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The Liability of Internet Intermediaries The Liability of Internet Intermediaries

Contents

The Liability of Internet Intermediaries The Liability of Internet Intermediaries
1

Costs in civil litigation 18.04

1.1

The general rule 18.04

1.2

Exceptions to the general rule 18.09

1.3

Limits on ordinary costs orders 18.16

2

Claims against non-wrongdoers 18.31

2.1

Historical overview 18.33

2.2

Norwich Pharmacal disclosure 18.38

2.3

Mareva injunctions 18.52

3

Costs in particular cases 18.58

3.1

Statutory disclosure 18.59

3.2

Copyright infringer lists 18.63

3.3

Data protection 18.65

3.4

Website blocking 18.69

3.5

De-indexing 18.84

3.6

Data retention 18.91

4

Alternative dispute resolution 18.96

18.01 Preceding chapters have examined the range of measures which internet intermediaries may be compelled to implement, whether as a result of a court order, an administrative decision, or pursuant to a statutory scheme or code of conduct. The cost and disruption caused by the implementation of such measures vary considerably with the nature of the measure, what it obliges the service provider to do, the scale of the problem, and the particular characteristics of the implementing party. Individual measures may be relatively inexpensive to adopt in a single case, but their aggregate costs over a large number of such cases—and the resulting administrative, legal, and technical overheads—can be very substantial.

18.02 This chapter considers the liability of internet intermediaries to pay the costs associated with injunctive remedies and of proceedings related to their services. The allocation of costs can be of particular importance where intermediaries are not alleged to be wrongdoers, since services without a direct stake in the outcome of litigation are even less likely to participate in proceedings if they risk an adverse costs order for doing so. The current approach to assessing costs generally takes into account whether an order is being made against an innocent party, but the treatment of internet intermediaries has become progressively more unclear. Inconsistent rules are applied in different areas, leading to costs regimes which are unprincipled and difficult to predict. This indirectly discourages services from contesting borderline or even unmeritorious claims for injunctive relief.

18.03 Section 1 begins by explaining the general rule that costs follow the event, and its application to litigation involving internet intermediaries. It also considers two limits upon that principle which derive from European Union law. Section 2 considers the distinction drawn in equity between costs orders against wrongdoers and those against innocent parties. Section 3 summarises the different approaches to costs in specific areas of law.

18.04  General discretion as to costs. The starting point is that the civil division of the Court of Appeal, the High Court, and any county court, has complete discretion as to ‘the costs of and incidental to all proceedings’.1 This power to regulate the payment of costs is part of the courts’ inherent jurisdiction to regulate their procedures, and is confirmed by (rather than derived from) section 51 of the Senior Courts Act 1981. The general power includes ‘full power to determine by whom and to what extent the costs are to be paid’.2

18.05  The ‘follow the event’ principle. The general rule3 in English civil litigation is that costs follow the event. That is to say, the losing party will ordinarily be ordered to pay the costs of the winning party.4 Similarly, costs incidental to the proceedings (such as the costs of complying with an injunction) will, absent any order to the contrary, be borne by the party having to comply with the injunction. The general rule applies whether or not the defendant is an intermediary or another kind of defendant, and regardless of whether he is an innocent party despite relief being granted to a claimant. However, the court has a virtually unlimited discretion to determine when, by whom, and in what amount costs are payable. This means that the position, blameworthiness, and other conduct of the losing party are potentially relevant matters to be taken into account when assessing costs.

18.06  Costs of the action and costs of compliance. Despite the broad ambit of the courts’ powers to regulate costs, care should be taken to distinguish between the costs of proceedings and the costs of complying with an order. The costs of proceedings are sometimes orders of magnitude greater than the costs of implementing an injunctive remedy, but it should be borne in mind that they will not necessarily be treated in the same way.

18.07 Implementation costs vary considerably depending on the nature of the relief being granted. At one extreme, removing a file from a hosting service, or de-indexing a URL from a search engine, may be relatively inexpensive and represent perhaps a few hours of administrative burden imposed upon a respondent. Conversely, a new type of blocking injunction, or an order requiring ongoing compliance or monitoring, may require a service provider to make a substantial capital investment in network hardware and software configuration, or to divert resources or employ additional personnel in order to comply.

18.08 This section provides a brief overview of the general principles that apply in England and Wales in cases commenced from 1 April 2013.5 Detailed coverage of that costs regime is left to specialist works on civil procedure.6

18.09 The principle that costs follow the event is only a starting point. Courts will readily depart from that approach in appropriate cases, for the reasons explained by Lord Woolf MR in AEI Rediffusion Music Ltd v Phonographic Performance Ltd:

the ‘follow the event principle’...will be a starting point from which a court can readily depart....The [new Rules] require courts to be more ready to make separate orders which reflect the outcome of different issues....It is now clear that a too robust application of the ‘follow the event principle’ encourages litigants to increase the cost of litigation, since it discourages litigants from being selective as to the points they take. If you recover all your costs as long as you win, you are encouraged to leave no stone unturned in your effort to do so...7

18.10 In determining the amount of recoverable costs, the court has a very wide ambit of discretion. The Civil Procedure Rules specify a number of mandatory factors which must be considered, including the conduct of all the parties, the importance of the matter to all the parties, and the particular complexity of the matter or the difficulty or novelty of the questions raised.8

18.11  Possible outcomes. Broadly three scenarios may be envisaged. First, where an intermediary prevails in civil litigation (whether as claimant or defendant), the starting point is that such a party is entitled to be paid its costs according to the applicable scale, and subject to the usual limitations on the amount of recoverable costs. Second, where an intermediary loses in litigation and is held to be a wrongdoer, ordinary principles are likely to apply in the absence of exceptional circumstances.

18.12 Third, where an internet intermediary succeeds as a defendant to the extent that no monetary remedy is ordered (or indeed sought) against it, but loses to the extent that an injunctive remedy is granted, a number of approaches to costs are possible. If the defendant is an innocent party (a non-wrongdoer) then this is a relevant factor to be taken into account when assessing whether, or by whom, costs should be paid. Similarly, if the defendant is culpable or has behaved unreasonably in refusing to provide the remedy sought by the claimant voluntarily, then that may be relevant. Additional factors are discussed later in this chapter.

18.13  Costs deter parties from participating in proceedings. Exposure to adverse costs orders operates as a significant deterrent against defending or even attending proceedings. Where a service provider is not alleged to be a wrongdoer, and so has no direct interest in the outcome of litigation, the expected cost of litigation is likely to far exceed the reputational or other benefits to the service provider of opposing the making of an order if they may be ordered to pay the other party’s costs.

18.14  Costs affect judicial oversight of claims. Costs rules therefore indirectly influence whether or not claims related to internet intermediaries will be judicially determined. If the ex ante probability of paying costs in excess of the expected benefit of participating in proceedings is substantial enough, a rational internet intermediary will accede to the claimant’s request voluntarily (eg by giving voluntary disclosure or removing content upon request). Private ordering of this kind can desirable in obvious cases. However, this outcome may be undesirable if: (1) it would lead to less reliable outcomes; (2) service providers would still incur the same compliance costs (eg because the same records would still need to be identified and disclosed); or (3) it would require service providers to exercise quasi-judicial functions in determining the lawfulness of material.

18.15 Courts should therefore be mindful of the complex incentive structure underlying costs rules in civil litigation, and in particular the desirability of adopting costs rules which incentivise judicial supervision of decisions affecting the fundamental rights of third parties (such as internet users or website operators). Internet intermediaries have limited incentives or opportunity to investigate claimants’ claims or third parties’ rights fully. As a result, difficult questions of public policy or important balancing exercises may be left unexamined.

18.16 Costs recoverable against internet intermediaries are limited by the principle of proportionality, and by the other upper limits set out in the Enforcement Directive. Those latter limits are introduced in chapter 13.9 The following sections identify how these limits are likely to apply to costs orders. The potential applicability of safe harbours is also discussed.

18.17 Where costs are payable on the standard basis, they will be recoverable only to the extent costs are ‘proportionate’ to the matters in issue.10 The test for proportionality of costs is set out in rule 44.3(5):

Costs incurred are proportionate if they bear a reasonable relationship to—

(a)

the sums in issue in the proceedings;

(b)

the value of any non-monetary relief in issue in the proceedings;

(c)

the complexity of the litigation;

(d)

any additional work generated by the conduct of the paying party; and

(e)

any wider factors involved in the proceedings, such as reputation or public importance.

18.18 To the extent there is any doubt about whether costs were reasonable and proportionate, it is resolved in favour of the paying party.11 In cases involving internet intermediaries, the same principles would apply as in any other case. Of particular significance may be item (b)—the value of non-monetary relief, such as blocking injunctions or disclosure—and certain wider factors, such as the defendant’s status as an innocent party, may also bear on the question of whether costs are proportionate to the matters in issue as between the claimant and the intermediary.

18.19  Not unnecessarily costly. In cases involving intellectual property rights, article 3(1) of the Enforcement Directive introduces a general limitation on recoverable costs. That provision states:

Member States shall provide for the measures, procedures and remedies necessary to ensure the enforcement of the intellectual property rights covered by this Directive. Those measures, procedures and remedies...shall not be unnecessarily complicated or costly...

18.20  Applicability to remedies. It is apparent that this limitation applies with equal force to ‘measures, procedures and remedies’ that are provided for under national law. It therefore seems arguable that article 3(1) requires the cost of proceedings not to be ‘unnecessarily complicated or costly’, just as the costs of relief must itself be within those limits. However, this point has not yet been determined.

18.21  Filtering systems. The Court of Justice has held that article 3(1) applies in favour of both the holder of an intellectual property right and the other parties to the action. In Scarlet Extended SA v Société Belge des Auteurs, Compositeurs et Éditeurs SCRL (SABAM), the Court held, in the context of a national blocking injunction requiring the respondent ISP to adopt a universal filtering and monitoring system for all customers’ internet traffic:

such an injunction would result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual property rights should not be unnecessarily complicated or costly...12

18.22 Similar statements may be found elsewhere in the jurisprudence of the Court of Justice, including in the context of a marketplace operator (eBay) being required to carry out general monitoring of customers’ data13 and a host being ordered to install a preventative filtering system to identify and remove copyright works stored on its servers.14

18.23  Some costs may be imposed. The dividing line remains unclear between costs which are not costly, or which are necessarily costly, and those which are ‘unnecessarily’ costly. It appears that a measure may permissibly entail some cost for the service provider. In UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH, the Court of Justice held that a national website blocking injunction was compatible with article 3(1) despite ordering the respondent ISP ‘to take measures which may represent a significant cost for him, have a considerable impact on the organisation of his activities or require difficult and complex technical solutions’.15

18.24  Costs and proportionality. In Cartier International AG v British Sky Broadcasting Ltd, Arnold J reviewed these authorities and held that the ‘cost and complexity’ limitations in article 3(1) are simply ‘factors to be taken into account in assessing the proportionality of such an injunction’.16 As is discussed in chapter 13, the cost of a measure will be an important consideration when deciding whether or not it is proportionate. In that case, the evidence was that the claimants had identified some 239,000 potentially infringing websites, of which 46,000 were awaiting enforcement action.

18.25  Assumption of costs by claimant. Each of these decisions was directed to the costs of implementing measures in circumstances where the national court had ordered those costs to be borne by the intermediary. However, the opinion of the Advocate General in UPC Telekabel suggests that a remedy which might otherwise be excessively costly or disproportionate could be made lawful if the cost burden were borne partially or wholly by the claimant:

Should a specific measure prove to be disproportionate in that regard in view of its complexity, costs and duration, it must be considered whether proportionality can be established by a partial or full assumption of the cost burden by the rightholder.17

18.26  Cumulative effect of remedies. It is also clear that the cost and complexity of measures ordered against internet intermediaries should be considered both individually and cumulatively, in light of the anticipated numbers of similar such remedies that are likely to be granted against the service provider in the future. In UPC Telekabel, the Advocate General explained, in the context of website blocking injunctions, that:

it must be borne in mind that the blocking measure in question will very probably not be a one-off blocking measure against the defendant. Rather, the court weighing these factors must assume that it may be a test case and in future numerous similar cases against every ISP may be dealt with before the national courts, so that numerous similar blocking injunctions may arise in future.18

18.27  Summary. The preceding paragraphs may be summarised as follows. In cases involving intellectual property rights, the global cost of a remedy (and, arguably, of the action in which it was obtained) must not be disproportionate having regard to all the circumstances, including the likely aggregate costs of future such remedies, the degree of impairment of the paying party’s economic resources, and the overall magnitude of the costs relative to the benefits of the remedy.

18.28 As noted in chapter 12,19 it is unsettled whether (and to what extent) safe harbours apply to exclude an award of costs against an information society service provider who falls within a safe harbour. On one view, costs are procedural and so are left to national law. However, given that they are an order to pay money (or to bear implementation costs without recompense) they could also be considered a substantive component of relief, especially if the claim is for an injunction only. On the other hand, the safe harbour provisions of the E-Commerce Directive expressly preserve the availability of injunctions against intermediaries, and make no express provision for the costs of such injunctions.

18.29 Similarly, it is unclear whether or not a service provider who is served with proceedings and then unsuccessfully defends them has received actual knowledge of unlawful activity sufficient to deprive it of protection under the storage safe harbour as at the date when the costs order is made. If the safe harbour would otherwise apply to costs at the commencement of proceedings, then such an approach would effectively deprive the safe harbour of any meaningful operation, since any order of costs could normally be made only after notice of the proceedings had been given.

18.30 It remains an open question whether or not safe harbour limits would preclude an award of costs against a qualifying service provider at all. It is suggested that the policy embodied in the safe harbours is at least a relevant matter to be taken into account when assessing costs under rule 44.2 of the Civil Procedure Rules.

18.31 English law sometimes approaches costs orders against non-wrongdoers in a manner that departs from the ‘costs follow the event’ principle. The two most obvious circumstances in which this occurs are Norwich Pharmacal disclosure and Mareva orders against innocent third parties, such as financial institutions. These exceptions, it is suggested, reflect an important public policy that innocent parties should not be liable to pay costs.

18.32 The following sections consider the development of costs rules in claims involving non-wrongdoers. These principles provide useful, albeit largely untested, guidelines for the treatment of costs in claims involving internet intermediaries who are not alleged to be wrongdoers.

18.33 In Norwich Pharmacal Co v Commissioners of Customs and Excise, Lord Reid commented that the defendant should ordinarily be reimbursed for the cost of contesting disclosure, it being desirable to have the issue determined judicially:20

If the respondents have any doubts in any future case about the propriety of making disclosures they are well entitled to require the matter to be submitted to the court at the expense of the person seeking the disclosure. The court will then only order discovery if satisfied that there is no substantial chance of injustice being done.21

18.34 Lord Cross articulated a similar principle, stating that in all but the most obvious of cases, the respondent would be justified in asking the Court to rule on the availability of disclosure and the applicant should be ordered to bear the full costs of the application and any expense incurred in providing the information:

in any case in which there was the least doubt as to whether disclosure should be made the person to whom the request was made would be fully justified in saying that he would only make it under an order of the court. Then the court would have the right to decide whether in all the circumstances it was right to make an order. In so deciding it would no doubt consider such matters as...whether the giving of the information would put the respondent to trouble which would not be compensated by the payment of all expenses by the applicant. The full costs of the respondent of the application and any expense incurred in providing the information would have to be borne by the applicant.22

18.35 In the result, the respondents were entitled to submit the application to the court and were granted their costs up to the date of the trial judgment. However, in the appeals the respondents put their case too high, and so no order was made as to those costs. The decision on costs was unanimous.23

18.36 It has not always been clear that a claim founded under the equitable protective jurisdiction carries with it an entitlement for an innocent respondent to recover all its costs and expenses. The historical basis of the Norwich Pharmacal jurisdiction was the equitable bill of discovery. A non-party named in a bill of discovery was entitled to recover costs,24 because such as person was essentially in the position of someone called upon to answer a subpoena. This reflected the policy that costs should be paid not by an innocent third party but by the ultimately unsuccessful party (be that the claimant or the defendant) in the substantive proceedings.

18.37 However, in Upmann v Elkan, the trial judge found for the plaintiff and ordered disclosure, but—although the applicants undertook to pay the costs of the respondent dock company—the Court appears to have made no order as to costs,25 meaning that the forwarding agents were required to bear all costs of disclosure and ongoing monitoring of future cigar shipments. To the extent that Elkan decided the point (it is submitted not at all),26 this position was effectively reversed by Norwich Pharmacal.

18.38Totalise is considered the modern authority on costs in Norwich Pharmacal applications.27 There the respondent website operator (‘Interactive’) initially refused disclosure but adopted a ‘purely neutral’ position at trial.28 The trial judge considered that it was wrong for Interactive to oppose the order and awarded costs against it. Appealing on the issue of costs, Interactive successfully argued that an adverse costs order should not be made where an intermediary: (1) reasonably and genuinely doubted its obligation to disclose the information; (2) faced liability or other damage if voluntary disclosure was given; or (3) could identify a third party’s legitimate interest which disclosure might infringe.29 As Aldous LJ explained:

the defendant, whether it be a web provider, Customs and Excise, a telephone company or a bank, does not normally resist the order being made. Such defendants have become mixed up in tortious acts and are only concerned that duties and rights...are considered by the court. It is for the applicant to satisfy the court that the order should be made, not for the defendant to take a view which could be wrong.30

18.39 By analogy with the rules governing pre-action disclosure, Aldous LJ held that, in general, costs incurred should be recovered from the primary tortfeasor rather than from an innocent party such as an intermediary. This was because Norwich Pharmacal applications are not akin to ordinary adversarial proceedings, since the unsuccessful party will usually be innocent of any wrongdoing (unlike the unsuccessful party in ordinary adversarial proceedings).

18.40  The starting point. The correct order will, of course, depend upon all the circumstances and the Court of Appeal recognised that the circumstances may sometimes require a different order. However, in a normal case, the applicant ‘should be ordered to pay the costs of the party making the disclosure, including the costs of making the disclosure’.31 This makes clear that the normal approach encompasses both the costs of the action and the costs of implementing the measure ordered by the Court.

18.41  Relevant criteria. Aldous LJ set out five criteria that can be used to determine whether a given case falls into the ‘normal’ approach outlined in the preceding paragraph. These criteria are not cumulative; any one of them may be a sufficient reason for ordering the applicant to bear the costs, but that would entirely depend upon the circumstances in question. The criteria are:

(a)

whether the party required to make the disclosure had a genuine doubt that the person seeking the disclosure was entitled to it; or

(b)

whether that party was under an appropriate legal obligation not to reveal the information, or where the legal position was not clear, or the party had a reasonable doubt as to the obligations; or

(c)

whether that party could be subject to proceedings if disclosure was voluntary; or

(d)

whether that party would or might suffer damage by voluntarily giving the disclosure; or

(e)

whether the disclosure would or might infringe a legitimate interest of another.32

18.42 It should be pointed out that these five criteria appear to have been mentioned and adopted in Totalise only because they were the factors submitted by the appellant in that case. There is therefore no reason to suppose that they are exhaustive or dispositive.

18.43 The only example given in Totalise of a scenario in which the respondent would be required to bear its costs is where it is ‘implicated in a crime or tort or seeks to obstruct justice being done’.33 There being legitimate doubts about Interactive’s obligation to give disclosure and the weight to be accorded to the anonymous author’s privacy, costs were awarded against the claimant. Future applications involving the same subject matter would presumably carry greater legal certainty and may lead to a different costs order.

18.44  Carriers. In Smith, Kline and French Laboratories Ltd v R D Harbottle (Mercantile) Ltd,34 British Airways carried a patented medicament on consignment for the other defendants. The claimants obtained an interim injunction prohibiting delivery. The Court likened the airline’s position to a ‘mere carrier’ or warehouseman and held that, as an innocent non-infringer, British Airways was entitled to payment of its costs and carriage expenses.35

18.45 In Harbottle, British Airways had been joined as a defendant under the equitable protective jurisdiction for storing the infringing goods in its warehouses: ‘but the corollary of that is that the party joining the defendant against whom he seeks the interlocutory relief pays the expenses’.36 This was despite an injunction being ordered against the airline.

18.46 In Miller Brewing Co v Mersey Docks and Harbour Co,37 Neuberger J applied the traditional approach to a case in which statutory delivery up was sought under section 19 of the Trade Marks Act 1994 against a third party bailee who had counterfeit goods in its possession. In that case, the claimant succeeded in obtaining an order for delivery up against the defendant docking company, but nonetheless ordered the claimant to pay the costs of the action. It was common ground that the cost of delivery up itself should be paid by the claimant.38

18.47 Although there is widespread recognition that it would be inappropriate to order costs against a non-wrongdoer in a variety of circumstances in equity, it is not yet clear whether there exists a general principle that non-wrongdoers should be entitled to their costs of complying with an order. It is suggested that such a development would be welcome, for a number of reasons.

18.48 First, an innocent third party, who is not alleged to have done anything wrong, should not be penalised for seeking to have the claimant’s allegations tested in court. This is consistent with the view that equitable remedies, such as disclosure and other classes of injunctions, should reflect principles of basic fairness and should not require an innocent party to bear a financial burden in the absence of wrongdoing by them.

18.49 Second, requiring the claimant to bear the costs of an internet intermediary would deter unmeritorious applications and place an indirect limit on the volume of such applications which can be made by a single claimant.

18.50 Third, service providers are likely to take greater care in verifying and responding to an application if they know they will be reimbursed for the trouble. This reduces the risk of secondary harms, such as misidentification (or incomplete selection) of disclosable data.

18.51 Fourth, a clear rule would encourage claimants to offer appropriate undertakings as to costs, which would reduce the need for a costly hearing. Alternatively, the Court may be able to reduce the costs of compliance through active case management; for example, by consolidating related actions, as occurred in Media CAT, or by confining the scope of relief.

18.52  The normal cross-undertaking. Where a freezing order is sought and obtained by an applicant in the course of proceedings, the applicant is ordinarily required to give undertakings to protect any innocent third parties who may suffer loss as a result of the grant of the injunction (whether or not rightly granted). The applicant is thereby required, as a matter of practice, to undertake to pay the costs and expenses of third parties involved in responding to and implementing the order, most commonly banks and other payment intermediaries.

18.53 This approach is reflected in paragraph 5.1A of Practice Direction 25A, which requires the Court to consider whether any undertakings are required to protect persons other than the respondent to an interim application. That paragraph states:

...When the court makes an order for an injunction, it should consider whether to require an undertaking by the applicant to pay any damages sustained by a person other than the respondent, including another party to the proceedings or any other person who may suffer loss as a consequence of the order.

18.54 In the model freezing order provided with that Practice Direction, the undertakings that the applicant must give include the following:

The Applicant will pay the reasonable costs of anyone other than the Respondent which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent’s assets and if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make.39

18.55  Expenses distinguished from loss. Although the model order provides for broad cross-undertakings, it is not an absolute requirement. In Financial Services Authority v Sinaloa Gold plc, the Supreme Court held that there was no ‘general rule’ that a public authority should be required to give a cross-undertaking in respect of all loss suffered under a freezing order by the respondent or by third parties.40 However, the same rationale does not apply to a cross-undertaking given in respect of third parties’ expenses in private litigation. The Court distinguished between cross-undertakings for loss and those for expenses.41 The latter, it seems, will normally be justifiable. As Lord Mance JSC explained:

A cross-undertaking in relation to third persons protects against the event that an innocent third person, without involvement in whatever breach of the law is alleged against the defendant, suffers loss or expense through the grant of the injunction, whether this should or should not have occurred. In either case, therefore, it is loss caused by the grant of an injunction in circumstances where the person incurring the loss is essentially innocent that is covered by the cross-undertaking.42

18.56 These cases confirm that the essential purpose of requiring a cross-undertaking from an applicant for a Mareva injunction is to protect innocent third parties from the expense of complying with an injunction made against them. Since the beginning of the Mareva jurisdiction, the courts have been concerned to protect the position of innocent third parties who are served with such an order. In one early case, Kerr LJ explained:

Where the effect of service of the injunction on the third party substantially interferes with the third parties’ business, the rights of the third party must in my view always prevail over the desire of the plaintiff to secure the ultimate recovery of debts or damages from the defendant with which the third party is in no way concerned.43

18.57 In Banco Nacional de Comercia Exterior SNC v Emprese de Telecommunicationes de Cuba SA, the Court of Appeal explained that the need for a cross-undertaking would only be dispensed with in ‘exceptional cases’, such as where the third party is not innocent.44 This indicates that the hallmark of the indemnity afforded under a cross-undertaking is innocence.

18.58 This section considers the particular costs rules applicable to actions against internet intermediaries and the regulatory duties owed by such parties. These rules are specific to particular doctrines, remedies, and regulatory schemes and are therefore considered separately.

18.59 The general rule is that non-party and pre-action disclosure must be paid for by the applicant.45 This includes the costs both of the application and of complying with any order made on the application. The Court may make a different order having regard to all the circumstances, including: (1) the extent to which it was reasonable for the service provider to oppose the application; and (2) whether the applicant complied with the pre-action protocol.

18.60 The starting point is therefore that internet intermediaries who are ordered to give statutory disclosure are entitled to be paid all their costs of dealing and complying with the application. It is suggested that a contrary order should be made only where the respondent has acted in a way which is obviously unreasonable; for example, by opposing disclosure in circumstances where a very similar order has already been made against another service provider, by participating in the primary wrongdoing, or by obstructing or failing to give proper disclosure.

18.61 Contrary orders under rule 46.1(2) are likely to be confined to exceptional cases. This is because the jurisdictional pre-conditions set out in rules 31.16 and 31.17 require qualitative assessments to be made of the particular circumstances of ongoing or pending proceedings, and to conduct a balancing exercise between the applicant’s fundamental rights (in particular under article 6 of the Convention, and in relation to vindication for the primary wrongdoing) and those of the affected data subjects under article 8. The intended respondent will not normally be in a position to make such assessments. Additionally, the rights of innocent third parties may be implicated by disclosure in ways which make it appropriate for the matter to be determined judicially.

18.62  Possible orders. Examples of costs orders within the Court’s discretion are orders that the respondent bear its own costs or pay some or all of the costs of the application or of giving disclosure. Alternatively, if the need for disclosure was caused by the primary wrongdoer himself failing to give proper disclosure, it may be appropriate for the costs of disclosure to be paid by that party, or to be reserved until trial in the main proceedings.

18.63 Internet service providers’ enforcement costs under the Digital Economy Act 2010 are apportioned 75 per cent to copyright owners and 25 per cent to ISPs.46 This distribution reflects a partial compromise between the ‘polluter pays’ principle—the idea that ISPs have been enriched by the stronger demand for bandwidth supposedly catalysed by the availability of infringing material—and the ‘beneficiary pays’ principle, which stresses that property owners should bear the costs of enforcing their private monopolies.47 Only copyright owners who have paid their financial contributions to the scheme may make requests under it.48

18.64 However, it appears that a party who would otherwise be a qualifying copyright owner but has not paid their share of the costs could nevertheless obtain Norwich Pharmacal disclosure of substantially the same material from an ISP, subject to paying the costs of that application, so it is unclear how effective costs-sharing will be in practice.

18.65  Requirements of EU law. The Data Protection Directive does not specify whether or not a service provider bears the cost of processing a request for removing, rectifying, or blocking access to personal data. That is properly a question for national law. Although recital (30) of the Directive refers to the ability of a data subject to object to the processing of his personal data ‘at no cost and without having to state his reasons’, this is properly understood as a reference to article 14(b), which requires member states to make available the right to object to direct marketing ‘on request and free of charge’. That, unlike articles 12(b) or 14(a), is an absolute right.

18.66  Transposition in the United Kingdom. The Data Protection Act 1998 is silent as to whether a data controller may charge a fee to respond to removal requests or notices of objection which require manual intervention to remove personal data. Certain provisions of the Act require information to be made available to a person freely, such as section 24(1). Other provisions, such as section 7(2)(b), make data subjects’ rights conditional upon payment of a fee, up to a prescribed maximum, subject to exceptions. Conversely, the right of removal provided for by section 14 makes no provision with respect to fees. Accordingly, it does not seem legitimate for a data controller to make the exercise of the right conditional upon payment of a fee—especially since ongoing processing of the data may be (or may become) unlawful.

18.67 However, where there has been no contravention of the data protection principles by the data controller, but the data controller legitimately seeks to have the question of removal determined by a court (eg because it is unsure about the proper outcome of the balancing exercise), the controller is properly to be regarded as an innocent party. Such a proceeding is not an ordinary adversarial proceeding but is analogous to an application for Norwich Pharmacal disclosure. As such, it appears arguable that the service provider should be entitled to recover its costs of having the matter heard and implementing any order.

18.68 As noted in paragraph 18.66, the right of access to personal data under section 7(1) of the 1998 Act requires the data subject to pay to the data controller ‘such fee...as he may require’.49 The permitted fees are nominal only because they are subject to an overall maximum of £10 (in the case of ordinary data controllers) or £50 (for health or education records),50 which is unlikely to reflect the full cost of complying with such requests.

18.69  The general approach. Under the costs regime that has evolved in cases heard by the English courts under section 97A of the Copyright, Designs and Patents Act 1988, service providers (usually ISPs) are normally required to bear the costs of implementing blocking remedies, while the applicants who seek and obtain such orders are required to bear the costs of the application. Applicants are also required to bear the costs of identifying any changes that are required to the blocked URLs and notifying the respondent, who must then bear the cost of implementing the updates.51

18.70 This approach represents a partial departure from the ‘costs follow the event’ principle in two ways. First, although an applicant may succeed in its claim, it will not generally recover its costs of the action. It remains an open question whether an applicant for a blocking order who fails to obtain the order would be liable to pay the costs of the respondent in responding to the application.

18.71 Second, the successful applicant must bear a portion of the recurring implementation costs; namely, the ongoing costs of monitoring blocked URLs to identify mirror websites, websites that have shifted to shared IP addresses, and websites that no longer exist, each of which must be notified to the respondent. (Although, in practice, respondents may conduct their own monitoring, blocking orders do not require such monitoring in terms.) However, the respondent must in the ordinary case bear all the other costs of implementation.

18.72 In Newzbin2 and Cartier, the Court did not rule out the possibility of ordering the applicant to pay some or all of the costs of implementing a blocking order in an appropriate case. However, if the present approach continues to be applied, this possibility would be the exception rather than the norm—at least in intellectual property cases.

18.73  Allocation of implementation costs. The view taken by first-instance courts is exemplified by the decision in Newzbin2. In that case, the respondent ISP was ordered to pay the costs of the action and of implementing blocking orders. In the Court’s judgment on the form of order, Arnold J gave three main justifications for requiring the ISP to bear all its costs of implementation: one normative, one formalist, and the other pragmatic.

18.74 The normative justification was that the respondent, although innocent of any wrongdoing, was an ordinary market participant in a regulated industry, with the result that it must bear the costs of such regulation (whether judicial or legislative) like any other enterprise. The costs of complying with injunctive and other remedies that may be ordered against it were said, like the costs of implementing regimes needed to comply with requirements imposed by Parliament, to be ‘costs of doing business’ in the United Kingdom and the European Union. As Arnold J explained:

The [claimants] are enforcing their legal and proprietary rights as copyright owners and exclusive licensees, and more specifically their right to relief under Article 8(3). [The ISP] is a commercial enterprise which makes a profit from the provision of the services which the operators and users of Newzbin2 use to infringe the [claimants’] copyright. As such, the costs of implementing the order can be regarded as a cost of carrying on that business.52

18.75 This reasoning is inconsistent with the approach taken in Mareva applications, where it is not assumed that financial institutions who are respondents to (or served with) such orders should bear the costs of complying with them as costs of carrying on business as a bank. The same might be said of interception warrants and retention notices.53 In each case, the embedded policy choice is to insulate innocent third parties from some or all of the expenses they would otherwise be required to bear as part of their business. To conclude that internet intermediaries should stand in a different position is to assume the very conclusion in issue.

18.76  Requirements of EU law. The second, formalist reason was said to derive from European Union law. The judge considered that it was implicit in recital (59) of the Information Society Directive ‘that the European legislature has chosen to impose that cost on the intermediary’.54 Arnold J reached the same conclusion in Cartier in the context of an order under article 11 of the Enforcement Directive.55 However, this reasoning is inconsistent with recital (23) of the Enforcement Directive, which provides that ‘the conditions and procedures relating to such injunctions should be left to the national law of Member States’.

18.77 The European Commission’s report on the implementation of the Enforcement Directive also suggests that there is no single approach to costs mandated in the Directive, though clarification is thought desirable.56

18.78  Magnitude of costs. The third, pragmatic reason was that the costs of implementation were small and could feasibly be borne by the ISP. In Newzbin2, the costs were described as ‘modest and proportionate’—around £5,000 for the initial block and £100 per subsequent notification—which was not ‘excessively costly’ in the sense prohibited by article 3(1) of the Enforcement Directive. In the context of the respondents’ overall businesses, these costs were held to be proportionate.

18.79 In Newzbin2 and Cartier, the unsuccessful ISPs were ordered to pay the costs of the successful claimants in accordance with the ‘costs follow the event’ principle, apart from the claimants’ (1) pre-action costs, and (2) the costs of determining the form of order, as to which no orders were made. In Newzbin2, the claimants were required to bear the costs of the application up until the point at which the ISP began vigorously opposing the order.57 Additionally, no cross-undertaking as to damages was required because there the injunction was a final one.58

18.80 In each of those cases, the Court rejected an analogy between Norwich Pharmacal disclosure and blocking orders against an ISP. The latter were ‘not in any sense preparatory to proceedings against [the ultimate] wrongdoers’ and there was no realistic likelihood that the claimants would be able to recover their costs from the ultimate wrongdoers.59 Additionally, it was said that the provisions of European Union law to which domestic blocking powers give effect confer upon applicants ‘a legal right to the substantive remedy of a final injunction’, whereas Norwich Pharmacal relief was said to confer no such right.60 Although it is true that disclosure is an equitable remedy, and is (like an injunction) discretionary, it is respectfully submitted that Norwich Pharmacal disclosure is properly classified as a final and substantive remedy.61 It is also difficult to reconcile the adoption of an analogy with Norwich Pharmacal relief for the purposes of jurisdiction with the rejection of such an analogy for the purposes of costs.

18.81 The Court reasoned that ISPs’ liability to implement blocking injunctions was ‘the price which they pay for immunity from claims for damages’ under the E-Commerce Directive.62 Although this is undoubtedly true—in the sense that injunctive relief is an alternative and complementary remedy to monetary damages—it does not necessarily follow that the ‘price’ includes the costs of implementing all injunctions, especially where there is only a fanciful risk that any reasonable and neutral retail ISP would otherwise be liable for copyright infringement by its subscribers.63

18.82 In one reported decision from the Madrid Court of Appeal (Civil Division), that Court ordered YouTube to bear its own costs of defending a claim for monetary and injunctive relief arising from the publication of unauthorised broadcasts and recordings by unknown third parties on the Spanish language edition of YouTube.64 The trial judge dismissed the claim in its entirety and the Court of Appeal upheld that conclusion, but overturned the costs order pursuant to an exception to the rule that costs follow the event under Spanish law.65 The Court made no order as to the costs of the appeal.

18.83 The reasoning of the Court of Appeal was that the claimants had faced ‘difficulties’ in identifying exactly what business activities were carried on by YouTube, the fact that it was a test case, and that the key Court of Justice authorities relied upon by the Court to dismiss the claim were decided after proceedings were commenced. This suggests that (1) costs were considered to be a matter for domestic law, and (2) that the conduct of the parties and wider circumstances were capable of reversing the ordinary approach to costs in a case involving an innocent defendant.

18.84 The question of who should bear the costs of a de-indexing order has not yet arisen for decision by an English court. The outcome is likely to depend upon the basis of the order and the continued application of the prevailing approach in website blocking cases. If the order is made under section 97A of the Copyright, Designs and Patents Act 1988, then the existing approach (if correct) would suggest that the respondent is required to bear the costs of the remedy, while no order is made as to the costs of the proceedings to the extent they are not unsuccessfully resisted.

18.85 However, if such an order is not made under section 97A but by analogy with Norwich Pharmacal relief or the equitable protective jurisdiction, then the costs of defending and implementing the de-indexing order should ordinarily be borne by the claimant, even if successful. This follows from a conventional application of the Totalise principles, on the assumption that the respondent search engine is innocent of any wrongdoing.

18.86 If the volume of voluntary de-indexing that occurs is any reliable guidance, the compliance costs of implementing a de-indexing order are not likely to be high. However, two points can be made about this.

18.87  Determination at a hearing. First, the costs of attending a contested hearing are likely to be far greater, especially in the first test case. If respondents are unable to oppose a blocking order they consider wrongly sought without liability to pay the applicant’s costs, there is a risk that borderline or unjustified orders will be made unopposed. Particularly in these cases—where success means the disappearance (to the majority of observers) of material from the internet—it is preferable for claims to be determined judicially; this imposes no penalty on the claimant, who must only prove what he is already required to prove.

18.88  Aggregate costs. Second, costs of implementation may be higher where care has to be taken to comply precisely with the terms of a detailed order, as distinct from voluntary compliance with a request for de-indexing. Even insignificant costs can add up in aggregate. Accordingly, the current approach to costs warrants careful reconsideration in this new context.

18.89  Competition issues. An appropriate costs order also assists in preventing the respondent de-indexer from being placed at a competitive disadvantage compared to other service providers who may not be the subject of any application and so would not be forced to bear the costs of remedial action.66 However, if a respondent opposes an order which has been made in identical terms against a comparable service provider, then there may be good reasons to require the unsuccessful respondent to pay costs. This would encourage follow-on compliance without the need for duplicative litigation.

18.90  Allocation of risk of non-recovery. Finally, it should be remembered that a successful claimant will be entitled to recover the cost of non-monetary relief in any subsequent action against the primary tortfeasor. The cost of obtaining a de-indexing injunction (or disclosure, for that matter) is simply another form of damage which the claimant suffers from the primary wrong. If such damage was recoverable, it would not matter that the claimant initially paid the service provider’s costs; instead, losses would be transferred to the wrongdoer whose conduct precipitated the claim. Only in cases where the primary wrongdoer cannot satisfy judgment is the claimant is forced to bear his costs. In practice, this may describe many cases in which wrongdoing is perpetrated anonymously. However, even in such cases, it is submitted that it is preferable for the claimant whose rights are being enforced to face the risk of irrecoverable costs than a wholly innocent third party.

18.91 Securely retaining communications data in large volumes and an accessible format entails obvious costs for recipients of retention notices. These costs may relate to the establishment of data retention systems, to the ongoing maintenance and monitoring of those systems, and to dealing with day-to-day requests for access to retained data. For example, a communications service provider may, when given a retention notice for the first time, need to develop and test software to automate the acquisition and storage of relevant communications data. It may also need to employ additional staff to deal with the operational and administrative burden of complying with the notice and access requests made pursuant to it.

18.92 As is discussed in chapter 17, the voluntary code of practice by which many United Kingdom internet intermediaries retain communications data makes provision for cost-sharing between the government and the service provider.67 Specific arrangements may also be contained in private agreements made by the Secretary of State with communications service providers pursuant to section 102(3) of the Anti-terrorism, Crime and Security Act 2001.

18.93  Retention beyond ordinary business needs. The starting point is that the Code does not require service providers to retain communications data which they do not already collect and store for business purposes. However, the period of retention may exceed ordinary business needs. Accordingly, the Code provides for payment of a contribution towards the marginal costs of retention where the period provided for under the Code is ‘substantially larger’ or ‘significantly longer’ than the period of retention for business purposes. The amount of the payment is ‘a reasonable proportion of the marginal cost as appropriate’.68 ‘Marginal’ costs may include design and production costs, and the costs of additional storage and search facilities, including capital costs and operating costs. Where the period of retention is comparable to established practice, the costs of retention continue to be borne by the service provider.

18.94  Cost-sharing under the 2014 Regulations. Under the Data Retention Regulations 2014,69 provision is made for payment of a contribution towards service providers’ costs of data retention by the United Kingdom government. Regulation 13 permits the payment of some or all of the expenses incurred by an operator in complying with a data retention notice. Reimbursement may be conditional on expenses being notified and agreed in advance of being incurred, and cooperation with any audit reasonably required to monitor a claim for reimbursement.70 The extent to which reimbursement will be granted in any given case appears to be a matter for negotiation between the Home Office and the service provider concerned. Clause 185 of the draft Investigatory Powers Bill 2015 requires arrangements to be made for securing ‘an appropriate contribution’ to service providers’ costs, which suggests that a similar approach will continue to apply if the 2015 Bill is enacted.

18.95  Policy considerations. Provision for reimbursement of costs is consistent with the position of notified operators as innocent conduits for the communications of others. In forming an accurate estimate of their future costs, it will be important to consider how the volume of retained data is likely to scale with anticipated growth in a service provider’s customer base and its network traffic, as well as costs associated with making retained data secure, searchable, and accessible to the authorities throughout the period of retention. Full reimbursement of expenses may be particularly important for smaller services and online businesses (such as start-ups), who would otherwise face reduced competitiveness compared to larger enterprises or businesses established in other jurisdictions.

18.96 The high cost of litigation can be prohibitive for many potential claimants, especially where proceedings are contemplated against a large and well-resourced defendant. Similarly, for many defendants, the cost of defending proceedings (and the potential precedential costs of an unfavourable verdict) may far exceed the costs of capitulating to the claimant’s demands. Moreover, regardless of their outcome, proceedings can be prolonged, fraught, and a distraction from ordinary trade, and carry with them substantial opportunity costs and negative publicity.71 These consequences can be particularly damaging for start-ups and other nascent internet businesses.

18.97  Alternatives to litigation. Ultimately, the best way to improve treatment of costs is simply to reduce them. Prospective litigants should be encouraged to consider a range of alternatives to litigation which may reduce their overall costs of dispute resolution. The most common mechanisms have been discussed elsewhere in this work.72

18.98  Self-help remedies. Voluntary removal and de-indexing of content can entail particularly low costs to both the requesting and implementing party.73 Additionally, administrative procedures for the transfer of domain names can be pursued at relatively modest cost.74 Where a dispute relates to allegedly defamatory internet publications, discursive remedies—which involve substituting or amending the publication itself—may provide more meaningful redress than litigation against a facilitating internet intermediary.75

18.99  Early neutral evaluation. A further alternative is the use of an early neutral evaluation procedure, potentially in combination with an online dispute resolution procedure. Neutral evaluation involves a preliminary assessment of the factual and legal merits of a dispute by an independent adjudicator (typically a barrister, mediator, or arbitrator). Such a procedure may only be adopted by agreement between the parties. The adjudicator’s recommendations are normally non-binding, but a binding determination is also possible. Neutral evaluation offers an attractive and cost-effective forum for internet disputes to be resolved, particularly since the procedure can often be conducted electronically.

18.100  Online dispute resolution. Various proposals have been made to introduce formal systems of online dispute resolution for claims of lower value and complexity.76 For example, in the Civil Courts Structure Review: Interim Report, Lord Justice Briggs recommended the creation of the Online Court—a streamlined, electronically administered courtroom for use by litigants without lawyers. Such a court would make full use of electronic case management at all stages of a dispute, and may assist in simplifying the approach taken to many online claims by individuals while ensuring proper judicial oversight. Although such proposals remain at an early stage, they have the potential to reduce the cost and complexity of civil litigation involving internet wrongdoing very considerably.77

18.101  Test cases. Finally, it should be borne in mind that many of the remedies discussed in this work are relatively new. The first test case is normally the most costly battle. As new remedies become more commonplace, litigation costs can be expected to fall. It is also to be hoped that specialist tribunals and small-claims tracks, perhaps modelled on the Intellectual Property Enterprise Court, could be established to determine many of the most commonplace internet content disputes at proportionate cost.

Notes
1

Senior Courts Act 1981 s 51(1).

2

Senior Courts Act 1981 s 51(3).

3

Although the courts retain complete discretion as to costs, the Civil Procedure Rules directly codify the ‘costs follow the event’ principle as a ‘general rule’: r 44.2(2).

4

Civil Procedure Rules r 44.2(2)(a).

5

See Civil Procedure (Amendment) Rules 2013 (SI 2013/262).

6

See, eg, Sir Rupert Jackson et al (eds), White Book (2015) section 1, chs 43 to 45; Simon Middleton and Jason Rowley, Cook on Costs (2016); John O’Hare and Kevin Browne, Civil Litigation (15th ed, 2011) chs 38 to 39; Adrian Zuckerman, Zuckerman on Civil Procedure (3rd ed, 2013) ch 26.

7

[1999] 1 WLR 1507, 1522–3 (Lord Woolf MR).

8

Civil Procedure Rules r 44.4(3)(a), (c), (d).

9

See chapter 13, section 2.3.

10

Civil Procedure Rules r 44.3(2)(a).

11

Civil Procedure Rules r 44.3(2)(b).

12

Case C-70/10 [2011] ECR I-11959, [48]. See chapter 13.

13

Case C-324/09, L’Oréal SA v eBay International AG [2012] Bus LR 1369, [139].

14

Case C-360/10, Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV [2012] 2 CMLR 18, [46].

15

Case C-314/12 [2014] Bus LR 541, [50] (‘UPC Telekabel’).

16

[2015] Bus LR 298, [181] (Arnold J) (‘Cartier’).

17

UPC Telekabel, [106] (Advocate General).

18

UPC Telekabel, [106] (Advocate General).

19

See chapter 12, section 1.2.

20

[1974] AC 133, 175 (Lord Reid) (‘Norwich Pharmacal’).

21

Norwich Pharmacal, 176 (Lord Reid) (emphasis added).

22

Norwich Pharmacal, 199 (Lord Cross).

23

Norwich Pharmacal, 175 (Lord Reid) (Viscount Dilhorne and Lord Kilbrandon agreeing), 182 (Lord Morris), 199 (Lord Cross).

24

See Beames on Costs (2nd ed, 1840) § IV, 17; Bray on Discovery (1885) 618; cited in Norwich Pharmacal, 154.

25

Upmann v Elkan (1871) LR 12 Eq 140, 148 (Lord Romilly MR). Cf at 142.

26

The defendant relied upon the older case of Ainsworth v Walmsley (1866) LR 1 Eq 518 as authority for the proposition that it ought not be required to pay any costs; in that case, a claim for passing off failed, but the court made no order as to costs in circumstances where the defendant’s labels had contributed to the harm.

27

Totalise plc v The Motley Fool Ltd [2002] 1 WLR 1233 (‘Totalise’).

28

Totalise, 1235 (Aldous LJ).

29

Totalise, 1237 (Aldous LJ).

30

Totalise, 1239 (Aldous LJ).

31

Totalise, 1241 (Aldous LJ).

32

Totalise, 1241 (Aldous LJ).

33

Totalise, 1241 (Aldous LJ). In that situation, Aldous LJ added that the respondent may, ‘if appropriate’, be ordered to pay the other party’s costs.

34

[1980] RPC 363 (‘Harbottle’).

35

Harbottle, 367–8, 374 (Oliver J).

36

Harbottle, 376 (Oliver J).

37

[2004] FSR 5 (‘Miller Brewing’).

38

Miller Brewing, [31] (Neuberger J).

39

See Practice Direction 25A—Interim Injunctions, ‘Model Freezing Injunction’ (October 2005) sch B, para (7). See also HM Courts & Tribunals Service, The Admiralty and Commercial Courts Guide (9th ed, October 2014) appendix 5, 99.

40

[2013] 2 AC 28 (‘Sinaloa Gold’).

41

Sinaloa Gold, 44–5. The Court cited the costs decision of Miller Brewing with apparent approval.

42

Sinaloa Gold, 44 (Lord Mance JSC) (emphasis added).

43

Galaxia Maritime SA v Mineralimportexport [1982] 1 WLR 539, 543 (Kerr LJ).

44

[2008] 1 WLR 1936, 1948 (Tuckey LJ).

45

Civil Procedure Rules r 46.1(2).

46

Communications Act 2003 s 124M; Online Infringement of Copyright (Initial Obligations) Cost Sharing Order 2010 (UK); Ofcom, Online Infringement of Copyright and the Digital Economy Act 2010: Notice of Ofcom’s Proposal to Make by Order a Code for Regulating the Initial Obligations (26 June 2012) [8.8].

47

Department for Business, Innovation and Skills, Online Infringement of Copyright (Initial Obligations) Cost Sharing: HM Government Response (2010) 2.

48

See Ofcom, Online Copyright Infringement Initial Obligations Code (2010) § 2.1.

49

Data Protection Act 1998 s 2(b).

50

Data Protection (Subject Access) (Fees and Miscellaneous Provisions) Regulations 2000 (SI 2000/191) reg 3.

51

See Cartier, [239] (Arnold J).

52

[2011] EWHC 2714 (Ch), [32] (Arnold J). The Court does not appear to have had cited to it the authorities on Norwich Pharmacal and Mareva orders.

53

See section 3.6.

54

Newzin2 [No 2], [32]. Recital (59) explains that the rationale of making injunctions available against intermediaries is that they are the parties ‘best placed’ to bring infringing activity to an end.

55

Cartier International AG v British Sky Broadcasting Ltd [No 2] [2014] EWHC 3794 (Ch) (‘Cartier [No 2]’).

56

See European Commission, Report on the Application of Directive 2004/48/EC,COM(2010) 779 final, 7, 8; European Commission, Synthesis of the Comments on the Commission Report on the Application of Directive 2004/48/EC (July 2011) 17. See also European Commission, ‘Public Hearing on Directive 2004/48/EC and the Challenges Posed by the Digital Environment’ (7 June 2011) MARKT/ZH D(2011), 2.

57

Newzbin2 [No 2], [53]–[54] (Arnold J).

58

Newzbin2 [No 2], [35] (Arnold J).

59

Cartier [No 2], [9] (Arnold J).

60

Newzbin2, [27] (Arnold J).

61

See chapter 4, section 1.1 for a summary of the reasons why Norwich Pharmacal disclosure is a remedy.

62

Newzbin2, [29] (Arnold J); Cartier [No 2], [7] (Arnold J).

63

See chapter 6, section 2.3 for discussion of ISPs’ potential secondary liability for copyright infringement.

64

Case 11/2014, Gestevision Telecinco SA v YouTube LLC [2014] 2 CMLR 13 (‘YouTube’).

65

YouTube, [54]; citing Civil Procedure Law (ES) art 394.1.

66

See Newzbin2, [188] (Arnold J).

67

Home Office, ‘Retention of Communications Data under Part 11: Anti-terrorism, Crime and Security Act 2001—Voluntary Code of Practice’ (5 December 2003) (‘Code’).

68

The Retention of Communications Data (Code of Practice) Order 2003 (SI 2003/3175); Code [23]–[24].

69

See now Investigatory Powers Bill 2015 cl 185(1).

70

Data Retention Regulations 2014 reg 13(2).

71

Sadly, Dickens’ colourful warning remains more than merely satire: ‘This is the Court of Chancery, ...which so exhausts finances, patience, courage, hope, so overthrows the brain and breaks the heart, that there is not an honourable man among its practitioners who would not give—who does not often give—the warning, “Suffer any wrong that can be done you rather than come here!”’: Charles Dickens, Bleak House (1853) ch 1, [6].

72

See especially chapter 3, section 4.

73

See chapter 16, section 1.1.

74

See chapter 7, section 3.4.

75

See chapter 8, section 4.

76

See, eg, Richard Susskind et al, Online Dispute Resolution for Low Value Civil Claims (February 2015).

77

Lord Justice Briggs, Civil Courts Structure Review: Interim Report (December 2015) 75–87.

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