ruled ISPs were liable if they had been informed about defamatory material. The two cases highlight the different attitude the two nations are adopting to online libel. The US case originally began in 1994 when teenager Alexander Lunney sued US ISP Prodigy.com after a rude email written by someone posing as the boy got into the hands of the police. News that American ISPs will be given the same "common carrier" that telcos and mail services enjoy will be greeted with relief across the pond. But UK ISPs will continue to be at a disadvantage thinks Malcom Hutty, director of civil liberties organisation Stand. "I think we will see some high profile companies coming out and saying the US is a better place to do business because of its legal environment," he says. Hutty believes the US verdict was the "only sensible solution." "ISPs cannot be held liable for things they have no control over," he says. He calls on government to reform the defamation laws. "We need to close the loophole which says ISPs have responsibility if they are informed of content. It is not technically difficult to change the law, it just requires the political will." Yaman Akdeniz, director of Cyber-Rights and Cyber-Liberties believes the government should hold an immediate inquiry into the issue. "ISPs need to be taken out of the chain of liability. They cannot be defendant, judge and jury and are not in a position to decide if content is defamatory," he says. Ripples from the Demon case -- in which the ISP agreed to pay Mr Godfrey over £250,000 in damages -- have already been felt in the UK. Demon has been removing postings from its newsgroups and gay Website Outcast and Mr Hutty's own anti-censorship site have been closed down following complaints. Akdeniz does not believe current government thinking on the Internet sits with existing laws. "Parliament claims the UK is the best place for e-commerce but the current defamation law and the upcoming RIP [Regulation of Investigatory Powers] bill contradict that," he says. Like Hutty, Akdeniz thinks businesses will move outside the UK. "Investors will think twice about investing in a country with complex rules and regulations. It could push ISPs out of the market or even out of the country," he says, pointing to Ireland as a possible alternative for disillusioned firms. What do you think? Tell the Mailroom. And read what others have said.