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Straightforward legal blackmail: a tale of P2P lawyering

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Posted: Mon Jun 07, 2010 20:40
"Straightforward legal blackmail": a tale of P2P lawyering
By Nate Anderson | Last updated about 17 hours ago
"Straightforward legal blackmail": a tale of P2P lawyering

On January 26, 2010, the UK's Lord Lucas of Crudwell and Dingwall—yes, it's a real title—stood up and told his fellow peers in the House of Lords that the new crop of anti-P2P "settle or we'll sue your trousers off" warning letters were a travesty of justice.

"In a civil procedure on a technical matter, it amounts to blackmail," thundered the libertarian lord-slash-blogger. "The cost of defending one of these things is reckoned to be £10,000. You can get away with asking for £500 or £1,000 and be paid on most occasions without any effort having to be made to really establish guilt. It is straightforward legal blackmail."

The US has had limited experience with the more "entrepreneurial" sorts of copyright lawyers, the ones who send out tens of thousands of letters and threaten expensive prosecutions if alleged P2P users don't settle first for a significant fee. Most such letters on this side of the Atlantic Ocean have come from trade groups like the RIAA who were more interested in education and deterrence than profits (and who actually brought hundreds of cases when people did not choose to settle).

But the UK has had much longer experience with small law firms who go into the business as a way to "monetize" P2P (and make a load of cash for themselves). The best known of the lot is currently ACS Law, a firm run by one Andrew Crossley.

Crossley's modus operandi mirrors the work currently being done in the US by lawyers like Dunlap, Grubb, & Weaver: track IP addresses in BitTorrent swarms, unmask the identities behind them, then send stern letters demanding immediate payouts or tough prosecutions will ensue.

Crossley claimed in April to have pulled in more than £1 million to date through the scheme.

As such letters start to rain down on people across the US, it's worth a look at the reaction to nearly identical ACS Law tactics from the UK to see how this might play out on our shores.
Does anyone actually get sued?

ACS Law remains controversial for many reasons. Many defendants have claimed innocence, and MPs and Lords have been bombarded by constituent complaints about the firm. The methodology for identifying infringers comes from a Swiss firm and remains... less than fully transparent.

And, notably, ACS Law doesn't seem interested in filing actual lawsuits. In January, the BBC noted that despite thousands of letters, ACS Law had yet to sue anyone. This makes the entire operation look like "intimidate into easy settlement" rather than "stand up for my rights in court."

The accusation stings Andrew Crossley of ACS Law, who once claimed that he got into law because he had been a DJ for 25 years and thought law a way into the music business. In a blog post in May, Crossley painted his reticence to sue in a more noble light.

"It is suggested that I never issue any claims," he wrote. "This is not true. It is fair and correct to say that I try to avoid litigation wherever possible and exhaust all other avenues falling short of litigation prior to proceedings being issued, but proceedings have been and will continue to be issued in appropriate cases. Litigation has always been the final option in the processes I invoke on behalf of my clients and the number and frequency of such actions is shortly to increase significantly."

Whatever the case, Crossley's tactics have outraged some members of the House of Lords. While debating the Digital Economy bill that passed earlier this year, spirited debate broke out about dealing with companies like ACS Law.

Lord Lucas even introduced an amendment called "Remedy for groundless threats of copyright infringement proceedings."

"This amendment arose as another attempt to deal with the problem caused by ACS Law and others in their harassment of people with allegations that they have downloaded copyright[ed] material," he said on January 20.

"This would have the benefit of providing a defense against law firms—doubtless the Minister has received as many e-mails and letters as I have concerning the activities of this particular firm—that just repeat endless allegations and threats, with no intention that I can see of actually going to court. It would give their victims some means of biting back; it would take only one in 100 victims to do so and bring a successful court case to bring this practice to an end."
Depression, stroke, blindness

Crossley and his firm face legal problems over their work. Complaints have poured in to the Solicitors Regulation Authority, which controls lawyers in England and Wales.

An SRA case against Crossley is pending over his letter-writing campaign, though he declared in April, "I have faith that the SRA will remain implacable and objective throughout its deliberations. The facts, processes, procedures and compliance should be the focus of their investigation, not the remonstrations of less than 3 percent of those to whom my firm has written."

Crossley has been in trouble with regulators before. In 2002, the Solicitors Disciplinary Tribunal ordered him to pay £1,250. In a separate incident in 2006 (PDF), the Tribunal demanded he "pay a fine of £1,000, such penalty to be forfeit to Her Majesty the Queen." He also had to pay costs of £3,348.75.

In both of these cases, Crossley had not submitted an accountant's yearly report on his firm—needed under UK rules to show that a lawyer does not improperly hang on to client funds.

The problem appeared to stem from a lack of funds. At one point, he told the tribunal handling his case that his lack of paperwork was "because he had been unable to raise the money to pay the accountant who retained the papers."

Crossley suffered "an extended period of clinical depression in 1999" and then a stroke in 2000. "The effect of the stroke, which caused him to lose his sight altogether for a brief period, was that the Respondent could not work full-time for a period and as a consequence he quickly got into financial difficulties."

This helps to explain his lack of filing in 1999 and 2000. As for the missing filings in 2002 and 2003, those were because his financial problems continued through the middle of 2004.

By 2008, Crossley was doing better. He had founded ACS Law and ended up representing people like Vince Acors, the British telecom exec who became an international news item when he was accused of having sex on a Dubai beach. (If you're ever in Dubai, don't do this.)

At some point after this, Crossley decided to go into the settlement letter business. The first letters went out in mid-2009 and Crossley claims to have pulled in more than £1 million in the year since.

That may have helped with the finances, but it didn't do much for his public relations effort—you know it's bad when even the major music labels tell the BBC, "We don't favor the approach taken by ACS Law to tackle illegal file-sharing."

ACS Law has stirred up so much anger that entire blogs are now dedicated to trashing the firm, and the major consumer group Which? has taken to running stories about Crossley and others engaged in the same business.

In January, Which? noted that it had "heard from more than 150 consumers who believed they had been wrongly accused."

One letter writer told Which?, "My 78 year-old father yesterday received a letter from ACS law demanding £500 for a porn file he is alleged to have downloaded. He doesn’t even know what file sharing or bittorrent is so has certainly not done this himself or given anyone else permission to use his computer to do such a thing."

Crossley has also threatened those who disparage him, even in the US. Earlier this year, he threatened to sue website Slyck.com for defamation after a forum poster referred to ACS Law's "five point plan" as a "wank plan." The EFF got involved and told Crossley to go pound sand.

And the negative reactions aren't restricted to consumer groups and outraged Internet users. They extend even to the House of Lords, where several peers used debate time this year to make clear just how much they dislike ACS Law and its tactics.

Consider the following sets of highly specific abuse directed at ACS Law between January and April of 2010.

Lord Clement-Jones: "Like many noble Lords, I have had an enormous postbag about the activities of this law firm. It is easy to say 'of certain law firms,' but this is the only one that I have been written to about...

"ACS seems to specialize in picking up bogus copyright claims and then harassing innocent householders and demanding £500, £650, or whatever—a round sum, in any event—in order to settle...

"This amount of intrusion is unacceptable. If someone has a claim, they need to issue a summons and go to court; but this bullying, which never results in a court action that can be tested, is the worst kind of harassment."
Lord Lucas

Lord Lucas: "We have to be careful about setting out to criminalize, as he says, a large proportion of our population, particularly when it involves putting them not in the hands of the criminal law with all the safeguards, care and rationality that involves, but in the hands of firms of solicitors who are out to make a buck from the process. None of these people is nice to deal with.

"ACS Law, one of the firms involved in this, has been kind enough to write to me. Its technique is to send out letters saying that it has evidence that a breach of copyright has been committed and demanding a few hundred pounds in recompense. The difficulty is that the evidence has usually been provided by a company abroad that does not disclose the methods by which it has been obtained. It may well have been obtained against data protection rules—that is certainly the conclusion that the Swiss and French authorities seem to have reached.

"It is anyway totally impenetrable. You receive one of these things saying that you have done wrong and owe money. How on earth do you disprove it? Without spending a great deal of time and money, you have no means of showing this company that you do not owe them what they say. I think most of their income comes from people who just pay. I am not aware that there have been many court cases at the end of this because of the element of bluff.

"This seems a disreputable thing to wish upon our citizens."

Lord Young of Norwood Green: "On the much-discussed and debated ACS Law, I am glad that it has at least been reported to the [Solicitors Regulation Authority] but regret that no action seems to have been taken to date."

Lord Clement-Jones: "We learn of new entrants to the hall of infamy, such as Tilly Bailey & Irvine—the second law firm which I do not think anybody has mentioned in addition to ACS Law. We also know more about the firm responsible for the investigations, Logistep. As my noble friend mentioned, the activities of these two law firms and Logistep are an embarrassment to the rest of the creative rights industry.

"We have seen more letters since Committee stage which demonstrate the methods being used by these law firms, which are of a threatening nature—some six or so pages as a first letter is grossly disproportionate."

Note: Tilly Bailey & Irvine dropped its practice of sending such letters in April 2010. "We have been surprised and disappointed at the amount of adverse publicity that our firm has attracted in relation to this work and the extra time and resources that have been required to deal solely with this issue," the firm said. "We are concerned that the adverse publicity could affect other areas of our practice and therefore following discussions with our clients, we have reluctantly agreed that we will cease sending out further letters of claim."

Lord Young of Norwood Green: "I would liken them to rogue wheel-clampers, if I can use that analogy..."

Earl of Erroll: "We will face the old situation in which ACS Law and others threaten people with huge costs in court unless they roll over and give lots of money up front, so that people end up settling out of court. The problem is the cost of justice, which is a huge block. We have to remember that."

And the outrage wasn't confined to the Lords. As one peer noted, "We wrote to the Lord Chancellor, as has been heard, to bring this matter to his personal attention. As you know, we have received a reply from the Ministry of Justice, and a further letter from the Solicitors Regulation Authority. These letters explain that there have been complaints and a thorough investigation is under way. Like all noble Lords, I wish it could act more promptly and we could bring this to an end."

If Crossley wanted public notoriety, he has it now; even the Lord Chancellor has been roped into the debate.
Coming to America?

This hasn't deterred Crossley. In a blog post earlier this week, he announced a return from Cannes, France and said that "a new joint working relationship with US-based attorneys has opened up the North American region to our clients for identification and pursuit of illegal file sharing of their products."

The first version of this post announced that ACS Law was "working in cooperation with a newly-formed organization, the United Copyright Group." That reference was scrubbed from the post two days later.

"United Copyright Group" sounds a lot like "US Copyright Group," the brand name of a legal team from Dunlap, Grubb, & Weaver who have filed suit against 14,000 P2P users in the US so far this year. Could the two firms have joined forces?
The original ACS Law blog post (credit: Google's awesome cache)

Crossley didn't respond to our request for comment, but Tom Dunlap of Dunlap, Grubb, & Weaver did. "The US Copyright Group is not working with ACS Law," he told us.
Exciting times ahead

From "blinded by a stroke in 2000" to "trashed on a regular basis in the House of Lords"—it has been an interesting decade for Crossley and his firm.

Will firms like the US Copyright Group stir up the same national response here in the US? Hard to say. The RIAA did go after 18,000 US citizens without the same level of high-level outrage, though there were key differences between the two legal campaigns.

But there's a more fundamental debate than the one over how these law firms should handle such cases and just how much cash they should seek to squeeze from file-sharers. It's a debate we don't expect our top officials even to engage with in the US, but it remains a live topic in the UK.

That debate: is piracy really a problem? Here's Lord Lucas once more, talking about the film Avatar:

It seems to me that the industry is being peculiarly stupid about [piracy]—it got 300,000 free advertisements. Avatar is something that you cannot consume sensibly on a small screen: you need the big-screen experience to appreciate all the work that they have put into it. The immediate consumption of it created an enormous demand for going to the cinema, which has benefited the film enormously. That is the fundament of this—we must get the industry to see this as an opportunity and not as a threat...

Yes, we should support copyright, but we should direct ourselves at real losses and not imagined losses. I do not believe that the makers of Avatar have lost a dollar; in fact, I think that they have gained a great deal from the piracy. We should not seek to punish people for losses that have not occurred.

Such a policy would put a dent in Crossley's business; he claims that 80 percent of people receiving his letters pay up, many for "amounts more than originally claimed."

With such positive results, "we have been instructed to increase the number of claims we issue at court by at least 300 percent over the coming months," he wrote. "In order to fully service our new clients, we will be doubling the size of our team in the very near future."

"Exciting times ahead."

Now reading this article besides hating lawyers even more has made me realize what torrents have lead to. Blackmail? And second how can blackmail be legal? Could this prove to be the begging of the end of torrents as we know it? Or will they just take a new shape and from?

for all this and more go to http://torrentznews.blogspot.com/
ic3m4l3 avatar
Posted: Mon Jun 07, 2010 22:01
wikid good read relates exactly tomy plight!WOWthanx dude

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