Entitledto.co.uk is a software firm that produces benefits calculation software. It hosts a free version of the software on its website with a note in its terms and conditions indicating that that version is only for non-commercial use. It has accused Derby of violating that term.
The company sent a bill to Derby County Council which is understood to have been for £10,000, claiming that heavy use from Derby Council internet addresses showed that workers were using the free version of the software as a professional tool.
The Council, which had no written contract or agreement with Entitledto, refused to pay the bill, which it says was based on a misreading of internet traffic to the Entitledto site.
"A significant number of Local Authorities sadly pay no attention to the specific software we produce for them and opt to use the public site for free to support their services," said an Entitledto statement. "It is normal business practice for organisations to pay for services and almost all free services such as you can find on the web today are covered by licensing agreements or copyright that restricts that use to non-commercial or public use only, this is the case for our public calculator."
Derby confirmed that it received the bill and did not pay it because Entitledto's accusation that the web calculator was being used by its staff in the course of their duties was wrong.
"We did receive an invoice from Entitledto," said John Cornell, assistant director of ICT and performance management at the Council. "We checked it out and what they were basing it on was access via the Derby address."
"We pointed out to them that we have going out from our firewall all sorts of access requests, we have free internet access out in libraries and it could well be that any hits on their site are from the public and not from us," said Cornell.
Entitledto said that authorities should use full versions of benefits calculation software. "The reason that E2adviser was developed was so that advisers, who have a greater understanding of the benefit/tax credit system, can give the best advice possible to their clients in return giving them the most accurate information in complicated situations which could never be the case by using our public calculator on its own," said the company's statement. "Moreover, the introduction of local housing allowance means that for private sector tenants a specific calculation for each local authority must be carried out."
But Cornell said that Derby Council does use full, paid-for benefits and entitlements software when calculating benefits on behalf of claimants, and that it does not rely on free web services.
"We've got our own benefits calculator which we use in customer services," he said. "The invoice has been cancelled and we have taken the step of barring access from any council addresses to their benefits calculator."
Struan Robertson, a technology lawyer at Pinsent Masons, the law firm behind OUT-LAW.COM, said Entitledto should change its website.
"Even if council staff had been using this benefits calculator in the course of their duties, Entitledto's argument for payment is flimsy at best," he said. "If they want to restrict their service to non-commercial use only, they need to make that clear on their site. They don't."
"You can't expect to enforce terms like this unless people know about them and agree to them. Agreement can sometimes be implied – but not where the user has to struggle to find any mention of the condition in the first place," said Robertson.