Real estate photographer, James Hardingham, who lost a major copyright court case against Realestate.com.au (REA) and RP Data, will not be ordered to pay his opponents full legal fees.
This is due to Hardingham’s legal battle being financially supported by a commercial litigation funder, Court House Capital, which has been ordered to pick up part of the tab.
Hardingham’s fought a David vs Goliath court battle against corporations, REA and RP Data. Hardingham initially lost, successfully appealed, then REA and RP Data appealled to the high court and the favourable ruling was overturned.
REA, a massive property marketing platform, sub-licenses real estate photos and other marketing content, such as floor plans, to property analytics firm, RP Data. REA doesn’t seek permission from the real estate photographers, who are most likely the copyright holders – including inHardingham’s case. Although its users, real estate agents, agree to a terms of service granting REA an ‘irrevocable and perpetual licence’ of the marketing materials.
Hardingham’s successful appeal argued that despite there being no contract between himself and the agent, the implied licence only lasts until the agent sells the property. The court agrees. By this logic, REA can’t licence/sub licence content from agents, who can’t grant such a permission.
Hardingham launched legal proceedings in 2018, lost in 2020, successfully appealed in 2021, and then in late 2022 REA and RP Data had the appeal overturned. The real estate corporations successfully argued that a reasonable person, including Hardingham, know that REA stores and displays copyrighted content from historical property listings, so he cannot claim the implied licence was limited exclusively to marketing.
Read more here.
This final ruling determined that Hardingham is required to pay REA and RP Data’s astronomical legal fees. While the figures are not disclosed, REA and RP Data likely has access to the finest and most expensive legal representation in the country. For a legal battle lasting four years, footing the bill is a scary thought. An absolutely devastating outcome for Hardingham.
Fortunately for Hardingham, the courts now rule that his litigation funder, Court House Capital, will pay a significant portion of the opponent’s legal fees.
The risk of commercial litigation
Court House Capital agreed to pay the principal proceedings (not the appeals), and if Hardingham won Court House Capital takes 15 percent of any damages, as well as recouping its funding. The court found the litigation funder’s commercial arrangement a risk that renders it liable if Hardingham lost.
This wouldn’t have been the case if Court House Capital had no commercial interest. Two common instances where a third-party funding a legal battle isn’t ordered to pay costs is when a family member provides financial support; or an entity funding is motivated purely to help facilitate the course of justice.
Court House argued that its contribution amounted to ‘partial funding’, and ordering it to pay would ‘punish’ the firm for ‘assisting impecunious applicants to bring proceedings of merit’. But Judge Thawley isn’t convinced.
‘I do not accept these submissions. The point is that Court House decided to fund the litigation for its own commercial gain. … It was plain from a statement of the essential facts that the claim was one which might well fail. It is fair that the Court House also wears the risk in seeking to profit from the litigation. Its level of funding was substantial.’
Court House Capital also claims to have promoted access to justice, but again Judge Thawley isn’t convinced, stating ‘this is but a consequence of its commercial activities’.
‘I do not infer that Courts House’s activities were motivated by any concern for access to justice.’
He continues that ‘litigation funding is a legitimate and commonplace commercial activity. One obvious risk for any commercial litigation funder is that, if the funded litigation is unsuccessful, the funder might face an application that it pay the successful parties’ costs.
‘That risk arises whether or not it has agreed to indemnify the applicant against an adverse costs order. Court House decided to fund the principal proceedings in return for 15 percent of any damages obtained.
Thawley finds it’s ‘unrealistic’ that Court House Capital didn’t consider it would be required to pay REA/RP Data’s costs if the case was unsuccessful.
And perhaps if Court House Capital funded the appeals process and beefed up Hardingham’s legal representation, the outcome may have gone the other way.
The costs are yet to be determined. The decision will take place without a hearing, meaning it may not go on public record. Read the court ruing here.