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Court Clears Way for "Wasted Costs" Claim Against Copyright Law Firm

| 25 Apr 2011 20:49
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A judge in the U.K. has cleared the way for defendants to pursue legal firm ACS:Law and its owner Andrew Crossley for "wasted costs" over copyright violation cases the company never actually intended to take to court.

ACS:Law earned itself no small amount of notoriety for sending out letters to thousands of internet users, threatening them with legal action for various acts of copyright violation if they didn't fork over a £500 ($790) "settlement fee." It's a pretty greasy scheme, to the point that even the strongly pro-copyright British Phonographic Institute spoke out against ACS:Law's methods, but even so "thousands" of people paid up to make it go away, according to TorrentFreak, to a total tune of about £1.5 million ($2.5 million).

Despite clearly not wanting to actually pursue any of the cases in court, the firm was eventually forced to do just that thanks to some backfired legal shenanigans and an exasperated judge. Shortly after the judge's refusal to let the firm simply drop cases against 27 defendants, Crossley claimed that he had been subject to "death threats and bomb threats" as a result of his work and was thus quitting the business entirely, but it doesn't look like he'll be able to get away quite that easily.

Judge Birss QC has decided that claims of "wasted costs," which first came up in January, can be pursued against the law firm. "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 license agreements between Media CAT and original copyright holders] and has thereby acted in breach of the Solicitors Rule 2.04," he wrote in a ruling available on bailii.org. "I should record that even if, which would surprise me greatly, the revenue sharing arrangements Mr Crossley put in place do not violate the letter of the rules, they are improper in any event within the meaning of paragraph 53.4(1) CPD (Ridehalgh v Horsefield p232D-E) in that they can fairly be stigmatized as such. I also find (to the same standard) that the revenue sharing arrangements are unreasonable within the same paragraph in that they do not permit of a reasonable explanation."

"As I found in my previous judgment (paragraph 99) Mr Crossley/ ACS:Law had a very real interest in avoiding judicial scrutiny of the cause of action because of the revenues from the letter writing campaign," he continued. "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."

And in case suggesting that ACS:Law's behavior brought the legal profession into disrepute wasn't strong enough, the judge also described its antics as "chaotic and lamentable" and "amateurish and slipshod." Strong stuff indeed. It seems clear that while legitimate claims of copyright violation must still be taken seriously, intimidation tactics and scattershot attacks against nervous consumers, at least in the U.K., is not going to be tolerated.

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