Judgment was today handed down in the Patents County Court in the wasted and third party costs actions brought by a number of defendants against ACS: Law and the sole principle of that firm, Andrew Crossley.
National law firm Ralli represented a number of Defendants in these actions.
Ralli represented a number of defendants in these matters. Michael Forrester of the Intellectual Property and IT law team commented on the Judgment:
“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.”
Ralli are currently advising hundreds of consumers who allege that letters received from firms alleging copyright infringement amount to harassment.
First judgment on costs
The Judgment handed down today deals with the first stage of wasted costs and the Defendants’ application to join ACS: Law and Mr Crossley as parties to the proceedings for the purposes of third party costs.
Permitting the wasted costs application to proceed in relation to two specific aspects, HHJ Birss QC noted that:
“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.”
Wasted and third party costs
In light of that Judgment, the Defendants applied for wasted and third party costs. Simply, these are applications that ACS: Law and/or Andrew Crossley as sole principle of that firm should pay the Defendants’ costs in these actions.
The basis for wasted costs is that a legal representative has acted improperly, unreasonably or negligently, the conduct complained of caused the applicant to incur unnecessary costs and it is, in all the circumstances, just to make the order.
Such an application is normally in stages. This first stage deals with whether there is sufficient evidence to show, at a first look, whether there are grounds to make such an 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.
Third party costs are applicable where proceedings are initiated and controlled by a non-party who stands to benefit from the proceedings.
The Judge also noted that although it would not be proportionate to deal with some aspects of the case in relation to wasted costs, that:
“ACS:Law’s conduct was chaotic and lamentable. Documents which plainly should have been provided were not provided. This was not the behaviour of a solicitor advancing a normal piece of litigation. I do not doubt that this led to unnecessarily incurred costs.”
And also there were other examples of “conduct by ACS:Law which, at best, can be described as amateurish and slipshod.”
A number of cases were taken to Court by ACS: Law on behalf of their client Media CAT Ltd. These represented the first cases 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 on 8 February 2011, 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 … which, despite the purported discontinuance, are (or were) being pressed ahead in correspondence against many other individuals.”
ACS:Law applied for permission to appeal which was refused by His Honour Judge Birss.