Media C.A.T Limited –v- Adams & Ors & ACS Law & Andrew Crossley [2011] EWPCC 10

Posted on Monday, April 18th, 2011

C had sought to discontinue its copyright claims against alleged internet file sharers. The Court struck out the discontinuance as an abuse of process and ordered that the rights holders themselves be joined to proceedings. C failed to do so and the action was struck out and C ordered to pay D’s costs on the indemnity basis together with an order that the scale costs in the Patents County Court should not apply because C’s behaviour was an abuse of process. D applied for a wasted costs order under s. 51(6) Senior Courts Act 1981 for various reasons. Some of the reasons failed to satisfy the merits test under Costs Practice Direction 53.6(1)(a) and others were rejected because the costs of investigation would be disproportionate under Costs Practice Direction 53.6(1)(b), Ridehalgh –v- Horsefield (CA) [1994] Ch 205 applied. However, the revenue sharing agreements whereby ACS Law took 65% of the proceeds as their fee were improper and unreasonable and without them D would not have been sued and would not have incurred the unnecessary costs of defending themselves. CPD 53.6(1)(a) was therefore satisfied. Furthermore, the point was narrow, relating to the whole of the costs of proceedings and no re-investigation of the claims was required, thus satisfying CPD 53.6(1)(b). A stage 1 wasted costs order was therefore made. Furthermore, ACS Law/Mr Crossley stood to benefit from the actions which would have not have existed but for the improper revenue sharing agreements. There was a good and arguable case that ACS/Mr Crossley would be liable for D’s costs. They were joined to the action for that purpose.

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