Digital Economy Act Judicial Review Judgment

April 26, 2011

In a very lengthy and carefully reasoned judgment (265 paragraphs), Mr Justice Kenneth Parker has rejected the majority of the challenges to aspects of the Digital Economy Act 2010. The case, R (BT Telecommunications PLC & Anor) v Secretary of State for Business, Innovation and Skills [2011] EWHC 1021 (Admin), attracted a large number of contributions from interested parties in addition to the submissions from the main parties. The essence of the claim was that the online infringement of copyright provisions of the DEA and the Copyright (Initial Obligations) (Sharing of Costs) Order 2011 are incompatible with a number of provisions of EU law. Although a number of public policy points and criticisms of the Parliamentary process that led to the passing of the Bill tend to be dragged into reports of the case, these are (at most) peripheral issues in terms of the judgment. 

There were five grounds of challenge in respect of the copyright infringement provisions of the Act:

1. The provisions constitute a technical regulation and/or a rule on services within the meaning of the Technical Standards Directive and thus should have been notified to the EU Commission in draft. Provisions not so notified are unenforceable.

2. The provisions are incompatible with certain provisions of the Electronic Commerce Directive.

3.The provisions are incompatible with certain provisions of the Privacy and Electronic Communications Directive.

4. The provisions are disproportionate in their impact on ISPs, consumers, business subscribers and public intermediaries. The requirement  for such legislation to be proportionate is said to be derived from a number of sources, including Articles 7, 8, 11 and 52 of the Charter of Fundamental Rights and Articles 8 and/or 10 of the European Convention on Human Rights.

5. The provisions infringe the Authorisation Directive. 

The challenge to the draft Costs Order was also challenged on each of grounds 2 to 5 (the Costs Order had been duly notified). 

All but one of the grounds for challenge failed to meet the criteria for a successful judicial review, with Mr Justice Kenneth Parker making a number of apposite references to Parliament having already addressed the issues raised. However, the one exception, where the claim was successful, is not without importance. It was found that ‘qualifying costs’ under the Costs Order could not be collected in accordance with EU law, and that part of the Order is accordingly ineffective. The ‘qualifying costs’ are the costs incurred by Ofcom or the appeals body in carrying out functions under the copyright infringement provisions (as specified in the DEA 2010, s 124N DEA), including costs incurred by Ofcom under those provisions in appointing the appeals body or in establishing a body corporate to be the appeals body. Those costs when collected from ISPs (who were to bear 25% of the expenditure) were regarded as ‘administrative charges’ and such charges are illegal under the Authorisation Directive. The question of how that missing 25% is to be raised thus arises.