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UPD London UK Court Allows Wasted Costs Claim to Proceed Against ACS Law

Posted: 18th Apr, 2011 By: MarkJ
p2p copyright uk ISP file sharing lawralli uk solicitors acslawSolicitors firm Ralli reports that the London Patents County Court (Judge Birss QC) has today ruled that ACS:Law (Andrew Crossley) will be held accountable for the costs incurred as a result of its bungled case against 27 broadband ISP customers; those whom it had accused of taking part in "illegal" internet copyright infringement via BitTorrent P2P services.

ACS:Law sent thousands of "bullying" letters to UK people, each demanding hundreds of pounds in settlement money and legal fees (i.e. speculative invoicing). The firm, which will also be going before a Solicitors Disciplinary Tribunal (SDT) on 3rd June 2011 for directly related failings (here), eventually tried and spectacularly failed to argue its case against a group of those it had accused in court (here).

Today Judge Birss QC ruled to permit the wasted costs application to proceed, before taking a moment out to criticise ACS:Law's conduct in the case as "at best ... amateurish and slipshod". Birss further described ACS:Law's case as "chaotic and lamentable", after it failed to provide the right documents or follow normal practice. "I do not doubt that this led to unnecessarily incurred costs," he warned.

Judge Birss QC said:

"I am quite satisfied to the standard necessary for this stage of a wasted costs application that Mr Crossley is responsible for the Basic Agreements [the licence agreements between Media CAT and original copyright holders] and has thereby acted in breach of the Solicitors Rule 2.04.

I have already found the GCB episode shows that ACS:Law knew perfectly well that Media CAT intended the letter writing campaign to be pressed ahead with despite the court being told that the Notices of Discontinuance were being used in order for the claimant to give the matter further consideration. That finding provides further support for my finding that there is a prima facie case of unreasonable conduct by ACS:Law in relation to the Notices.

In my judgment the combination of Mr Crossley’s revenue sharing arrangements and his service of the Notices of Discontinuance serves to illustrate the dangers of such a revenue sharing arrangement and has, prima facie, brought the legal profession into disrepute. It may be better placed under the revenue sharing heading in this judgment but it is, prima facie, improper conduct in any event."

ACS:Law officially "ceased trading" at the end of January 2011 and many commentators suspected that this was little more than a crafty attempt to force an early closure to the case, thus avoiding the impact of any negative cost rulings against either the firm or Crossley himself. It didn't work.

Michael Forrester, Ralli's Intellectual Property and IT team, said:

"We have considered from an early stage that these actions against our clients were not brought correctly. This Judgment supports our view in all material respects.

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 lead to 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."

The basis for wasted costs is that a legal representative has acted improperly, unreasonably or negligently. Such an application is normally in stages. This first stage deals with whether there is sufficient evidence to make such a costs order. If a Court considers so, then the application moves onto stage 2 when the legal representative has an opportunity to raise further evidence to prevent wasted costs being ordered against him.

According to Ralli, the Judge has allowed the wasted costs order to proceed and they are now awaiting confirmation on a figure. However, it's crucial to point out that there may yet have to be another hearing before a final conclusion can be reached. Ralli is understood to be seeking costs of £90,000 for five of the accused that it represents.

UPDATE 12:49pm

Ralli informs that ACS:Law applied for permission to appeal, which was refused by His Honour Judge Birss.
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