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	England and Wales Patents County Court
You are here: BAILII >> Databases >> England and Wales Patents County Court >> Media CAT Ltd v Adams & Ors [2011] EWPCC 10 (18 April 2011) URL: http://www.bailii.org/ew/cases/EWPCC/2011/10.html Cite as: [2011] EWPCC 10, [2011] FSR 29

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IN THE PATENTS COUNTY COURT

		St. Dunstan's House 133-137 Fetter Lane London EC4A 1HD
		18/04/2011

His Honour Judge Birss QC :

1. The nature of this case is set out fully in my previous judgment Media C.A.T. v Adams [2011] EWPCC 6 handed down on 8^th February 2011. The claim was a copyright claim in relation to pornographic films brought by the claimant Media CAT. The defendant in each case is a member of the public alleged to be liable for infringements associated with illegal file sharing of those films by someone (maybe the defendant or someone else) who used the defendant's internet connection to conduct file sharing. ACS:Law is the solicitor for the claimant. The principal of ACS:Law is Mr Andrew Crossley.
2. Despite an attempt to discontinue all of these proceedings, on 8^th February I gave directions for the cases to continue and struck out the Notices of Discontinuance. Media CAT were directed to join the owners of the copyright work(s) relied on by 4pm on 22^nd February 2011. Save for that, the actions were stayed until 16^th March 2011 and I directed that there would be a hearing on that date to decide what to do. The defendants submitted that if the copyright owners were not joined then the actions should be struck out. The defendants also made clear that they would be seeking wasted costs (CPR Part 48 r 48.7) against ACS:Law and/or Mr Crossley and also an order that ACS:Law and/or Mr Crossley should pay the costs in any event pursuant to s51 of the Senior Courts Act 1981. I directed that these matters would be considered on 16^th March if necessary. Of course if the copyright owners had been joined then case management directions would have been given on 16^th March to proceed with the litigation.
3. On 16^th March the case came back before me. Media CAT was not represented and did not appear. Mr Guy Tritton instructed by the solicitors Ralli Solicitors LLP appeared for Mark Jimack, Allan Billington, Christopher Birkett, Wayne Bacon and Christopher Beck. The other defendants did not appear and were not represented. Mr Paul Parker instructed by Mills & Reeve LLP appeared representing ACS:Law and Mr Crossley. No distinction was drawn between ACS:Law and Mr Crossley at the hearing. In context it sometimes makes sense to refer to ACS:Law and sometimes to Mr Crossley but for the purposes of liability at least at this stage of these applications no distinction has been drawn between them.
4. By this stage a number of the actions had settled. The list of defendants on this judgment therefore includes fewer names than the previous one.
5. Media CAT had made no attempt to join the copyright owners. I heard Mr Tritton's submission as to what should be done. I ordered that the actions should all be struck out and ordered Media CAT to pay the defendants' costs. I accepted Mr Tritton's submissions (i) that the costs should be assessed on an indemnity basis and (ii) that the scale costs provisions generally applicable to proceedings in the Patents County Court should not apply. Under CPR Part 45 rule 45.41(2)(a), the Patents County Court scale costs provisions do not apply where the court considers that a party has behaved in a manner which amounts to an abuse of the court's process. My reasons for making these orders were addressed in a short ex tempore judgment given on 16^th March.
6. Following these orders I heard the application by the defendants represented by Mr Tritton (and Ralli) for wasted costs and a costs order under s51 of the 1981 Act. The remainder of this judgment deals with that application and in the judgment from now on "the defendants" refers to the defendants making the application and represented by Mr Tritton.

Wasted Costs Order

7. Under s51(6) of the 1981 Act, the Court has power to order a legal representative to meet "wasted costs". By Part 48 Rule 48.7 (2) the Court must give the legal representative a reasonable opportunity to attend a hearing to give reasons why it should not make such an order.
8. Section 53 of the Costs Practice Direction (CPR Pt 48) (hereafter "CPD") applies to wasted costs. Paragraph 53.4 provides that:

53.4 It is appropriate for the court to make a wasted costs order against a legal representative, only if-

(1) the legal representative has acted improperly, unreasonably or negligently;

(2) his conduct has caused a party to incur unnecessary costs, and

(3) it is just in all the circumstances to order him to compensate that party for the whole or part of those costs.

9. Paragraph 53.6 CPD provides that as a general rule the court will consider whether to make a wasted costs order in two stages. Both sides submitted that I should follow the general rule and I will do so. This is therefore the first stage. Paragraph 53.6(1) provides that, in the first stage, the court must be satisfied:

(a) that it has before it evidence or other material which, if unanswered, would be likely to lead to a wasted costs order being made; and

(b) the wasted costs proceedings are justified notwithstanding the likely costs involved.

10. In summary part (a) applies a merits test and part (b) sets a proportionality test. Both elements are in issue on this occasion. Mr Parker submitted that even if, on the merits, part (a) was satisfied, nevertheless having regard to the sums involved, it would not be proportionate to go further and the matter should end here in any event.
11. The leading case on wasted costs is Ridehalgh v Horsefield (CA) [1994] Ch 205. The case was approved in the House of Lords in Medcalf v Mardell [2003] 1 AC 120 subject to a clarification of the position relating to privilege.
12. In Ridehalgh the Court of Appeal explained what "improper", "unreasonable" and "negligent" meant in the section of their judgment at 232-C to 233-F. I will not repeat the explanation here.
13. An important point is that pursuing a hopeless case is not itself enough to bring on a wasted costs order (see Ridehalgh at 233-F to 234F). The Court of Appeal drew a distinction between pursuing a hopeless case and a legal representative lending his assistance to proceedings which are an abuse of the process of the court. Only the latter attracts the possibility of wasted costs.
14. At p237 E-F of Ridehalgh the Court emphasised causation. The court only has jurisdiction to make a wasted costs order when the impugned conduct has caused a waste of costs and only to the extent of such wasted costs. A causal link is essential and this is reflected by paragraph 53.4(2) CPD.
15. The merits test and proportionality test in parts (a) and (b) of paragraph 53.6(1) CPD correspond to two sections of Ridehalgh:

(a) At p239 B-C the Court described what is in effect the merits test in the context of the then Rules of the Supreme Court. The task is to decide if there is "an apparently strong prima facie case" against the lawyer.

(b) At 238 G to 239 A the Court emphasised the proportionality point. The procedure must be fair and as simple and summary as fairness permits. Hearings should be measured in hours not in days or weeks. Judges must not reject a weapon which Parliament has intended to be used for the protection of those injured by the unjustifiable conduct of the other side's lawyers, but they must be astute to control what threatens to become a new and costly form of satellite litigation.

16. Mr Parker referred me to Regent Leisuretime Ltd and others v Phillip Skerrett and others [2006] EWCA Civ 1032. In this case the Court of Appeal set aside a first stage wasted costs order made by the judge below against the solicitors Reynolds Porter Chamberlain. Particular aspects of the matter were that the judge had been given no indication of the costs claimed and did not have material on which he could form a view as to whether significant unnecessary costs had been caused to be incurred by reason of the solicitor's conduct. Also, once the costs in question were considered, Lloyd LJ found that they would likely be of an order that would be totally disproportionate to the costs involved in a second stage hearing.
17. In this context Mr Parker drew my attention to paragraph 53.8 (2) CPD, which states that the application for wasted costs and any evidence in support must not only identify what the lawyer is alleged to have done or failed to do but must identify the costs that he may be ordered to pay or which are sought against him. The Regent Leisuretime case highlights the importance of that aspect of the matter.
18. Mr Parker's most striking case on proportionality was Daly v Hubner [2002] Lloyd's Rep P.N. 461. There Etherton J held that the case did not satisfy the merits test in paragraph 53.6(1)(a) CPD but he went on to consider the proportionality test in paragraph 53.6(1)(b) as well. In that case the costs in issue were 75% of $98,000. The costs of the applicant for wasted costs to date were $24,000 and the costs of the respondents together so far were $46,000. Thus $70,000 so far had been spent to seek an order for $73,500. Etherton J held that the costs of pursuing the wasted costs jurisdiction were so disproportionate to the costs of the issue that even if he had been of a different view on the merits test, he would not be satisfied that the application or its further pursuit would be justified. On the facts Mr Parker submitted that the costs position in this case was comparable to Daly v Hubner. I will address that below.
19. In Medcalf v Mardell the House of Lords dealt with a situation in which the legal representative's client maintained their legal professional privilege. Their Lordships held that since the privilege was the client's and not the lawyer's, it was not a privilege which the lawyer could waive. Thus Lord Bingham said this (at p135 H to 136 B):

The court should not make an order against a practitioner precluded by legal professional privilege from advancing his full answer to the complaint made against him without satisfying itself that it is in all the circumstances fair to do so. This reflects the old rule, applicable in civil and criminal proceedings alike, that a party should not be condemned without an adequate opportunity to be heard. Even if the court were able properly to be sure that the practitioner could have no answer to the substantive complaint, it could not fairly make an order unless satisfied that nothing could be said to influence the exercise of its discretion. Only exceptionally could these exacting conditions be satisfied. Where a wasted costs order is sought against a practitioner precluded by legal professional privilege from giving his full answer to the application, the court should not make an order unless, proceeding with extreme care, it is (a) satisfied that there is nothing the practitioner could say, if unconstrained, to resist the order and (b) that it is in all the circumstances fair to make the order.

20. Mr Tritton submitted that the approach to privilege taken in this case risks emasculating the wasted costs jurisdiction. Mr Parker denied that and summarised Medcalf v Mardell as a principle that the court is obliged to give ACS:Law the benefit of the doubt if privilege is not waived. I accept Mr Parker's summary.

The evidence

21. The evidence filed for this application consists of a second and third witness statement of Clare Perchal, a solicitor at Ralli representing the defendants and a third witness statement of Andrew Crossley. I will address the content of that evidence in context below.

The Wasted Costs Application

Proportionality - CPD paragraph 53.6(1)(b)

22. Mr Parker submitted the defendants had failed to comply with paragraph 53.8 CPD because they had not identified the costs in their evidence. There are two points: whether the defendants identified what the costs were and whether they quantified them. On the first point, the defendants did make it clear in Ms Perchal's second witness statement, served with the application notice, that they were seeking the defendants' costs of these proceedings by way of wasted costs (paragraph 5(a)). At that stage they were not quantified but at that stage they were still being incurred. As regards quantification by the time of this hearing, on instructions Mr Tritton informed me that his clients' costs collectively so far (including everything) were £90,000. Mr Parker is quite correct that the claimants should have identified that sum in advance. While it can be said that they only crystallised at the hearing since that is the point at which the proceedings came to an end, they could still have been quantified. However Mr Parker's client has not, in my judgment, suffered any substantial prejudice from this and I will not base my decision on that ground.
23. A major aspect of Mr Parker's submissions was that whatever view one took of Mr Crossley's conduct, having regard to the sums involved it would be disproportionate to move to the second stage of wasted costs proceedings in this case. So far Mr Parker and Mills & Reeve LLP have incurred some £36,000 costs dealing with the wasted costs application as a whole. Mr Parker submitted that one could assume a similar sum had been spent by the defendants making a total of £72,000. So Mr Parker submitted, relying on relatively similar figures in Daly v Hubner, it would be disproportionate to go to the second stage of a wasted costs application.
24. Mr Tritton informed me that in fact his clients costs related to wasted costs were far less than the amount suggested by Mr Parker. On instructions Mr Tritton informed me that his solicitor's estimate as to the costs incurred so far relating to wasted costs was £5,000. To be on the safe side he was prepared to work on the basis that £10,000 should be deducted from the overall £90,000 to remove any risk of including costs attributed to the wasted costs application itself.
25. Mr Parker challenged the £90,000 figure. He informed me that his instructing solicitors had been told by Ralli that the defendants' costs as at 14^th January were about £25,000 and questioned how they could have risen to £90,000 since. I note that 14^th January was the date of the first hearing, just before which the Notices of Discontinuance were served. Mr Parker questioned how a single day in court after that (the 24^th January hearing which led to my previous judgment) could account for the extra costs, unless a great deal was spent on wasted costs. At this stage I am in no position to do anything other than accept what Mr Tritton has told me.
26. Conversely Mr Tritton expressed surprise at the size of the sum spent on Mr Crossley's behalf on wasted costs and submitted that there was a danger of a self fulfilling prophecy if a party subject to a wasted costs order could use the costs incurred in addressing the issue as a justification for avoiding the issue altogether. Although one can see Mr Tritton's point, the Court of Appeal in Ridehalgh were at pains to warn against wasted costs turning into substantive satellite litigation and they laid specific emphasis on proportionality.
27. A likely reason why Mr Parker and Mills & Reeve's costs are what they are, is because of the wide range of detailed issues arising. To investigate all of the various problems thrown up by Mr Crossley's conduct in this case would be time consuming and costly. I recognise that this logic can be characterised as meaning that the more misconduct there appears to be, the less likely it is to be dealt with, but in my judgment the point is that this is a wasted costs application and is concerned primarily with the unnecessary costs incurred by the defendants. Proportionality has to be kept in mind at all times. The conduct of legal professionals generally is a matter for their professional regulator.
28. Mr Parker submitted that it was important to focus on the Court's task on a wasted cost application. It is a narrowly confined procedure and the court should concern itself with specific areas of costs, specifically wasted by specific improper/unreasonable or negligent conduct in the context of the litigation. I accept that submission.
29. To investigate and deal with the whole range of Mr Crossley's conduct further would be a costly and time consuming exercise. However that does not mean that there are not specific points which would not involve major cost to consider further and which may satisfy the test in para 53.6(1)(b). Accordingly I will consider proportionality on an issue by issue basis as I go.

The issues

30. The parties divided the issues up in different ways. Mr Parker produced a table of some 17 issues which he perceived were points taken against his client. For each topic below I have set out the number of the row(s) in Mr Parker's table to which the topic corresponds. The issues I will consider are:-

i) Hopeless claim [1, 14, 15]

ii) The Basic Agreement (champerty / Media CAT's title) [5, 6, 7, 13, 17]

iii) Failure to join copyright owners [12]

iv) The original Norwich Pharmacal orders [2]

v) The letter of claim [3, 9]

vi) Negligent correspondence [10]

vii) The damages limit of £3,000 [11]

viii) Abuse of process - avoiding judicial scrutiny [4, 8 16]

Hopeless claim [1, 14, 15]

31. Mr Parker's table addresses a general argument that, as formulated, Media CAT's claim was hopeless or without foundation and that ACS:Law should be liable for wasted costs as a result. The specifics are an allegation that improper means were employed to obtain the defendants' IP addresses [1], a point that the allegation of infringement by unsecured wireless internet connections was hopeless [14] and a point that the evidence was deficient to support the Particulars of Claim [15]. These points represent an attack on the basic claim, (assuming Media CAT's title in the claimant's favour). I have considered the manner in which the claimant's case has been formulated in my previous judgments. To delve into these questions further would involve complex and lengthy satellite litigation of precisely the kind warned against in Ridehalgh v Horsefield. I am not satisfied wasted costs proceedings on these grounds would be justified having regard to the likely cost involved (para 53.6(1)(b)).

The basic agreements (champerty / nominal claimant / Media CAT's title) [5, 6, 7, 13, 17]

32. The evidence includes a copy of the Sheptonhurst agreement (as referred to in Media CAT v Adams [2011] EWPCC 6) and the first page of a corresponding agreement with Darker Enterprises Ltd. These agreements underlie and are fundamental to the cases. Without them there would be no proceedings. Under the agreements, Media CAT acquires its right to litigate from a copyright owner like Sheptonhurst, and the terms on which the revenues generated are shared are then provided for. There would appear to have been other corresponding agreements with other copyright owners but neither side suggested that any of the agreements were different from the Sheptonhurst agreement. I will work on that basis. I will refer to them all as the Basic Agreements.
33. There are two issues arising from the Basic Agreements: a) the revenue sharing arrangements they represent and b) Media CAT's title to sue which derives from them. I will address these points separately.

a) Revenue sharing arrangements

34. Rule 2.04 of the Solicitors' Code of Conduct 2007 provides that a solicitor must not enter into an arrangement to receive a contingency fee for work done in prosecuting or defending any contentious proceedings before a court of England and Wales, except as permitted by statute or common law. Mr Tritton emphasised that the Rule uses the word "arrangement" rather than "agreement" in order to avoid narrow contractual rules as to parties.
35. Mr Parker submitted that ACS:Law were not a party to the Basic Agreements and it is true that Mr Crossley's signature does not appear on the Sheptonhurst Agreement. However the agreement states expressly that the "Licensee" (i.e. Media CAT) shall instruct Andrew J Crossley trading as Messrs ACS Law Solicitors "to manage all matters and actions relating to the pursuit of alleged infringers". Mr Crossley is defined as the "Retained Lawyer". In clause 6.3 the revenue share is provided for. The Retained Lawyer receives 65% of the net revenue. Clause 7.1 states that "the Licensee hereby irrevocably instructs the Retained Lawyer to collect hold and where applicable distribute the Net Revenues collected between the parties named and in the proportions identified in clause 6.3". The agreement ends "© ACS Law Solicitors 2009". In my judgment the Basic Agreements are "arrangements" which Mr Crossley has "entered into" for the purposes of the Solicitors' Code of Conduct.
36. The Basic Agreements are plainly arrangements for Mr Crossley to receive a contingency fee for work done. However in support of a submission that he had not breached the Solicitors' Code of Conduct, Mr Crossley produced a copy of a "Collective Conditional Fee Agreement" between Media CAT and ACS:law which he said existed at all material times in relation to contentious matters. It is referred to as the CCFA. The point is that the Solicitors' Code of Conduct refers to "prosecuting or defending any contentious proceedings before a court of England and Wales". So Mr Crossley argues that although the Basic Agreements cover the letter writing campaign, the CCFA was applicable whenever a claim form was issued and that, he says, is within the rules.
37. As a document considered in isolation the CCFA is (as Mr Tritton described it) "fairly standard stuff". However he also submitted that it was highly doubtful that the CCFA is anything more than a piece of paper. After all the Basic Agreements are not silent about prosecuting contentious proceedings before a court in England and Wales. They recite in terms that they relate to prosecuting claims through the civil courts (see clause 1.1.1 set out in my previous judgment paragraph 5). They refer to taking civil action (clause 3.1) and define revenues in such a way as to include all revenues generated from civil proceedings (clause 6.1).
38. Mr Tritton submitted the CCFA was a "fig leaf" document, that no bills have been disclosed showing how moneys have actually been distributed and that there is no suggestion ACS:Law were actually billing Media CAT. Mr Tritton pointed out that the dates of two disclosed Basic Agreements straddle the date of the CCFA. The Darker Enterprises Agreement is dated 18^th June 2009, the CCFA was signed by Andrew Crossley on 1^st August 2009 and by Lee Bowden on 28^th October 2009 while the Sheptonhurst Agreement is dated 19^th November 2009.
39. In my judgment there is an apparently strong prima facie case that the Basic Agreements are improper and champertous. I say this for the following reasons. First, I accept Mr Tritton's point about dates. If the CCFA was entered into on the genuine basis that it varied the terms on which ACS Law was operating as compared to the prior Darker Agreement, why was another Basic Agreement entered into afterwards in the same terms? Moreover there has been no attempt to explain the manner in which the revenue share was going to work for the cases in which ACS:Law were supposedly not collecting 65%.
40. Second, even if the CCFA was applicable to all cases brought to court, on its face the CCFA relates only to costs. The "fee" in a CFA is the lawyer's fee for work done. However the terms of the Basic Agreements relate to all revenues whether to be regarded as lawyer's costs or as damages. It does not differentiate. Thus even if the CCFA was not a fig leaf and was to be regarded as governing Mr Crossley's fees, it only varies the terms of the Basic Agreements which relate to those fees. It leaves entirely unchanged the arrangement whereby ACS:Law collect a 65% share of any damages obtained from the defendants in the litigation.
41. Third, one purpose of the CCFA was obviously to avoid Rule 2.04 of the Solicitors' Code of Conduct since that rule refers to contentious court proceedings. The argument on Mr Crossley's behalf is that the Basic Agreements govern the letter writing campaign but the CCFA kicks in when proceedings begin. I have grave doubts about that since the letter writing campaign itself is based on names obtained via the Norwich Pharmacal orders. The whole exercise including all the letters from beginning to end is based on contentious proceedings. I would be astonished if the rule prohibiting contingency fees was to be interpreted as permitting them for Norwich Pharmacal applications and no such submission was made to me. Therefore the distinction on which the CCFA argument is based, between a "not-contentious" letter writing and court proceedings, is unreal in this case.
42. Mr Tritton submitted that all the pre-action correspondence was in fact within the definition of contentious proceedings in the Solicitors' Code of Conduct (tracing the definition through the definition section of those rules to s87 of the Solicitors Act 1974). The definition includes work done "for the purposes of" proceedings as well as work done "in" proceedings. Mr Tritton's submission is a properly arguable construction of the provisions but I do not have to decide that point at this stage and the point was not developed in detail.
43. Mr Crossley is clearly a beneficiary of these champertous arrangements since he is to receive the lion's share of the revenues. Before having the copyright notice drawn to his attention, Mr Parker submitted there was no evidence that Mr Crossley had drafted the Basic Agreements. 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 and has thereby acted in breach of the rule 2.04 of the Solicitors' Code of Conduct. 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 stigmatised 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.
44. Mr Crossley put in evidence in his Third Witness Statement directed to establish that he had made a loss from representing Media CAT under the funding arrangements in place. This was to support a submission that he did not fund the proceedings and did not benefit from them. Although during the course of argument this point appeared to be advanced on the wasted costs issue (row 6 of Mr Parker's table makes the point too), the purpose of Mr Crossley's evidence about his finances was in fact to address the third party costs issue and I note that Mr Crossley himself makes that clear in the first sentence of paragraph 8 of his statement. In my judgment the evidence is not relevant to wasted costs. Assuming Mr Crossley has indeed made a loss so far (and I am not satisfied I have the whole picture relating to the finances of this exercise in any event) it does not alter the fact that the Basic Agreements are improper and unreasonable. The extent to which it is relevant to the third party costs point is a matter I will address in context below.
45. As regards causation, since the Basic Agreements underlie the whole case, the totality of the defendants' costs of these proceedings have been caused by them and have been wasted as a result. Without the revenue sharing arrangements embodied in the Basic Agreements the defendants would never have been written to or sued. These claims would not have happened and none of their costs would have been incurred. By entering into these arrangements Mr Crossley caused the defendants to incur unnecessary costs, the costs of defending themselves. The merits test in paragraph 53.6(1) (a) is satisfied.
46. In my judgment the revenue sharing issue satisfies the proportionality test in CPD paragraph 53.6(1)(b). It is a well defined and narrow point which relates to the whole of the costs of the proceedings claimed by the defendants. It does not require a wholesale re-investigation of the merits of these claims or any other issues of that kind. It will not be costly to deal with at the second stage.

b) Media CAT's title

47. The other aspect of the Basic Agreements which falls to be considered relates to Media CAT's title to sue. The Basic Agreements describe themselves as "Licence Agreements" and define Media CAT as a "Licensee" and the other party (Sheptonhurst, Darker etc.) as "Licensor". As I understand it Media CAT contends that the agreements give it a licence under the copyright and that is why Mr Ludbrook, who represented Media CAT at the hearings in January, accepted that s102 of the Copyright Designs and Patents Act 1988 applied (see Media CAT v Adams [2011] EWPCC 6 at paragraph 76).
48. However the problem with Media CAT's title to sue is more fundamental than that. Media CAT's case is that it is a licensee because at least a licensee can sue in some circumstances, albeit that s102 applies. Despite the window dressing in the definitions within the Basic Agreements, the operative clause 1.1.1 looks much more like an assignment of a bare right of action which the court does not recognise (see Lord Mustill in Giles v Thompson [1994] 1 AC 142 at p153 –G). Mr Tritton submitted that Media CAT was neither a copyright owner nor an exclusive licensee and had no locus standi to bring the proceedings at all. He also pointed out that the Particulars of Claim did not plead that Media CAT was a licensee, and reminded me of what I said in paragraph 26 of my previous judgment. It would be obvious to any intellectual property lawyer that the true nature of Media CAT's right as pleaded in the Particulars of Claim raised a question mark over its ability to be a claimant at all in a copyright case. Mr Tritton submitted that the Basic Agreements were negligently drafted by ACS:Law and the negligence was not merely an unintended act of incompetence but was done for ACS:Law's benefit.
49. In my judgment the drafting of operative clause 1.1.1 in the Basic Agreements was prima facie negligent. Mr Parker did not advance a case to deny that, he submitted there was no evidence Mr Crossley was responsible for the drafting of the Basic Agreements. I have already dealt with that above. Mr Crossley was plainly responsible. The difficulty I have is that if, as Media CAT contended before, the agreement is to be construed as a licence then it does operate to give Media CAT a cause of action, albeit one whose exercise is circumscribed by s102. The costs wasted as a result of this negligence would be costs attributable to trying to sort out what exactly Media CAT's rights were. Although undoubtedly some costs in these proceedings will have been incurred as a result, they will be a small proportion of the overall total and will be very difficult to disentangle. To embark on an exercise of trying to tease out these costs would be disproportionate. Whatever the position as regards paragraph 53.6(1) (a) on this issue, paragraph 53.6(1)(b) is not satisfied.
50. Finally on this topic I should address the point that Media CAT are said to be a nominal Claimant (Mr Parker's table point 6). This does not add anything to the issue above as far as wasted costs is concerned.

iii) Failure to join copyright owners [12]

51. One of the points perceived by Mr Parker to be taken against ACS:Law is that the failure to join the copyright owners was itself a cause for wasted costs. This goes with the issue of Media CAT's title which I have addressed already.

iv) The original Norwich Pharmacal orders [2]

52. A number of submissions arose from the original Norwich Pharmacal orders. For the first time in these proceedings I have now been shown a copy of one of the orders (dated 19^th November 2009). Mr Tritton submitted that the orders appeared to have been obtained without any disclosure to the Chief Master of the manifest difficulties in Media CAT's title to sue. The defendants' solicitors Ralli have pressed ACS:Law for disclosure of the evidence put before the Court to obtain those orders and disclosure has been refused. Mr Tritton also drew my attention to a number of paragraphs in the order and submitted that they had not been complied with.
53. There are two issues. First is the question of obtaining the Norwich Pharmacal orders in the first place and second is whether the order has been complied with.
54. On the first point I am struck by fifth recital to the order. This reads:

AND UPON reading the written evidence relating to this application and it appearing that there is a prima facie case that each of the subscribers associated with the IP addresses listed in Schedule 1 to this Order have copied the Applicant's work(s) on to his or her personal or office computer (the "Work(s)") without the Applicant's permission for the purpose of making it available via file sharing websites for third parties to download, which may give rise to a claim for copyright infringement.

55. The recital plainly reflects the manner in which ACS:Law put the case to the Chief Master. It is followed by another recital recording that it appears to the Court that the applicant's copyright claim has a real prospect of success. Notable by its absence is any reference to the fact that an IP address does not identify an infringer at all but only an internet connection which is capable of being shared by many people. Furthermore there is no reference to the "authorising third parties to infringe" argument deployed on Media CAT's behalf in order to deal with that problem.
56. Despite the recital in the Order, ACS:Law has always known that the copyright infringement case here was not one based on contending that the subscriber had copied the work on to his or her personal or office computer. That is clear from letter of claim. It has the authorising point buried at page 3.
57. In my judgment this recital raises a question about how ACS:Law put Media CAT's case right at the beginning. However getting into that question and looking into the evidence provided to the Chief Master would be precisely the kind of satellite litigation deprecated in Ridehalgh. It would be disproportionate to look into it even if the basis on which Media CAT's case was put was wholly flawed and even if it might lead to a conclusion that the court was misled. Misleading the court is a very serious matter indeed but it simply could not be investigated here without spending inordinate time and cost on the issue. That is not what the wasted costs jurisdiction is for.
58. The second issue arising from the Norwich Pharmacal order is whether it has been complied with. Taking the points in turn:-

i) The Order records an undertaking on the part of Media CAT to keep the names and addresses which are disclosed confidential subject to certain exceptions. One exception relates to the copyright infringement proceedings which are to be commenced. The undertaking is drafted on the basis that these infringement proceedings will be commenced in the High Court. In fact they were commenced in the Patents County Court. This is yet another example of conduct by ACS:Law which, at best, can be described as amateurish and slipshod. However I doubt it has caused any wasted costs on the defendants' part.

ii) Paragraph 11 of the order provides that a report will be provided by the Applicant to the Respondent ISPs within 6 months of the date of the order. The report was to state precisely, from the names disclosed, how many persons were sent letters of claim and against which persons legal proceedings were issued. In her witness statement served well in advance of the hearing Ms Perchal drew attention to this paragraph and made the point that it clearly envisages that the legal proceedings were meant to be issued within 6 months of the order. Plainly that did not happen and before me there is no evidence that any report was ever prepared either. The only point taken on behalf of ACS:Law about this is that the breach of paragraph 11 cannot have caused any wasted costs. In my judgment Mr Parker is right that no wasted costs flow from this apparent breach of the order. I will hear counsel as to whether I should direct ACS:Law and/or Media CAT to provide the report to the court and the defendants' solicitors or explain why there is no report to provide.

59. In summary, consideration of the Norwich Pharmacal orders in this case reveals, prima facie, a series of errors and questionable conduct by ACS:Law but it does not give rise to a stage one finding of wasted costs. This is not to exonerate ACS:Law, it is in my judgment the result of the correct approach to the wasted costs jurisdiction.

v) The letter of claim [3, 9]

60. In my previous judgment I found that the letter of claim was misleading. It misrepresented Media CAT's standing in the case and materially overstated the merits. On the previous occasion Mr Tritton submitted that there was a strong prima facie case that it was deliberately misleading and on the previous occasion I declined to make a finding to that effect. Mr Tritton repeated and reinforced his submission that there was a strong prima facie case that the letter of claim was deliberately misleading before me. He pointed out that letters of claim were being sent even after the first Particulars of Claim were served. Thus the misleading letter was being sent even after whoever drafted the Particulars of Claim had reformulated the case as to Media CAT's title to sue. Mr Tritton relied on the letter of claim both as a matter of impropriety by ACS:Law and negligence.
61. In my judgment the letter is plainly negligent and may well be improper. However again I remind myself that this is a wasted costs application. It is very hard to see what substantial unnecessary costs were incurred by these defendants as a result of the letters of claim. In this respect Mr Parker emphasised White v White [2002] EWHC 724 (Ch) but the nature of the law report, which lacks the complaints document which was appended to that judgment, does not make this an easy case to rely on beyond the cases I have addressed already. In the case before me, there may have been some costs unnecessarily incurred in trying to disentangle the claimant's title as described in the letter but they would be far outweighed by the cost of dealing with these issues at a stage two wasted costs hearing. Paragraph 53.6(1)(b) CPD is not satisfied in relation to the letter of claim.

vi) Negligent correspondence [10]

62. This point refers to the considerable chasing in correspondence which had to be done by Ralli in the Autumn. 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. However I have no figures to go on and, even if I had them, I very much doubt the costs in question would justify a stage two wasted costs hearing. Paragraph 53.6(1)(b) is not satisfied.

vii) Inflated damages claim of £3,000 [11]

63. The claim form states that the value of the claim does not exceed £3,000. The defendants contend the damages will be far less. This is not a point for wasted costs.

viii) Abuse of process / avoiding judicial scrutiny [4, 8, 16]

64. In my previous judgment I found that the notices of discontinuance were an abuse of process. They had the collateral effect of avoiding judicial scrutiny of the underlying copyright claims. These copyright claims are the foundation of the letter writing campaign from which ACS:Law is a financial beneficiary.
65. On this point Mr Parker submitted (i) that the merits test for wasted costs could only be satisfied if the court found that Mr Crossley had knowingly assisted in the abusive Notices and (ii) that the court was precluded from finding that Mr Crossley had the requisite knowledge because the non-waiver of privilege by Media CAT means Mr Crossley is in no position to give any evidence in defence of the advice he gave and the instructions he received. (The same point was also put forward in relation to the "hopeless case" issue but I have dealt with that above on a different basis.)
66. In Ridehalgh v Horsefield the Court of Appeal considered abuses of process in the context of pursing a hopeless case. The court said the following (at p234 D-F):

It is, however, one thing for a legal representative to present, on instructions, a case which he regards as bound to fail; it is quite another to lend his assistance to proceedings which are an abuse of the process of the court. Whether instructed or not, a legal representative is not entitled to use litigious procedures for purposes for which they were not intended, as by issuing or pursuing proceedings for reasons unconnected with success in the litigation or pursuing a case known to be dishonest, nor is he entitled to evade rules intended to safeguard the interests of justice, as by knowingly failing to make full disclosure on ex parte application or knowingly conniving at incomplete disclosure of documents. It is not entirely easy to distinguish by definition between the hopeless case and the case which amounts to an abuse of the process, but in practice it is not hard to say which is which and if there is doubt the legal representative is entitled to the benefit of it.

67. In my judgment the submission of law, that there must be "knowing assistance", risks creating a technical rule when that was the very thing the Court of Appeal were seeking to avoid in Ridehalgh (see the discussion on "improper, unreasonable and negligent" in the preceding part of the judgment). I do not mean to say that some knowledge will not be a vital element but a blanket requirement for "knowing assistance" cannot be a substitute for a careful consideration of the particular facts and circumstances. The context in which knowing assistance is being referred by the Court of Appeal is in seeking to characterise the line between "merely" pursuing a hopeless case and the actions in pursuit of such a case becoming an abuse of process. The case before me is not that kind of case. What was abusive about the Notices was the collateral advantage they gave rise to.
68. I am quite certain the Court of Appeal did not intend the words quoted above to be applied like a statute. Nonetheless in my judgment it is plain that Mr Crossley is someone who "lent his assistance to proceedings [i.e. the Notices] which are an abuse of the process of the court" and is someone who "use[d] litigious procedures for purposes for which they were not intended, as by issuing or pursuing proceedings [i.e. serving Notices of Discontinuance] for reasons unconnected with success in the litigation". Whether he was instructed to or not, Mr Crossley was not entitled to do that.
69. Media CAT's privilege does not preclude a finding of wasted costs against ACS:Law in relation to the abuse of process in this case. Giving Mr Crossley the benefit of the doubt about the nature of his instructions and the advice he might have given, does not alter the fact that he served these Notices in this case and they were an abuse of the process of the court. Even if Mr Crossley had not been a beneficiary of the letter writing campaign, the collateral advantage they gave his client Media CAT meant that serving the Notices on behalf of the client was conduct with no reasonable explanation. After all Mr Crossley knew all about the parallel letter writing campaign since his firm was conducting it. In my judgment Mr Crossley should not have served the Notices, despite (I presume for this purpose) his client's instructions to do so, given the collateral advantage they gave to that client in relation to the letter writing campaign.
70. In paragraph 58 of my previous judgment 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.
71. Mr Tritton advanced his case on the Notices as one of unreasonable conduct and that is how I have addressed it. However it seems to me to be right to take into account the fact that the improper revenue sharing arrangements meant that Mr Crossley himself had a direct financial interest in continuing the letter writing campaign. 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. 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.
72. Clearly costs incurred before the Notices were served were not wasted costs caused by that conduct. The majority of the defendants' costs from the date of service of the Notices are likely to have been spent dealing with them and are costs unnecessarily incurred as a result of the impugned conduct. The evidence I have is that the defendants' costs as at 14^th January (which is or is very close to the date of service of the Notices) were £25,000. Thus the balance making up the £80,000 figure were such costs. That is £55,000. If these had been the only wasted costs which were to go forward to stage two then I would be concerned about proportionality since the costs attributable to wasted costs so far are £45,000 and no stage two hearing has taken place yet.
73. As regards proportionality, the major findings required on this topic have already been made in my previous judgment. This is another self-contained point which will not require a wide ranging investigation to deal with. Since the costs attributable to this point are a subset of the overall costs going forward as a result of the revenue sharing point, in my judgment the requirements of paragraph 53.6(1)(b) CPD are satisfied.
74. Finally a distinct point raised about GCB was a free standing allegation of impropriety by ACS:Law in transferring the work to GCB (point 8 in the Table). As ACS:Law's agent, GCB should not have written direct to Mr Billington since he had instructed solicitors (see my previous judgment paragraph 51) but any wasted costs arising from this misconduct will be very small and this point would not satisfy para 53.6(1)(b). It would plainly be disproportionate to pursue that issue by way of wasted costs.

Conclusion on wasted costs

75. I will make a stage one wasted costs order but only in relation to the revenue sharing arrangements and the service of the Notices of Discontinuance. I will not make an order in relation to the other issues.

Privilege

76. The CCFA was produced because Mr Bowden, Director of Media CAT, waived Media CAT's privilege to the limited extent necessary to permit Mr Crossley to produce the CCFA. Mr Bowden's letter relating to privilege states that Mr Crossley had requested that he waive privilege in Media CAT's files generally but he declined to do so save to that limited extent.
77. In coming to this conclusion I have given ACS:Law the benefit of the doubt as regards Media CAT's non-waiver of privilege. In doing so I have assumed in ACS:Law's favour that the privilege in question is indeed one which it is not Mr Crossley's to waive. However the nature of the relationship between ACS:Law and Media CAT and in particular the revenue sharing arrangements mean that the relationship between these two entities may not be a simple arms' length arrangement of a lawyer and his client. Having regard to the particular matters which are to be taken forward to a stage two wasted costs hearing, I doubt the privilege issue is a major factor. However if the claim to privilege is relevant and is to be maintained then ACS:Law will need to satisfy the court that the privilege applies.

Order under s51 of the Senior Courts Act

78. Section 51(1) and (3) of the Senior Courts Act 1981 provide that the costs are in the discretion of the court and that the court has full power to determine by whom and to what extent the costs are to be paid. Aiden Shipping v Interbulk [1986] AC 965 established that this means the court has the power to order a non-party to pay costs in an appropriate case. In this case the defendants seek such an order against ACS:Law/Mr Crossley. The point is not concerned with wasted costs. Mr Tritton submits that Mr Crossley should bear the costs of the cases because in effect they were primarily aimed at advancing ACS:Law's own interests (see e.g. the 65% share).
79. CPR Part 48 rule 48.2 provides that where the court is considering whether to make such a costs order the person must be added as a party to the proceedings for the purposes of costs only and he must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.
80. At this stage Mr Tritton seeks only an order adding ACS:Law / Mr Crossley as a party. He proposes that the "hearing at which the court will consider the matter further" should then be the same as the stage two wasted costs hearing.
81. CPR Part 19 rule 19.1 sets out the court's powers to add a person as a party. The language of the rule is that the court may make such an order when it is desirable to do so. Mr Parker submitted that no such order should be made unless there was a good arguable case that they should be joined. I will adopt that standard. Unless there is a good arguable case that Mr Crossley will be liable for a third party costs order, he should not be joined as party and the matter should end here.
82. Mr Parker submitted that there was not a good arguable case for third party costs and the application should be refused on its merits. In terms of the procedure to be adopted Mr Parker did not argue against Mr Tritton's proposed way forward in the event that there was a good arguable case.
83. Thus the question I have to decide at this stage is whether to add Mr Crossley as a party to the proceedings for the purposes of costs only and that depends on whether there is a good arguable case. This is important because CPR rule 48.2 (2) provides that rule 48.2 does not apply when the court is considering whether to make a wasted costs order. I can quite see that in many cases a third party costs order should await the outcome of a wasted costs application. They may be directed against different people and may well involve very different issues. However in this case the respondent is the same and the issues substantially overlap. Putting a third party costs application on hold pending wasted costs would just cause even more delay and even more cost. Bearing in mind the overriding objective to deal with cases justly, to save expense and to ensure that cases are dealt with expeditiously and fairly, in this case if there is as good arguable case then, despite rule 48.2(2), it is appropriate to follow the approach of rule 48.2(1) in parallel with wasted costs.

The law on s51

84. It was common ground that a s51 order is not available against legal representatives acting as such and also that merely acting on a conditional fee agreement did not attract a third party costs order. Of course the defendants submit that that is not what ASC:Law were doing.
85. Mr Tritton relied on passages from R (on the application of Factortame and others) v Secretary of State for Transport, Environment and the Regions (No. 2) [2002] EWCA Civ 932, [2003] QB 381. Lord Phillips MR (giving the judgment of the court) emphasised that there is a good reason why the principles of maintenance and champerty should apply with particular rigour to those conducting litigation, citing the well known passage in Wallersteiner v Moir [1975] QB 373 about contingency fees which ends with: "a legal adviser who acquires a personal financial interest in the outcome of the litigation may obviously find himself in a situation in which that interest conflicts with [his] obligations [as an officer of the court]".
86. Mr Tritton also relied on Dymocks Franchise v Todd [2004] UKPC 39, [2004] 1 WLR 2807 to support his submission that where a non-party is substantially likely to benefit from the proceedings, he should be liable for the costs if such proceedings fail. In the Dymocks case, Lord Brown of Eaton-under-Heywood, giving the opinion of the Privy Council, summarised the applicable principles in paragraphs 25 to 29. I will not set out the whole of that passage but I will set out extracts below:

25. [ …]

1) Although costs orders against non-parties are to be regarded as "exceptional", exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such "exceptional" case is whether in all the circumstances it is just to make the order. It must be recognised that this is inevitably to some extent a fact-specific jurisdiction and that there will often be a number of different considerations in play, some militating in favour of an order, some against.

2) Generally speaking the discretion will not be exercised against "pure funders", described in paragraph 40 of Hamilton v Al Fayed as "those with no personal interest in the litigation, who do not stand to benefit from it, are not funding it as a matter of business, and in no way seek to control its course". In their case the court's usual approach is to give priority to the public interest in the funded party getting access to justice over that of the successful unfunded party recovering his costs and so not having to bear the expense of vindicating his rights.

3) Where, however, the non-party not merely funds the proceedings but substantially also controls or at any rate is to benefit from them, justice will ordinarily require that, if the proceedings fail, he will pay the successful party's costs. The non-party in these cases is not so much facilitating access to justice by the party funded as himself gaining access to justice for his own purposes. He himself is "the real party" to the litigation, a concept repeatedly invoked throughout the jurisprudence […]

87. Mr Tritton placed particular emphasis on an citation by Lord Brown of a judgment of Tomkins J which, although directed to receivers or liquidators and the like, was, he submitted, generally applicable:

4) […] Tompkins J's judgment in Carborundum at p765:

"Where proceedings are initiated by and controlled by a person who, although not a party to the proceedings, has a direct personal financial interest in their result, such as a receiver or manager appointed by a secure creditor, a substantial unsecured creditor or a substantial shareholder, it would rarely be just for such a person pursuing his own interests, to be able to do so with no risk to himself should the proceedings fail or be discontinued. […] "

88. At paragraph 26 Lord Brown then cited extracts from the judgment of Fisher J in the High Court of New Zealand, Arklow Investments Ltd v MacLean (unreported, 19 May 2000). I will take only one paragraph from that:

21. ... [T]he overall rationale [is] that it is wrong to allow someone to fund litigation in the hope of gaining a benefit without a corresponding risk that that person will share in the costs of the proceedings if they ultimately fail.

89. Mr Parker took a point about causation. He detected a submission from Mr Tritton that the Dymocks case might be said to have decided that causation was no longer necessary. Mr Parker submitted that causation was a vital ingredient in the matter and relied on the judgment of HH Judge Peter Coulson QC in Jackson v Thakrar [2007] EWHC 626 (TCC), paragraphs 8 to 20. In that passage Judge Coulson (as he then was) reviewed the authorities on causation in relation to third party costs orders including Hamilton v Al Fayed (No. 2) [2002] EWCA Civ 665. Judge Coulson's conclusions were:

Plainly, in a Section 51 application, what matters is whether the funding provided by the non-party caused the applicant to incur costs which he would not otherwise have incurred. That must be the relevant test on causation. [paragraph 15]

and

If the Section 51 applicant would have incurred the relevant costs in any event, whether the funded party was funded by the non-party or not, then it would be wrong in principle to make a Section 51 order. [paragraph 16]

90. I did not detect the submission from Mr Tritton that Mr Parker was concerned about, but in any event for the purposes of this judgment I will follow Judge Coulson's conclusions.

Good arguable case to join ACS:Law as a party?

91. Mr Parker submitted that:

i) Mr Crossley did not fund the proceedings, he acted under a conventional CCFA.

ii) Mr Crossley did not benefit from the proceedings: (a) he derived no benefit from the CCFA and (b) he derived no benefit from the revenue sharing agreement relating to the letter writing campaign for Media CAT. One reason Mr Crossley did not benefit was because his client lost.

iii) Mr Crossley is unable to give evidence as to control of the proceedings whether substantial or otherwise because to do so would breach Media CAT's privilege, which has not been waived. Therefore he must be given the benefit of the doubt.

iv) Causation is not established.

Evidence

92. In his third witness statement Mr Crossley set out draft accounts and in paragraph 7 he summarised his position. He stated that the business model has been neither profitable nor rewarding for him in any way at all, and that neither himself nor ACS:Law solicitors have funded these proceedings and have not benefited from them. He said the control which ACS:Law has had over these proceedings is only to the extent that any litigation solicitor would have over his litigation client's affairs and no more. He continued "By contrast both the claimant and the various copyright owners that it was representing received considerable income from the business model without any cost to them."
93. This evidence was in reply to Ms Perchal's witness statement. Ms Perchal showed that the SRA had been told by ACS:Law in (I think) the summer of 2009 that the firm had earned a profit of £220,413.59 from this file sharing work. The statement also showed that ACS:Law were reported in the media as having expecting to earn a profit of about £3 Million in 2010/2011 from the work.
94. Despite being at pains to show that he made a loss representing Media CAT, Mr Crossley's Third Witness statement leaves a number of matters unanswered. The SRA figures were not limited to Media CAT but they did include it. Mr Crossley does not aim to reconcile this. Moreover he does not deny the statement reported in the media that he expected to earn £3 Million from this work in 2010/2011.
95. Taking the issues in turn:

i) acting on conventional CCFA

96. There is a good arguable case that Mr Crossley was not acting under a conventional CCFA. At its lowest there is a good arguable case that the terms of the CCFA are not a complete statement of the terms on which ACS:Law were engaged in these actions. Even if the CCFA was not a mere fig leaf (and there is a good arguable case that it is), any damages recovered from the proceedings would be shared as per the Basic Agreements, with 65% to ACS:Law.
97. The legal services provided by Mr Crossley in the proceedings were provided for his own benefit at least as much as for Media CAT's benefit. That is sufficient for this purpose. Whether Media CAT's position as a claimant is purely nominal or not is not the issue. ACS:Law does not have to be the sole beneficiary of the proceedings. A 65% share is sufficient.

ii) did not benefit

98. Whether Mr Crossley in fact made a profit is not the issue. He was entitled to 65% of the damages in any event and there is a good arguable case that all revenues, including the costs, would in fact have been shared as per the Basic Agreements too. In no sense can Mr Crossley be called a "pure funder" of the litigation so as to avoid liability.
99. It also seems to me as separate matter that there is a good arguable case that Mr Crossley's admitted revenue share from the letter writing campaign meant that he stood personally to benefit from success in the proceedings. The causes of action were all the same and victory for Media CAT in one of the court actions would obviously have boosted the revenues from the letter writing campaign.

iii) Mr Crossley's control of the proceedings

100. In my judgment the law does not require control as a prerequisite for liability. I note that in sub-paragraph 3 of the extracts from the Dymocks case Lord Brown referred to a non party who does not merely fund litigation but "controls or at any rate is to benefit from them". The latter is sufficient in this case.
101. I should make clear that I am not making a finding either way in relation to control. It is not necessary to embark on the matter on this occasion.

iv) causation

102. Mr Crossley's position as a beneficiary from these actions and as someone providing legal services for his own benefit (amongst others) derives from the Basic Agreements. The agreements are the means by which Media CAT acquired whatever right they have to bring these proceedings, they appoint Mr Crossley as the retained lawyer and give him 65% of the spoils. The litigation would not have existed without those agreements. The legal services provided by Mr Crossley caused these cases to exist in the first place and caused the defendants to incur all of their costs. None of the defendants' costs would have been incurred otherwise.

Conclusion on s51

103. There is a good arguable case that ACS:Law / Mr Crossley will be liable for the costs of this case and I will add ACS:Law / Mr Crossley as a party to this action for that purpose.