[murraypaul]

From Media CAT Ltd v Adams & Ors [2011] EWPCC 6 (08 February 2011) :

21. Perhaps many, maybe more of the recipients of these letters have been squarely infringing the copyright of Sheptonhurst on a major scale and know that they have been doing exactly that. They may think £495 is a small price to pay and settled immediately. That is a matter for them. However it is easy for seasoned lawyers to under-estimate the effect a letter of this kind could have on ordinary members of the public. This court's office has had telephone calls from people in tears having received correspondence from ACS:Law on behalf of Media CAT. Clearly a recipient of a letter like this needs to take urgent and specialist legal advice. Obviously many people do not and find it very difficult to do so. Some people will be tempted to pay, regardless of whether they think they have actually done anything, simply because of the desire to avoid embarrassment and publicity given that the allegation is about pornography. Others may take the view that it all looks and sounds very official and rather than conduct a legal fight they cannot afford, they will pay £495. After all the letter refers to an order of the High Court which identified them in the first place. Lay members of the public will not know the intricacies of the Norwich Pharmacal jurisdiction. They will not appreciate that the court order is not based on a finding of infringement at all.

99. Media CAT and ACS:Law have a very real interest in avoiding public scrutiny of the cause of action because in parallel to the 26 court cases, a wholesale letter writing campaign is being conducted from which revenues are being generated. This letter writing exercise is founded on the threat of legal proceedings such as the claims before this court.
100. The information annexed to Mr Batstone's letter refers to ACS:Law having "recovered" £1 Million. Whether that was right and even if so whether it was solely in relation to Media CAT or other file sharing cases I do not know. Simple arithmetic shows that the sums involved in the Media CAT exercise must be considerable. 10,000 letters for Media CAT claiming £495 each would still generate about £1 Million if 80% of the recipients refused to pay and only the 20% remainder did so. Note that ACS:Law's interest is specifically mentioned in the previous paragraph because of course they receive 65% of the revenues from the letter writing exercise. In fact Media CAT's financial interest is actually much less than that of ACS:Law. Whether it was intended to or not, I cannot imagine a system better designed to create disincentives to test the issues in court. Why take cases to court and test the assertions when one can just write more letters and collect payments from a proportion of the recipients?

As conducted by ACS:Law, the process was little more than extortion. Especially if the cost of defending the claim would be more than just giving in and paying. And tainted by the fact that the majority of the recovered money went to the law firm, not the rights owners.
The judge gave a strong indication that if they had not withdrawn from the letter writing business he would have been inclined to make an order legally preventing them from continuing the practice.