P2P Pre-Settlement Letters In Germany May Have Been Illegal; Lawyer Who Reveals This Threatened With Lawsuit

from the extortion-or-not... dept

There have been plenty of legal questions over the activities of a small group of companies in Europe, including law firm Davenport Lyons, ACS:Law, Logistep and Digiprotect among others — who all seem to work together to purposely put files online that they have licensed, and then send threat letters to the owner of any IP address that connects to them. This leads to a fair number of totally bogus demands for people to pay up to avoid getting sued. Apparently, the business is quite profitable, even as no actual lawsuits have been filed.

Yet, now reader Dan alerts us to the news that, at least in Germany, the pre-settlement letters and relationships between these companies may be entirely illegal. This was discovered due to a recently leaked document — the one that showed how profitable all this was — which also noted that the relationships between the various companies were not based on any direct monetary exchange:

The document states that “the whole project is kind of a joint venture where no party charges the other party with any costs.” The problem with such a set-up is that the pre-settlement offers are usually based on costs incurred by retaining a law office to pursue the claim. File sharers are asked to pay 450 bucks for a porn movie because it costs money to investigate their IP address and send them the cease and desist letter.

However, German law specifically states that these costs can’t be based on the success of the claim. In other words: In order to invoice file sharers for lawyer fees, these fees have to occur and be paid by someone no matter whether a file sharer pays up or not. Invoicing someone for costs that haven’t actually occurred could be seen as fraud.

Oops. After a German lawyer, Thomas Stadler, reviewed all this and posted his analysis saying that the efforts in Germany were clearly illegal under German law (Google translation from the original) , the German lawyer who had sent the original document (the leaked one, detailing how these operations worked), Udo Kornmeier sent him a cease-and-desist letter (again, Google translation from the original), demanding he take down his blog post that showed the whole operation was illegal. Apparently, lawyers who may be breaking the law in Germany don’t like other lawyers exposing them…

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Companies: acs:law, davenport lyons, digiprotect, logistep

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Comments on “P2P Pre-Settlement Letters In Germany May Have Been Illegal; Lawyer Who Reveals This Threatened With Lawsuit”

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17 Comments
more proof they are predators themselved says:

more proof they are predators themselves

lawyers nto knowing what the law was , YEA RIGHT
that should get them disabarred form practicing in that country at min and criminals charges for a breech of public trust at worst. Its liek a fireman knowing during an inspection that somethng has a real bad risk of causing a fire and he knowingly does nothing.

OR a police officer not doing his job
imagine if we all acted the way the copyright industry does OMG
look at greece cause thats were its heading folks

martin says:

He didn’t send a cease-and-desist for posting the stuff online, but apparently for saying that this might be fraud.

Demanding Money from a defendant is only valid in Germany when the costs will be paid by the plaintiff. The company disputes therefore that they demanded money, but instead say they just told the defendant that in a trial, the amount of money would have to be paid.

Sources: (in german, babelfish yourselves :))
http://www.lawblog.de/index.php/archives/2009/11/26/gute-zeichen/
http://www.heise.de/tp/r4/artikel/31/31610/1.html

Matt (profile) says:

Hrm...

My German is rusty, and was never very good. But it is customary for lawyers to advise potential adversaries that their clients are prepared to sue, anticipate doing so, and anticipate that there will be costs associated with doing so that will be born by the other side. It is typical to also state that they would be willing to settle for the costs of such a suit and a cessation of the objectionable conduct. That is decidedly different from saying “we have already incurred $x in attorney fees that you will have to pay if we go to court.”

I can’t tell which of these is going on, here. If the former, then the blog post was probably libelous. If the latter, then the C&D compounds the problem.

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