Tuesday, 14 December 2010

Media C.A.T. Ltd v A & ors [2010] EWPCC 17: server error

Illegal downloading.  Big issue.  Lots of complaints about lawyers pursuing heavy-handed shoot ‘em all and let God sort ‘em out tactics, such as writing letters to 78 year olds accusing them of downloading Basement Jaxx or whatever.  The London firm of solicitors ACS:Law has become notorious in the blogosphere for its pursuit of illegal downloading; however, as of yet, it has no reported trial successes.  Not an easy win.  Even when the other side doesn't turn up.

The MediaCat case brought by ACS:Law is a prime example.   8 anonymous defendants.  A claim that they had illegally shared, on peer-to-peer networks, the oeuvre of artistes such as Lynsey Dawn McKenzie.  Or, at the very least, had not secured their internet connexions sufficiently, so that someone else could glom off their internet capacity.  And apparently an open and shut case.  So much so that ACS:Law applied for default judgment, and an order that the Defendants stop what they are doing and secure their networks, without even asking for a hearing; ACS:Law had not received a defence, so asked for a victory on the filed papers alone.

So, the judge looked at the court file.  And was not impressed.  These cases were all copyright cases; they should be brought by either the owner of copyright or an exclusive licensee.  Was MediaCat either?  The judge was uncertain.  The claim form didn’t say.  It did however say that MediaCat “represented” the owner and/or licensee, so at least that was one step forward.  But the judge was very uncertain about the whole securing of an internet network.  Not least because the judge decided that ACS:Law had pleaded the law wrongly – the appropriate legislation (sections 16(1)(a) and 17 of the Copyright Designs and Patents Act 1988) does not mention “allowing” someone to use your facilities, but “authorising”.  Biiiiig difference.

The judge also pulled apart the claim form and particulars for being defective; they did not include a number of things the Civil Procedure Rules demand, e.g. whether MediaCat had done the things it needed to do before suing, although he decided that this did not affect his decision.  He had plenty of other grounds for his ruling.

ACS:Law was after a set of default judgments.  In other words, the claims had been filed and served, and the Defendants had done nothing.  In those cases, you can go to Court and ask for judgment.  If the defendant then wakes up to the fact it’s got a judgment against it, no biggie; it can have it set aside, if there’s a valid defence floating around somewhere.  Defendant will have to pay costs, but that’s only fair, it should have done something beforehand.  Thing is, defendants have a couple of weeks within which to do something – put in a form that says “I give up” or “I’ll fight”.  In two of the eight cases the Defendants had not only put in the form, they had sent in a proper defence.  Stating that they had never peer-to-peered in their life.  OK, they had sent the form to Court, not to ACS:Law, but that doesn’t matter; the rules only require the defence be sent to the Court.  The judge implied ACS:Law should have checked with the Court before going for judgment.

So, two down, six to go.  Three other cases had problems; ACS:Law had asked the Court to serve the claim form and particulars, but the Court file did not have any evidence that the Court had done it.  A fourth had a very similar Court file, with no evidence that the Court had served the claim, but the claim evidently had been served – there was a defence with the Court.  You would think this would lead to the inference that those other three claims had been dealt with in the same way, but the Court constrained its imagination.  What it did mean was that there was another case with a defence filed, and three that had apparently not been served.

So six down, two to go.   There was no problem with service in this last brace of cases.  It had all been done and dusted; the Defendants had been served, they had not replied.  Prime candidates for default judgment.  Trouble is, the Court rules dealing with default judgment state that you can only apply for default judgment for a specific sum of money, or for “delivery up” of goods.  That was not what MediaCat sought.  What ACS:Law should have done, said the judge, was make a formal application under a different Court rule.  A trifling, piffling little technicality that the Court would happily ignore for the sake of justice?  No.  The judge pointed out that where injunctions were sought these different rules became important.  There were novel questions of law raised in the claims – could someone be forced to uprate their internet security?  Did the Court have the power to grant injunctions where MediaCat had not proved that the Defendants actually HAD infringed copyright?  These needed to be gone through before a judge, rather than on the nod.  More to the point, how old were the Defendants?  The Court rules do not allow default judgments against children…MediaCat had not provided any evidence on this point at all.

So all eight applications were refused.  In the four cases where a defence had been filed this was obviously correct.  It is unfortunate that the Court rules do not specify that a defendant must serve a defence on the claimant as well as with the Court, but it’s not hugely difficult for a claimant to phone the Court and ask if a defence in claim number whatever has been filed.  The decision that the Court had not served proceedings looks a little harsh, even though it is based on Court of Appeal authority (Patel v Smeaton) that the Court should put an endorsement on its copy paperwork showing when and how a claim was served.  But a claimant is hardly likely ever to know the Court might not have served; MediaCat might have asked the Court to draw the inference that, if at least one other claim filed at the same time was definitely served, the others probably were as well.  However, it would have made no difference.  The Court refused judgment on other grounds – grounds which look to be perfectly sound.  So, one quick route to stop copyright infringement has been firmly cut off.

Tuesday, 7 December 2010

B v Ministry of Defence [2010] EWCA Civ 1317: latent illness

There is a saying that hard cases make bad law.  Often used as justification for a legally rigorous decision that seems to fly in the face of justice.  Ah, says the Court, it works in the long run.  Besides which, if it’s really that bad, Parliament can step in.  All the Court does is uncover the treasure that is common law; Parliament can stomp it into oblivion by passing a simple Act.

The cases that most often seem dreadfully unfair are those involving latent illness.  Mesothelioma is a classic example.  Also a classic example of how the Court tried, and sometimes failed, to help; in Fairchild v Glenhaven Funeral Services Ltd, the Court bent over backwards to ensure justice was truly done to victims, by fiddling with the causation test.  In Barker v Corus (UK) plc, however, the Court took such a strict line that Parliament passed the Compensation Act 2006 to reverse it.

The case of B is a classic example of a tough decision from the Court.  In the 1950s servicemen – many of them national servicemen – were exposed to radiation fall-out from nuclear testing.  Many became seriously ill as time went by.  A group litigation order was made, with over a thousand ex-servicemen claiming damages from the Government.  The Government defended the action on the basis that the servicemen could not prove that their cancers were caused by the radiation; the illness could have occurred naturally.  However, there was also a preliminary issue.  The Government argued that the servicemen were too late to bring claims.  They were well over the limitation period; at best, the servicemen had 3 years to bring a claim from when they became aware that they had a claim.  The servicemen argued that they did not know for sure that they had valid claims until a New Zealand study was published in 2007.  Given that proceedings had been issued even before then, the claims were in time.  Were they?  If not, could the Court use its discretion to waive the time limits?

The Court at first instance said yes and yes.  The Court of Appeal, however, differed.  The Court of Appeal said that the original judge had misunderstood “knowledge”.  It was not a question of knowing all the facts, or even more definite facts; after all, nobody “knows” they have a valid claim, in theory, until they get judgment in their favour.  “Knowledge” was far more diffuse.  All you need to have is something that makes you think about investigating matters further.  This meant that the servicemen had “knowledge” of their claim from some vague awareness of radiation sickness and then contracting a similar sort of sickness.  That should have made them suspect that their exposure to radiation may have caused their illness; that was sufficient knowledge; that was when the 3 year time limit started running.

Should the Court ignore the time limit?  The Limitation Act 1980, which sets the time limits, allows it to do so.  In this case the original judge looked at the injustice to the Claimants.  The Court of Appeal said that that was not a proper exercise of discretion.  There was a more delicate balancing exercise to make, throwing all sorts of factors into the scales of justice.  And the Government had some weighty factors on its side.  The sheer difficulty in proving that men in their sixties and seventies had not contracted cancer through some natural cause.  Could the Claimants have shown that, “but for” their exposure to radiation, they would not have suffered?  Could they show that it was more likely than not that their illnesses were caused by radiation?  Very difficult tests for the Claimants to pass.  The Claimants could not even show how much radiation they had absorbed. 

The Wilsher v Essex Health Authority case stated that, where there were five equally likely causes for Wilsher’s blindness, four of which were natural, Wilsher could not show that the fifth cause – negligence – had, on the balance of probabilities, caused his blindness; in the same way the Claimants would have to look over the past fifty years to verify the cause of their illnesses.  The Court of Appeal looked at some of the evidence to help decide this point, and thought that many of the Claimants were in a similar position to Wilsher; finding it impossible to prove why they had become ill.  The Claimants therefore tried to get around this by using the principles in Fairchild to help with the causation issue.  In Fairchild it was known that one – any one – of a dozen different forms of asbestos exposure had caused mesothelioma.  That was enough to make everyone who exposed Fairchild to asbestos jointly liable.  If the principle were extended, then everyone who exposed the Claimants to radiation – in likelihood, only the Ministry of Defence – would be liable for the eventual illness.  However, the Claimants could not show that radiation had caused cancer.  It could have been a number of things.  In Fairchild only asbestos could have caused mesothelioma.  Therefore the principles of Fairchild could not be extended.  Justice, said the Court, could therefore not be done by waiving the time limits.

I’m not entirely sure the Court of Appeal is correct in some of its application of the law, but that’s because the line of reasoning from Fairchild and Barker (and other similar cases involving exposure to industrial dust, like Bonnington Castings Ltd v Wardlaw) is somewhat confused, and smacks very much of trying to do as much justice as possible.  In Bonnington the Court was content to allow a claim to continue when all the Claimant could do is show that exposure to dust had increased the risk of contracting illness, rather than causing the illness itself; could the same be argued for the servicemen?  The Court of Appeal however finished its judgment with a lament on the difficulties the servicemen faced on factual grounds.  Previous cases had failed, it said, because the link between the tests and the illness was too weak.  The Court had also stated that some of the Claimants before it had poor chances of success regardless.  Perhaps the Court of Appeal was trying to let the Claimants down gently, or perhaps it wanted to stop legal expense on a claim the Court felt was doomed to failure.  Either way, the Court was looking at an exercise of discretion, and that is something which a claimant will always find difficult to rely on.

Only one of the ten test Claimants, Mr Bert Sinfield, was allowed to continue with his action.  He at least could show that he joined the action within 3 years of his diagnosis and so was not out of time.  Tragically, Mr Sinfield died a month after he joined the action. 

A hard case indeed.

Saturday, 4 December 2010

Clarke v Zurich UK General Services Ltd [2010] EWCA Civ 1333: not very appealing

Every case has winners and losers.  Well, almost; there are some very odd cases that end in draws, for example both Anheuser-Busch and Budvar can use the term “Budweiser” in the UK currently because both launched under that brand name here at the same time.  Of course, the losers always think they should never have lost.  After all, if they thought they would lose, why would they fight on?  And sometimes the losers have a point – so they appeal.

The Court is desperate to ensure it does not make mistakes, so the routes of appeal are many.  You lose in the High Court, you ask permission of your High Court judge for an appeal.  If the judge refuses, you can ask a judge in the Court of Appeal.  If the appeal judge refuses, you can have a second stab at arguing in front of two Court of Appeal judges.  Lose THAT and you’re stuffed; but if they allow it, you proceed with your appeal.  Lose the appeal itself, and you get a stab at the Supreme Court for further permission; then that’s it.  Of course, if you win the appeal, the other side get to try their luck at appealing…

Only thing is, if you are going to appeal, you should do so on a point of law.  Appeal courts do not sully their elevated legal minds with anything as dirty as evidence.  Indeed, why should they?  It’s already been gone through by a trial judge, who can see the witnesses sweating and shaking with the fear of the mendacious and can assess them as a bad lot.  Or that they are nervous but honest and telling the truth.  Trials can last for weeks, appeals for days.  There’s no time to go through it all again.  Even in transcript form.  (Unless the judge's assessment of the witnesses was plainly barmy, but that's very rare, believe it or not.)

This neat little case explains the principle admirably.  It’s an appeal from the employment appeal tribunal, so the exact route for appealing is different, but the basics are the same.  Mrs Clarke spent 13 days in 2009 trying to prove that Zurich had dismissed her unfairly, and failed.  Worse for her, the employment tribunal took the unusual – but increasingly more used – step of ordering her to pay Zurich’s costs; usually ex-employees can bring claims gratis, to avoid putting off the genuine claimant, but if the tribunal thinks the claim is vexatious it can order the ex-employee to contribute to the employer’s costs.  She therefore sought to appeal both the ruling on her claim and the ruling on costs.  Repeatedly.

Her last stab was to ask the Court of Appeal for permission to appeal.  The first appeal judge refused permission; she therefore had one final opportunity to argue, in person, before the Court of Appeal.

She took the opportunity; she lost.  The Court saw the problem as the one that many appellants face.  The point of an appeal is to review the law, not the facts.  Zurich had dismissed Mrs Clarke on various grounds, mainly around her claiming to be entitled to a disability pension when she was not disabled, and not co-operating with doctors who were checking whether she was as disabled as she claimed to be.

Mrs Clarke argued was that the doctors had made a mistake in assessing the level of her disability.  The tribunal said that, having considered the evidence, the doctors were correct. Mrs Clarke therefore alleged the tribunal made a mistake by not disagreeing with the evidently mistaken doctors.  But Mrs Clarke could point to no error of law in the tribunal’s conclusion.  Only that she disagreed with the conclusion.  The Court of Appeal pointed out that the tribunal heard evidence, considered the evidence in the round, weighed it all up, and had come to a proper, logical, bona fide conclusion.  No ground for appeal.  

Mrs Clarke argued that she had co-operated with the doctors.  The tribunal said that, having considered the evidence, she had not.  Mrs Clarke therefore alleged the tribunal made a mistake by following the evidence in the wrong way.  But Mrs Clarke could point to no error of law in the tribunal’s conclusion.  Only that she disagreed with it.  The Court of Appeal pointed out that the tribunal heard evidence, considered the evidence in the round, weighed it all up, and had come to a proper, logical, bona fide conclusion.  No ground for appeal.

Mrs Clarke argued that there was a racial element to her dismissal.  The tribunal said that, having considered the evidence, there was not.  Mrs Clarke therefore...well, you get the picture.  There was quite a lot of this sort of thing... 

Mrs Clarke needed to find an error of law.  That the tribunal had heard evidence from a witness who should not have been called, or that they had misinterpreted the level of disability required to get disability benefits, or that the head of the employment tribunal was on Zurich’s board of directors.  That sort of thing.  Simply saying that the tribunal believed the wrong facts is not enough.  Mrs Clarke could not find an error of law; the Court found that the tribunal had applied the law to the facts perfectly satisfactorily and reached appropriate conclusions.  Therefore there would be no further permission of appeal.

Of itself, the case is not important, beyond its relevance to the parties.  It will not create precedent, as it was simply a request for permission to appeal, and normally such applications are not reported; indeed, often the “other” party won’t know of the application until they get the result, they will get to make their own case - if they need to do so - at the appeal itself.  However, it is a useful reminder of a couple of things.  One, how you have to find an error of law to get a chance to appeal.  Two, how careful and conscientious the English Court is in making sure the answer is exactly right.  On the facts of the case Mrs Clarke’s argument was without any real chance, yet she was given several goes to get it right.  Is that fair?  Does it lead to delays and costs?  Possibly.  But isn’t that part of the price of justice?

Thursday, 2 December 2010

Spiller & Anor v Joseph & Anor [2010] UKSC 53: honest comment

The Supreme Court has had a go at reforming libel.  As so often with the juggernaut of common law, it’s not so much a handbrake turn, more a slight change of lane.  The major point that comes out of the reform is that, if you are relying on fair comment, you should at the very least hint at the fact on which you base your comment; something that puts the interested reader on notice that there might be something more to it, rather than give the whole spiel with your opinion.

The facts of Spiller are, as ever with libel, simple.  Mr Spiller is a promoter in the music business, Mr Joseph a singer in, and manager of, a couple of soul tribute bands.  In March 2007 there was a bit of a spat over bookings Mr Spiller arranged, and Mr Joseph sent a rather tetchy email, stating that the contract between the two was so much legal nonsense and not binding.  Mr Spiller therefore posted something on his website to state that Mr Joseph was not interested in honouring contracts; Mr Joseph (and his groups) sued.

In itself, surely a simple issue that could be dealt with very quickly.  Alas libel practice has outstripped the law and it became a beano for lawyers.  The defence threw in defences of justification (i.e. the website reported the truth) and fair comment (i.e. the website contained statements of opinion based on true facts).  Mr Joseph had the defence of fair comment thrown out, a decision upheld on appeal.  So Mr Spiller took it to the Supreme Court.  Quite wisely, as a defence that what you say is true is often surprisingly difficult to prove.

The Supreme Court took the opportunity to offer some serious hints itself.  It put the defence of fair comment back, although changing its name to “honest comment”, a sensible move given that many “fair” comments are patently unfair – but could honestly be held; even the most bigoted and prejudiced non-criminal comments are allowed, as part of the whole free speech shebang, so long as they are honestly held.  It also went a little further generally.  Lord Nicholls in the Hong Kong case of Cheng v Tse Wai Chun Paul [2001] EMLR 777 set out five elements of fair comment, and the Court adopted them, but varied the fourth condition a little – instead of the opinion having to set out explicitly the facts on which the comment is made, it’s enough to set out, or hint at, the gist.  Especially if the facts are pretty public facts.  The reader can always ask for more details if necessary.  Which suited Mr Spiller in this case.  He had not set out the full details of why Mr Joseph might not honour future contracts by including the full email trail and history of the bookings with Mr Joseph; his almost passing reference to there being a contract argument was enough.

The Court was invited to go further, and change the nature of the defence to an objective test (the man on the Clapham omnibus test, i.e. imagining what a neutral bystander looking at things might think was fair or honest, rather than interrogating the mind of the maker of the statement to see if they had a malicious motive), but the Court did not do so.  That would have been a sharp deviation.  The Court did suggest that the Law Commission should look at certain issues, e.g. how the Reynolds defence of responsible journalism should apply, but one area that might make a big impact was the suggestion that juries ought not be involved with libel cases.  Certainly a jury trial adds to the expense, and sometimes juries come up with decisions that can be kindly described as mentalist; awarding Roman Polanski anything more than a penny for damage to reputation (given his criminal convictions) is hard to justify, yet he got £50k for a libel, and an Irish jury awarded a businessman over 8 million euros – a greater damages award he would have got than had he been paralysed from the nose down by a drink-driver – for a sleepwalk-based smear.  As it is, although the case is being hailed as a major step forward, it’s not really; the sum total of its legal changes amount to (a) changing the name of a defence and (b) allowing the "defamer" to be brief.

The case is more interesting from a read-through as to how law changes over time.  There’s a good discussion as to how fair comment evolved and why life is different now since landmark decisions such as Kemsley v Foot.  The thing about juggernauts is that they may not move very quickly, but they tend to get there in the end.

Wednesday, 1 December 2010

Tim Martin Interiors Ltd v Akin Gump LLP [2010] EWHC 2951 (Ch): costs

Lord Justice Jackson has just produced a mammoth report on the future of litigation.  The biggest issue is costs.  Legal proceedings can become gigantically expensive.  Although the very first part of the Civil Procedure Rules beseeches the Court to keep an eye on proportionality, it is still an expensive step to issue Court proceedings, or defend them.  Especially when there’s an inequality of financial arms.

A classic case that illustrates the problems of costs is the TMI case.  When you lose a case, normally you have to pay the other side’s costs; if you think the costs are too high, you can have them assessed by a specialist costs judge (back in the day it was called “taxation” which confused the layman royally).  Usually about a third gets knocked off.

The problem TMI had was that it had not lost a case – it had lost its business.  Almost.  TMI had taken out a mortgage, which it could not pay, so its bank took legal action.  A director paid off the outstanding loan, and extra charges imposed by the bank.  Thing is, one of the conditions of the mortgage was that TMI had to pay the bank's costs of enforcement, so the bank's final bill included £110k of legal costs the bank had paid to its solicitors, Akin Gump.

TMI thought this bill was excessive.  So it applied to have the costs assessed.  Which it is entitled to do; third parties can get someone else’s legal costs checked, if they end up paying, thanks to section 71  of the Solicitors Act 1974.  And they got one heck of a result.  The costs judge reduced the bill from £110k to £30k.  Which was not only a swingeing reduction, it came quite close to carrying professional consequences as well for Akin Gump for overcharging clients.

Akin Gump therefore appealed.  With good reason.  The main reason why the bill was so high was because Akin Gump are a huge firm with City offices that carry a large expense.  Their hourly rate is therefore larger than your average provincial solicitor’s.  And those rates had been agreed by the bank.  You can challenge your own solicitor's bill, but not because the hourly rates are too high; after all, you agreed those at the start.  TMI, of course, had not agreed those rates, but had had those rates imposed on it.

The costs judge had decided that it was inappropriate to charge City rates for mortgage repossession proceedings.  On appeal, the High Court took a different view.  The bank had made the decision to use a big firm, it had taken the risk of paying those more expensive costs, and that decision had not been challenged by TMI.  The Court therefore decided that TMI could not challenge those agreed rates.  For the purposes of challenging the bill, TMI had to stand in the shoes of the bank.  In other words, it was taken to have agreed what the bank had agreed.  Including the hourly rates.  The Court does have jurisdiction to mess around with such hourly rates, but only in very narrow circumstances.  As the bank had not been involved in the costs assessment, the Court could not look at such matters.

A harsh decision on TMI; the work against them was worth £30k, but because the bank had chosen expensive solicitors they had to pay a premium for the bank’s choice.  The provisions for assessment are quite technical and there is some suggestion in the judgment that the Court thought that, perhaps, TMI had not chosen the correct route (it should have sued the bank, not challenged Akin Gump), so there may be grounds for a further appeal, should TMI want to risk further cost. 

One point that does not seem to have been addressed is whether the mortgage contract between TMI and the bank could be used to help.  It is unlikely that the mortgage deal contract would have set out the costs of legal action.  When a price is not agreed under a contract, the law steps in and imposes a “reasonable” price, which is what the costs judge was effectively trying to do.  Could that have been applied here?  On the basis that it is not reasonable for the bank to have chosen an expensive, international, City firm, with expensive, international, City charge-out rates, for a fairly standard piece of law?  Could TMI even argue that the bank was in breach of contract – or at least the fiduciary relationship between contracting parties – by going large with the legal costs?