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By: MarkJ - 8 February, 2011 (1:16 PM)
p2p copyright uk ISP file sharing lawThe London Patents County Court (Judge Birss QC) has this afternoon prevented Andrew Crossley's controversial solicitors firm, ACS:Law UK, and its intermediary MediaCAT, from discontinuing 26 cases of alleged "illegal" internet copyright P2P file sharing by broadband ISP customers.

The firm, which made its money by "bullying" UK internet users (e.g. PlusNet , Sky Broadband etc.) with dubious settlement demands ("speculative invoicing") for alleged "illegal" (unlawful) copyright P2P file sharing activity, last week tried to avoid further scrutiny by attempting to drop the cases (here) and most recently "ceased trading" (here).

Judge Birss QC was less than pleased with this tactic and concluded by announcing his intention to deliver a written judgement today. At the time lawyers for the defence, largely represented by the national law firm Ralli, also indicated that they would continue to pursue the firm for legal costs and potentially even Crossley himself for harassment.

Statement from National Law Firm - Ralli

Background

The 27 cases represented the first to be taken to Court following tens, if not hundreds of thousands of letters sent to consumers accusing them of downloading media on “peer to peer” networks over the internet.

Media CAT Ltd tried through its lawyers, ACS:Law, to discontinue the proceedings against alleged infringers shortly before the first hearing. His Honour Judge Birss QC refused to allow the claims to be dropped without a hearing which was in two parts on 17 and 24 January.

Judgment on notices and documents

Giving Judgment, HHJ Birss QC refused to allow the notices of discontinuance to stand. He held that the notices were an abuse of the Court’s process and would give an “unwarranted advantage” in that:
“the notices … avoid judicial scrutiny of the underlying claims on which the Norwich Pharmacal orders were based which, despite the purported discontinuance, are (or were) being pressed ahead in correspondence against many other individuals.”
The Judge noted that to discontinue the cases for the reasons, rather then merely amend them was unusual and that applications to amend happen “in the civil courts nearly every day.”

On the issue that ACS: Law and Media CAT had not provided key documents, HHJ Birss QC stated that:
“Mr Ludbrook’s [Media CAT’s barrister] instructions were that they were “in storage” and not readily available. If true, it is extraordinary. A party who keeps key documents which are cited in the Particulars of Claim in storage is not a party anxious to progress their claim in court.”
Judicial comment on situation

The Judgment also commented on the process followed by the Claimant and ACS Law that these cases are “based on untested legal and factual propositions and issues of technology” and that the letters sent to thousands of consumers “materially overstates the untested merits of Media C.A.T Ltd’s approach”.

The Judge continued that:
“Media CAT and ACS:Law have a very real interest in avoiding public scrutiny of the cause of action because in parallel to the 26 [one of the 27 was previously settled] court cases, a wholesale letter writing campaign is being conducted from which revenues are being generated. This letter writing exercise is founded on the threat of legal proceedings such as the claims before this court.”
The Court also made comment on the share of revenues between the parties:
“ACS:Law’s interest is specifically mentioned … because of course they receive 65% of the revenues from the letter writing exercise. In fact Media CAT’s financial interest is actually much less than that of ACS:Law. Whether it was intended to or not, I cannot imagine a system better designed to create disincentives to test the issues in court. Why take cases to court and test the assertions when one can just write more letters and collect payments from a proportion of the recipients?”
Judicial comment on GCB

The Judge also commented on letters sent by a second company, GCB Ltd, who purported to also act for Media CAT. One of the Defendants represented by Ralli received a further letter from GCB, even after served with a notice of discontinuance.

Commenting on GCB’s involvement, the Judge stated:
“The GCB episode shows that Mr Crossley’s client had every intention of doing precisely that and that ACS:Law were perfectly well aware of it. It is very difficult not to draw the inference that this was nothing more than a last ditch attempt to make some money from the letter writing exercise.”
Ralli comments

National law firm Ralli represented a number of defendants in these matters. Michael Forrester of the Intellectual Property and IT law team commented on the Judgment:
“We are pleased with the outcome for our clients in these cases. It was important for all the Defendants in these matters that discontinuance was properly obtained so no collateral advantage could be obtained against them by anyone not a party to these proceeding.

The Judgment highlights a number of legal and technical difficulties with these cases which we had advised our clients of throughout. We expect there to be another hearing to deal with legal costs and what proportion, if any, have to be paid directly by ACS: Law.

We are dealing with cases where consumers have explained how they cannot possibly have uploaded or downloaded copyright protected material, but they are still pursued. The legal basis for the claims made against these alleged file sharers involves complex legal and technical principles. These are extremely difficult for a lay person to understand and can mean an innocent person is being pursued.

It can be incredibly upsetting for people to receive these letters and they may well have a claim in harassment, so I am urging them to come forward."

Ralli themselves are currently advising hundreds of consumers who claim that letters received from firms alleging copyright infringement amount to harassment. Apparently anyone in receipt of such letters can contact harassment@ralli.co.uk for a free assessment of their case. According to an update posted on Slyck, proceedings will now continue on 16th March 2011. This is expected to close part of the case, while a separate hearing will tackle the costs issue.

As it stands ACS:Law has gone out of business, although there is still an outside chance that some of those who paid the settlement money might be able to reclaim it. However that's probably quite a stretch and depends on the judgement and whether or not the Information Commissioners Office (ICO) fines them for breaches of the Data Protection Act (DPA). Even ACS:Law had insurance.

The case has also cast further doubt on the use of Internet Protocol ( IP ) address based evidence, which can suffer from errors and, at best, only identifies the connection owner and not necessarily the guilty individual (e.g. such as on most shared public/home/open or business networks).

Deborah Prince, Which?'s Head of Legal, added:

"I don’t think the law as it stands would find an account holder liable for another person’s unauthorised actions. If a judge confirmed that this is, indeed, the case, this would probably lead to the end of these types of claims as the extra work that would be needed to find reliable evidence of illegal filesharing, as well as the additional cost, would probably put rights’ holders off."

It should be stressed that most UK law firms do not act in the way that ACS:Law appears to have done. The outcome has also stressed the need for a more workable Digital Economy Act (DEA) to help clarify the processes and rules, which can do its job without falling foul of the same pitfalls. Easier said than done.
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