Davenport Lyons, the law firm which first introduced 'speculative invoicing' of alleged file sharers to the UK, has found two of its solicitors banned from practising for three months and fined by the SRA over their part in what is being recognised as a money-making scam.
Current firm partner David Gore and former partner Brian Miller - who left the company before the Solicitor's Regulatory Authority's decision was made - have been ordered to pay £20,000 each and joint interim costs of £150,000 for their part in the practice of 'speculative invoicing'.
Popularised by one-man-band legal outfit ACS Law - the founder of which, Andrew Crossley, pleaded poverty from his giant house and expensive car in order to have his fine from the Information Commissioner slashed by a whopping 99.5 per cent - 'speculative invoicing' is the name given to the practice of sending threats of legal action to users based on 'evidence' that they had been downloading copyrighted material from file-sharing networks.
Although Davenport Lyons began by representing mainstream clients like Atari and music labels, investigations by the consumer watchdog Which? revealed that many of those receiving the letters - which demanded hundreds of pounds with the threat of expensive legal action if the recipient didn't pay up pronto - were innocent. The PR backlash following this revelation lead to most mainstream clients dropping the firm, and Davenport Lyons itself switching briefly to representing 'adult entertainment' outfits before exiting the business.
ACS Law was one of the few law firms in the UK to pick up the baton, taking the business model Davenport Lyons had helped to create and running with it. With no mainstream clients willing to touch the concept, Crossley was left with those adult entertainment clients that Davenport Lyons had left in the lurch when it decided to cease sending out threatening letters.
While ACS Law's part in the speculative invoicing boom is well known, Davenport Lyons - as one of the first to get involved in the practice and also one of the first to exit the arena in a cloud of bad PR - has been relatively successful at flying under the radar, avoiding such tactics as webserver attacks that saw ACS Law's email database leaked to the public. That didn't stop Which? compiling a list of cases and filing a formal complaint with the SRA, however.
According to a report in the Law Gazette, both Gore and Miller have been found guilty of six breaches of the SRA's Code of Conduct by a hearing of the Solicitors Disciplinary Tribunal. The SDT hearing found the pair guilty of targeting innocent people in an attempt to increase the profitability of the enterprise, ignoring the impact of the letters on both the recipients and their own clients in order to chase yet more money.
The hearing found Gore and Miller guilty of using their positions as solicitors to "take or attempt to take unfair advantage of other persons, being recipients of letters of claim, either for their own or for the benefit of their clients."
The company's business development director, Dawn McEwen, indicated that Davenport Lyons believes the decision to be incorrect, and that both Gore and Miller will be appealing. "We consider the decision of the Solicitors' Disciplinary Tribunal and sanctions imposed against David Gore and former partner, Brian Miller, are totally unjustified," she told thinq_ via email today.
"Davenport Lyons is a leading law firm with highly specialist intellectual property lawyers," McEwen further claimed. "We were instructed by the owners of intellectual property rights in music, film and games to help them curtail the significant losses they were suffering as a result of the unlawful file-sharing of their products. The steps we took on behalf of our clients were for the protection of their legitimate legal rights. We consider that we acted in our clients’ best interests at all times.
"We wholeheartedly support David and Brian’s intention to appeal both the Solicitors' Disciplinary Tribunal’s original decision and the resulting suspension and fine."
The SDT's decision is suspended for 21 days, to allow the pair time to appeal.