Golden Eye (International) Ltd v Telefónica UK Ltd

JurisdictionEngland & Wales
JudgeTHE HON MR JUSTICE ARNOLD,MR JUSTICE ARNOLD
Judgment Date26 March 2012
Neutral Citation[2012] EWHC 723 (Ch)
Docket NumberCase No: HC11C03290
CourtChancery Division
Date26 March 2012
Between:
(1) Golden Eye (International) Limited
Claimants
(2) Ben Dover Productions
(3) Celtic Broadcasting Ltd
(4) Easy on the Eye
(5) Dms Telecoms Limited
(6) Gary Baker
(7) Harmony Films Limited
(8) Justin Ribeiro Dos Santos t/a Joybear Pictures
(9) Orchid Mg Limited
(10) Kudetta Bvba
(11) Rp Films Limited
(12) Sweetmeats Productions t/a S.M.P.
(13) Sll Films Limited
(14) Terence Stephens t/a One Eyed Jack Productions
and
Telefónica UK Limited
Defendant
and
Consumer Focus
Intervener

[2012] EWHC 723 (Ch)

Before:

The Hon Mr Justice Arnold

Case No: HC11C03290

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Rolls Building

Fetter Lane, London, EC4A 1NL

Jonathan Cohen (instructed by Wagner & Co) for the Claimants

Guy Tritton (instructed by Consumer Focus) for the Intervener

The Defendant did not appear and was not represented

Hearing date: 9 March 2012

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

THE HON MR JUSTICE ARNOLD MR JUSTICE ARNOLD

Contents

Topic

Paragraphs

Introduction

1

Procedural history

2–9

The Claimants

10–14

The evidence in support of the claim

15–31

The draft order and draft letter

32–34

"Speculative invoicing"

35–37

ACS:Law and Media CAT

38–55

Infringement claims brought by Golden Eye

56–58

Similarities and differences

59–63

The legal context

64–75

CDPA 1988

65

The Enforcement Directive

66

The Human Rights Act 1998

67

The Convention rights

68–69

The Charter of Fundamental Rights of the European Union

70–73

Data Protection Directive

74

Data Protection Act 1998

75

The Norwich Pharmacal jurisdiction

76–83

Is there a duty of full and frank disclosure on a Norwich Pharmacal application?

84–88

Have arguable wrongs been committed against the Claimants?

89–106

Golden Eye's title to sue the Intended Defendants

90–91

Are the agreements between Golden Eye and the Other Claimants champertous?

92–100

The evidence of infringement

101–106

Was O2 mixed up in those arguable wrongs?

107

Are the Claimants intending to try to seek redress for those arguable wrongs?

108–113

Is disclosure of the information necessary for the Claimants to pursue that redress?

114–115

Is the order sought proportionate?

116–146

The correct approach to considering proportionality

117

The Claimants' rights

118

The Intended Defendants' rights

119

The terms of the draft order

120–122

The draft letter

123–130

The claim for £700

131–138

Safeguards suggested by Consumer Focus

139–143

Notification of the Intended Defendants

140

Supervising solicitor

141

Group Litigation Order

142

Test cases

143

An alternative safeguard

144

The claim by Golden Eye and Ben Dover Productions

145

The claim by the Other Claimants

146

Discretion

147

An issue not raised

148–151

Conclusion

152

Introduction

1

This is a claim by Golden Eye (International) Ltd ("Golden Eye") and thirteen other claimants for a Norwich Pharmacal order against Telefonica UK Ltd trading as O2 ("O2"). O2 is one of the six largest retail internet service providers ("ISPs") in the UK. The object of the claim is to obtain disclosure of the names and addresses of customers of O2 who are alleged to have committed infringements of copyright through peer-to-peer ("P2P") filesharing using the BitTorrent protocol. (P2P filesharing using BitTorrent is described in my judgment in Dramatico Entertainment Ltd v British Sky Broadcasting Ltd [2012] EWHC 268 (Ch) at [19-[20].) For reasons that I will explain, the claim raises fundamental questions as to the operation of the Norwich Pharmacal regime, the legitimacy of so-called "speculative invoicing" and how to balance the rights of copyright owners and consumers.

Procedural history

2

Golden Eye has previously obtained similar orders against two other large ISPs, the first against British Telecommunications plc ("BT") granted by Proudman J in October 2009 and the second against British Sky Broadcasting Ltd granted by Vos J on 4 February 2010.

3

The present claim was made by a Part 8 Claim Form issued on 23 September 2011. The Claim Form was issued by Golden Eye itself, rather than by solicitors instructed on its behalf. The application was supported by a witness statement of Julian Becker, a director of Golden Eye, dated 12 September 2011. In his statement, Mr Becker said that O2 had been put on notice of the claim and had stated through its solicitors (Baker & McKenzie LLP) that it did not oppose the making of the order sought provided that the order was in the terms approved by Baker & McKenzie on O2's behalf.

4

In a covering letter dated 20 September 2011 Golden Eye stated:

"We are the First Applicant and act for the Second – Fourteenth Applicants in this application.

It may be somewhat unusual for the Applicants to apply on their account. However, there has recently been a certain amount of publicity associated with this type of claim (ACS Law; Davenport Lyons). We therefore believe that we will be best served acting for ourselves."

The letter went on to request that the claim be considered on paper, and enclosed a copy of the skeleton argument which had prepared by counsel instructed on its behalf on the application against BT.

5

On 7 October 2011 Baker & McKenzie filed an acknowledgement of service on behalf of O2 stating that O2 did not intend to contest the claim.

6

On 18 November 2011 the parties were given notice of a disposal hearing before Chief Master Winegarten on 6 December 2011. On 28 November 2011 Baker & McKenzie wrote to the Chief Master to confirm that O2 did not oppose the making of an order in the terms submitted by Golden Eye, and therefore did not intend to attend the hearing. At the hearing on 6 December 2011 Mr Becker attended on behalf of the Claimants. The Chief Master raised a number of questions about the proposed order, which he asked Mr Becker to relay to Baker & McKenzie. Mr Becker duly did so, and on 14 December 2011 Baker & McKenzie wrote to the Chief Master answering his questions. In the letter Baker & McKenzie stated that, prior to issuing the Claim Form, Golden Eye had provided O2 with a draft of the proposed order and that Baker & McKenzie had made amendments to the draft. A number of amendments were identified and explained. The letter reiterated that O2 did not oppose the making of an order in that form. Having considered the letter, the Chief Master decided to refer the claim to a judge.

7

On 16 January 2012 I directed that (1) the claim be listed for a hearing, (2) the Claimants file and serve upon O2 a copy of the tracking report upon which they relied (as to which, see below) and (3) that the Claimants serve a copy of the claim and supporting evidence upon Consumer Focus in order that Consumer Focus could consider whether to make representations on behalf of the persons who would be identified if the order is granted ("the Intended Defendants"). The reason why I made the third direction was that I was concerned that the persons with a real interest in opposing the making of an order, or at least in seeking alterations to the terms of the proposed order, were the Intended Defendants rather than O2, but that there was no practical way in which to enable any Intended Defendant to do so. I shall return to this point below.

8

Consumer Focus is a trading name for the National Consumer Council of England, Wales and Scotland. Consumer Focus is a statutory body created by the Consumers Estate Agents and Redress Act 2007. It represents the interests of consumers, particularly low income and vulnerable consumers. It has been recently been active in the field of copyright. For example, in January 2011 Consumer Focus published a consultation document entitled "Competition, copyright and collective rights management" inviting comments from the public to inform its intended submission to the Hargreaves Review of IP and Growth; on 1 March 2011 it duly made a submission to the Hargreaves Review; on 8 November 2011 it jointly organised with PICTFOR (the Parliamentary, Internet, Communications and Technology Forum) a panel discussion of some of the Hargreaves Review's recommendations entitled "Copyright collecting societies: does the UK need minimum standards"; and on 21 February 2012 it jointly organised with the Creators' Rights Alliance a one day seminar entitled "Consumers' and creators' common ground".

9

Golden Eye duly sent the papers to Consumer Focus, and Consumer Focus applied to intervene in the proceedings. There being no rule in CPR applicable to intervention in proceedings before this Court, the application was made informally under the Court's inherent jurisdiction. Although initially resistant to the application to intervene, the Claimants sensibly did not in the end resist the application provided that they were given permission to file supplementary evidence to deal with certain points raised by Consumer Focus. Accordingly, I granted Consumer Focus permission to intervene on those terms. As counsel for Consumer Focus made clear, Consumer Focus undertook the task of presenting adversarial argument on behalf of the Intended Defendants, rather than merely assisting the Court with legal submissions as an amicus curiae (friend of the Court). I am grateful to it for doing so.

The Claimants

10

The Claimants divide into two groups. The first group consists of Golden Eye and Ben Dover Productions. Ben Dover Productions is a partnership between Lindsay Honey and Linzi Drew Honey. Lindsay Honey is also a director of Golden Eye. Under the pseudonym Ben Dover, he directed, produced and starred in a series of...

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