What planet are you on? Of course the proxy owner isn't liable. I suppose you think Google is liable if someone searches for 'dodgy animal sex' and they find it in the search results.
FWIW I wouldn't comtact him, that would be like acknowledging that you thought he had a case. I am not a legal expert but I would have thought that whilst you offer the facility to surf over any bars in place etc, you are not resposible for the content surfed. Why not put a disclaimer saying pupils of xyz school, Mr so and so says you should not use this service. At the very least it should increase your visitor numbers for that school and their friends - viral marketing and all that. The teacher can't complain all you have done is act on his email Personally, I would just ignore the email - your spam filter could always have deleted it before you read it.
CountryBoy, try reading my post again, all of it this time. Bottom line: 1. Put wisely crafted, visible disclaimer on your proxy site, possibly written by someone who understands in this issue. Make sure you add something like this: "If you think this service allows your kids/students/users reach illegal content, please conatct me with proper IPs/hosts and I will disallow their access". 2. Get the IPs of that educational institute from that teacher (or anyone else who complains) and deny the whole network netblock using your .htaccess. That should shut him up. BTW, disclaimer does not automatically mean you`re innocent in case of misuse/abuse of your proxy. Chances you will get in trouble are extremely low but keep that in mind.
He doesnt have a case in hell. BreakDown Isp Proivdes internet=School Provides Computers=You provide proxy. If they cant control their damn network why the hell should have to shut down your site. I bet this guy emailed myspace and told them the same line.
Yeah, especially if the user doesn't have to explicitly agree to the terms. A statement like "by using this site, you agree to our terms" somewhere doesn't cut it.