A High Court judge said litigants should undergo a “reality check” before proceeding with claims where lawyers end up the “only winners”.
Mr Justice Michael Twomey encouraged potential litigants to engage in mediation, rather than litigation, because it “offers a crucial opportunity” for “reality checking” claims before they reach court.
The judge made the remarks when throwing out a multimillion euro claim brought by V Media and First Click Marketing Operations Managament Limited against Techads Media Ltd. He also rejected Techads’s €1.5 million counterclaim.
He said the case, which involved estimated legal fees of more than €1 million, “would have benefited from mediation/reality checking”.
RM Block
“Litigation should be the option of last resort, rather than first resort, when it comes to resolving disputes,” he said.
Techads was based in the Dublin City University Alpha Campus but now “exists solely for the purposes of this litigation”, the judge said in a recently published written judgment.
V Media, with a registered address in Montenegro, and First Click, incorporated in the Abu Dhabi Free Zone, sought about $2.5 million (€2.1 million) from Techads for alleged unpaid invoices from 2022. However, Techads claimed it was not obliged to pay because, it said, V Media and First Click agents breached the terms of their respective digital marketing agreements.
Between 2018 and 2021, Techads went from having sales of €5.86 million to €119.81 million, the judge said. However, in mid-2022 its business “disappeared almost overnight, when it was blacklisted by its two main clients” – Ask Media Group LLC and CBS Interactive, Inc – which are not a party to the case, he said.
Mr Justice Twomey said Techads’s business “involved sourcing website traffic and then driving that web traffic” to its clients’ websites via marketing agents such as V Media and First Click.
Ask and CBS “terminated their agreements with Techads in mid-2022 because of the ‘unusual’ nature of the web traffic provided to them” on behalf of Techads via agents.
The judge said website owners do not want to “pay for robots clicking on their sites or indeed individuals clicking on their sites who have no likelihood of spending money”.
Techads’s counterclaim against V Media and First Click sought €1.5 million for amounts allegedly clawed back by Ask and CBS from Techads.
The case was listed for an eight-day hearing commencing on June 24th, with costs estimated by the parties as likely to exceed €1 million.
However, the court found “neither the plaintiffs, nor the defendant, are entitled to any award”.
“As a result, the only winners in this case are the lawyers,” said Mr Justice Twomey.
“Human nature is such that persons who undertake litigation, like any other task, will often seek to be as successful as possible, which often means portraying the damage that they have suffered, or the amounts they have lost, at their absolute height,” the judge wrote.
“However, the downside of such an approach is that litigants can end up ‘believing in their own publicity’, as they repeat and provide evidence for their claims, and so reinforce their own belief in their claims.”
Mr Justice Twomey said “the problem” with this approach is that it “can reduce the likelihood of a settlement, particularly if the first ‘reality check’ of the claims and counterclaims occurs when it is too late, as appears to have happened in this case”.
