The UK government is getting ready to end an anti-piracy group and take its property.

Teddy Sagi
Reading time: 8 minutes

This week, a business called FACT Administration LLP, behind a settlement plan for piracy in the UK was written about in Britain’s oldest newspaper. The group wants internet users to pay at least hundreds of pounds to download a single movie, but The Gazette says that the partnership might end in just a few weeks. As a result, this could upset a lot of businesses.

Most top anti-piracy groups want to shut down illegal sites, services, and other pirates doing business.

Because the main goal is to stop them from being pirates, they give many of their targets multiple warnings before anything terrible happens. Achieving this target without going to court is better for everyone and cheaper for everyone.

But there are also anti-piracy groups that don’t give warnings and don’t believe in second chances, no matter how small the infringement or how poor the alleged infringer may be. These groups purposely go after people who use the internet at home and demand hundreds or even thousands of dollars, euros, or pounds in compensation. They feel perfectly okay doing this because the law lets them.

People feel the same about these regulation plans as about wheel clampers and parking ticket companies that use ANPR. Some MPs have said they don’t like them and also received criticism in the House of Lords.

The fact that big companies have too much power compared to regular internet users is the one thing that all these problems have in common. The system played a massive part in this situation and made even worse by design. But there is always someone more significant than the big guys, and it can be fun to see them getting what they deserve from that person. But before the main dish, here’s a little appetizer.

The Power of the Limited Liability Partnership

Since years ago, Hatton and Berkeley (H&B) and its partners have been asking UK internet users for cash settlements. Its settlement model was pretty standard at first, but when it started promoting Limited Liability Partnership (LLP) as an “insurance wrapper” against piracy, it was clearly showing off its power.

H&B’s plan called for using LLP corporate structures to protect businesses involved in settlement campaigns. This would ensure that they would have enough preparation if there were a lawsuit against them.

In short, corporations should create heavily guarded defense to protect themselves from members of the public who are financially insecure and don’t know the law. H&B Administration LLP was ready to step up a gear, but what happened next was perhaps even more surprising.

FACT Administration LLP

Federation Against Copyright Theft head Kieron Sharp’s company, FACT Worldwide Limited, joined H&B Administration LLP in September 2019. This decision was upsetting for lots of critics.

FACT’s work has sometimes been controversial because of what it is. However, they have a solid reputation because of decades of hard work in high-profile, complex cases of large-scale piracy. Cash settlement models that target people with expensive “speeding tickets” seemed like a terrible fit.

Still, Sharp became a named member of the LLP in 2020. In 2021, the business’s name changed from H&B Administration LLP to FACT Administration LLP. Soon, it started pressuring internet subscribers to pay cash settlements on behalf of its movie company members. Later, it added a scary payment platform that warned of civil and criminal action if people didn’t pay.

The law applies to LLP.

But even though LLPs might be safe, the laws still apply to them. Operating an LLP comes with responsibilities, such as the need to report to the Government. The Government set these rules. If you don’t follow them, you can get into trouble that you could have avoided.

For example, the Government doesn’t immediately get mad if an LLP doesn’t send in its confirmation statement on time. Suppose we use the document below as an example. In that case, the statement date is April 11, 2022, and it’s perfectly fine to send one before April 25.

Taking longer, on the other hand, means putting big red text on a record that used to be clean.

Of course, people forget things, so the Government is very beneficial these days and it can send a friendly “pre-copyright violation notice” to remind people before the statement is due. It’s fair to remind people that they aren’t meeting their legal obligations.

But that isn’t enough for some businesses to get going. Before they can yell “protective wrapper” and ask for £800, a few months will have gone by, and maybe the most straightforward and cheapest company filing still won’t have been done.

No one knows why that’s the case here. When it comes to what other people do, anti-piracy groups always seem to be very strict about the law. When they accuse someone of infringement, for example, they sometimes say that internet subscribers who aren’t the offender didn’t do their “duty of care” because they didn’t think about what someone else might do privately on their connection at an unknown time in the future.

Suppose they had been given an official reminder in advance with specific dates and legal requirements. Followed by several polite warnings. In that case, you could probably see their point. But for settlement targets, this never happens. No signs, no chances. Give us the money.

More Warnings Incoming

People who run LLPs get polite reminders and warnings when they don’t do what the law says they should. This week, a notice appeared on the Companies House page for FACT Administration LLP. It said things could get terrible if the company kept not following the rules.

“The Registrar of Companies gives notice that, unless cause is shown to the contrary, the Limited Liability Partnership will be struck off the register and dissolved not less than 2 months from the date shown above [28/06/2022],” it reads.

“Upon the Limited Liability Partnership’s dissolution, all property and rights vested in, or held in trust for, the Limited Liability Partnership are deemed to be bona vacantia, and will belong to the Crown.”

After not following the law for months and months, this notice is yet another warning to do so. But even though it’s been a few days, nothing has changed. Some “duties of care” seem not as important as others.

So, Britain’s oldest newspaper, The Gazette, ran a free ad for FACT Administration LLP this week. It’s not as “fun” as the country’s tabloids, but it can keep up with the “red tops” when it comes to scandals, even as it tries to be accurate.

“Not filing your confirmation statements, annual returns or accounts is a criminal offense – and directors or LLP designated members could be personally fined in the criminal courts,” UK Government advice reads.

“Failing to pay your late filing penalty can result in enforcement proceedings. Any criminal proceedings for not filing confirmation statements, annual returns or accounts is separate from (and in addition to) any late filing penalties issued by Companies House against the company.”

But of course, bad things probably won’t happen, despite all the loud words and threats to dissolve the LLP and give its assets to the Crown. There are no immediate financial penalties for filing a late confirmation statement. In the long run, it’s almost always possible to get a company back on track, no matter how bad things get in the short term.

Also, filing a confirmation statement is straightforward and ridiculously cheap, costing only £13. But if people can’t spare 20 minutes and have a lot of money (maybe some alleged pirates gave a lot of money recently), a well-known company with an address in London’s Mayfair says it will do it for £125. Still, you should probably send a few reminders just in case.

Lastly, the US-based company TCYK LLC might also need reminders. Its movie, “The Company You Keep,” was mentioned in cash settlement letters that were sent out in 2015, including one to an 82-year-old grandmother.

The problem is that even though they are listed as an active member of FACT Administration LLP, corporate data in the US shows that the company has been dissolved, possibly not existing. Companies House doesn’t seem to know about this, but maybe someone will tell them in a few months.

FACT Administration LLP structure could be shut down

Current person/entity with significant control: Hatton & Berkeley Management Ltd (Director: Robert Croucher, 75%+ shareholder 1)

Members, countries of incorporation (where applicable), plus sources/connections

Robert Croucher (UK) 1,2

Kieron Sharp (UK) 1,2

Oliver Williams (UK) 1,2

After 2 Movie LLC (USA) 1,2

After 34 Nevada LLC (USA) 1,2

Azil Productions LLC (USA) 1,2

Cinestate Run Hide Fight LLC (USA) 1,2

FACT Worldwide Ltd (UK) 1,2

H Films Inc. (USA) 1,2

Hatton & Berkeley Management Ltd (UK) 1,2

Icon Film Distribution Ltd (UK) 1,2

Right Angle Productions LLC (USA) 1,2

TCYK LLC (USA) 1,2 (dissolved)

Voltage Holdings LLC (USA) 1,2

Wonder One LLC (USA) 1,2

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