The High Court has decided of its own initiative to issue contempt proceedings against the self-proclaimed inventor of Bitcoin after finding that posts made by him on the Slack messaging platform and the forwarding on of an email may have revealed the substance of a draft judgment whilst it was still under an embargo.
The decision Wright v McCormack  EWHC 3343 (KB) is the latest in a series of recent cases in which the courts have demonstrated a zero-tolerance policy towards embargo breaches. Sir Geoffrey Vos MR in R (on the application of Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy  EWCA Civ 181 made it clear last year that, embargo breakers could expect to be the subject of contempt proceedings and it appears that the courts are fully engaged on this issue.
Alex Sharples, Senior Associate and Annie Joseph, Solicitor in our Commercial Litigation team consider the implications of this judgment and how parties, and their lawyers, can navigate embargoed judgments to ensure that they do not end up in danger of such treatment. The key message is that caution is required when making any communications relating to a draft judgment, before it is handed down, even if this communication is phrased as a hypothetical and the proceedings/judgment are not expressly referenced.
The underlying claim concerned libel proceedings and the background facts to this case make for interesting reading. The claimant Dr Wright claims to be 'Satoshi Nakamoto', the pseudonym used by the inventor of Bitcoin. The Defendant, Mr McCormack is a blogger in the cryptocurrency sphere.
Mr McCormack tweeted and said in a recorded discussion that Dr Wright is not Satoshi and that his claims to be Satoshi are fraudulent. Dr Wright brought a claim for libel against Mr McCormack. Dr Wright established at trial that some of Mr McCormack’s publications were defamatory and caused serious harm to his reputation at the time when they were made.
It was not necessary for Dr Wright to establish in proceedings that he is Satoshi as once a claimant shows that a publication is defamatory and has caused serious harm to his reputation, it is for the defendant to establish that the publication is true.
Whilst Dr Wright succeeded in establishing liability, the judgment was somewhat of a pyrrhic victory as the Judge decided that Dr Wright had advanced a "deliberately false case" in relation to the allegations of reputational harm and found that he should only be entitled to nominal damages of £1. Dr Wright was also ordered to pay Mr McCormack's costs on an indemnity basis.
Breach of the Embargo
The Judge provided a copy of his draft judgment in the libel proceedings to the lawyers acting for the parties on 26 July 2022, a few days before it was due to be formally handed down. This is usual practice in England and Wales to enable parties to correct any errors, prepare submissions and agree orders on any consequential matters.
At this stage, the judgment was subject to the usual embargo (as set out in 2.4 of CPR PD 40E) not to make the judgment public before it is handed down and included the following warning;
This is a judgment to which the Practice Direction supplementing CPR Part 40 applies. It will be handed down on 1 August 2022 at 12.00 noon. This draft is confidential to the parties and their legal representatives and accordingly neither the draft itself nor its substance may be disclosed to any other person or used in the public domain. The parties must take all reasonable steps to ensure that its confidentiality is preserved. No action is to be taken (other than internally) in response to the draft before judgment has been formally pronounced. A breach of any of these obligations may be treated as a contempt of court…”
Shortly after receiving a copy of the embargoed judgment, Dr Wright posted three messages on the “#bitcoin-general” channel of the MetaNet workspace of the Slack messaging platform. Slack is a popular platform designed for business use on which members can establish “workspaces” on which to communicate. The “#bitcoin-general” Slack channel had 290 members.
In his posts, Dr Wright referred to spending "4 million to receive a dollar plus 2 million costs" as the "only thing that matters is crushing the order side" and that he would "spend 4 million to make an enemy pay 1".
Dr Wright said that the purpose of the post was not to give any indication of the draft judgment but was instead intended to encourage debate amongst the members of the Slack channel and that he did not believe that members of this Slack channel would have knowledge of the practice of embargoed judgments in the UK.
In addition, on 28 July 2022, a member of Dr Wright’s legal team sent an email to him about other litigation. It was sent as a reply to an email containing a summary of the judgment. Dr Wright replied to the email copying in 5 other people who were not entitled to know the substance of the judgment.
Dr Wright said that he did not realise when copying others in that there was a summary of the judgment at the bottom of the email chain.
The Court evaluated Dr Wright’s explanation in light of three important contextual matters:
- Anyone who had been following the litigation would know that Dr Wright’s own estimate of his costs was close to £4 million;
- The case had attracted considerable publicity particularly amongst those with an interest in cryptocurrency in general;
- The members of the Slack channel on which Dr Wright’s posts appeared would have all been people with an interest in cryptocurrency. Any such person, with even a passing knowledge of how High Court litigation in England works, would know that generally the parties to a judgment are sent an embargoed copy of the judgment in advance of its being handed down.
Against that background, the Court was unable to accept, without further investigation, Dr Wright’s explanation that the purpose of his Slack posts was to “encourage debate”. The court considered that there was a real prospect that a Court might find that, by posting those messages, Dr Wright was disclosing, and intending to disclose, the substance of the judgment contrary to the clear terms of the embargo.
With respect to the email to other recipients, this appeared to be an additional breach of the embargo by Dr Wright and potential further contempt of court. It was dependent on the view the Court takes as to Dr Wright's state of mind when sending on the email in question.
Embargoed judgments are a peculiar feature of litigation in England and Wales but nevertheless play an important role in the administration of justice in ensuring that any inaccuracies or inappropriate material in a draft judgment can be rectified before that judgment is made public.
This decision serves as a salutary reminder to parties of the need to exercise caution when dealing with an embargoed judgment and to refrain from referring to the judgment in any external communications as the consequences of breaching an embargo can be dramatic (particularly where that breach is found to be deliberate). Even if a party does not explicitly refer to the judgment, they may still fall foul of the embargo and contempt proceedings may be issued against them.
Parties, and particularly, corporate clients should be live to the risks of disseminating a draft judgment too widely within their own company as they may risk inadvertently breaching the terms of the embargo and/or becoming vicariously liable for any breaches made by their employees.
It needs to be made clear to anyone who is intended to receive the draft judgment that the draft judgment is confidential, not for circulation and is only being provided for the permitted purposes (i.e. for the correction of any mistakes/removal of any permitted materials). Security measures such as password-protection and alternative measures of restricting access to the document should also be employed and a list of recipients who have access to the judgment should be maintained by parties and their lawyers.
If there is any doubt as to who may receive a draft judgment under an embargo, they should err on the side of caution, and clarify the position with the judge and a list of recipients should be maintained by parties and their lawyers.