A law firm that sent out hundreds of letters to people it accused of illegally sharing copyrighted files has shut down, days before a key court decision on whether it defendants could claim damages from it.

ACS:Law, which had sent out "speculative invoicing" letters to people accused of illegally downloading content on behalf of its client MediaCAT - and threatening court action if they didn't pay - apparently closed on Monday 31 January. MediaCAT is understood to have closed down as well.

The closure marks the end of a tumultuous chapter in rows over filesharing and piracy in Britain. Although a number of people have been sued in the past decade by record companies, it appears to have had only minimal impact on levels of piracy and filesharing. The use of "speculative invoicing" - alleging infringement without definitive proof - had looked like a new front in the battle.

But instead it turned into a three-way row between ACS:Law, the alleged infringers and internet service providers from whom user details had been demanded.

The closedown comes ahead of a judgement due on Tuesday afternoon at the patents county court at which 27 people who had received letters were seeking a definitive ruling from the judge on whether they could claim damages after both ACS:Law and MediaCAT declined to put forward any evidence.

MediaCAT had signed up a number of copyright owners who gave it permission to pursue people it accused of file-sharing based on data it had collected. It then sought the names and addresses of those people from internet service providers (ISPs) including BT. That in turn led to a row in which some ISPs said they would not cooperate with requests.

Andrew Crossley, the lead solicitor at ACS:Law who set the firm up, had previously said that he would exit the field following threats to his family.

MediaCAT and ACS:Law tried to drop the cases that came to court, but Judge Birss said that it would not be simple to drop the case because the copyright holders themselves were not in court. That meant in theory that if the MediaCAT case were discontinued, then the copyright holders could still come after those accused.

He also questioned MediaCAT's decision to drop the case: "I want to tell you that I am not happy. I am getting the impression with every twist and turn since I started looking at these cases that there is a desire to avoid any judicial scrutiny," he told its barrister.

Some of the defendants had said they would seek to sue Crossley for harassment, but it is not known whether they can now pursue an individual case against him for actions taken by his former firm.

The letters provoked a huge row because hundreds of the accused claimed that they had been wrongly identified. The Solicitors Regulation Authority was investigating ACS:Law's practices before the company closed down. It is not clear whether the investigation will be carried on against Crossley as an individual following ACS:Law's closure.

The issue was made worse for Crossley and ACS:Law after the personal details - including names, phone numbers and addresses - of thousands of Britons leaked online via an attack on the company's website. Many also saw their names or postcodes linked to pornographic films which MediaCAT was claiming they had illicitly downloaded. The Information Commissioner's Office (ICO) was investigating the breach, and could have levied a file of up to £500,000 if ACS:Law were found to have been holding the information insecurely. It is unclear whether that case can be continued against Crossley as an individual or whether it lapses with the company's closure.