Those who are not prepared to reveal their identity to the court cannot expect to take part in proceedings dealing with the detailed assessment of costs.

This was the conclusion reached by Costs Judge Rowley in the matter of Wright v Person Or Persons Unknown Responsible for the Operation and Publication of the Website bitcoin.org [2022] EWHC 2982 (SCCO) (23 November 2022) when he determined that “…the claimant will be entitled to request a default costs certificate if the defendant does not provide their name and an address for service”

Background 

Several people have laid claim to being the creator of the cryptocurrency and blockchain Bitcoin, however, the actual identity of the person responsible is unknown. Dr Craig Wright, an Australian businessman and computer scientist, has claimed to be the enigmatic creator since 2015, going so far as to be involved in several court cases both in the UK and abroad. 

While Dr White is certainly not the only person claiming to be the mysterious creator, the latest case involves Dr Wright’s claim that he is the author of the 2008 academic paper the “Bitcoin Whitepaper”. While initially the paper was allegedly only sent to a cryptography mailing list it was subsequently published on the Bitcoin.com website and released under the pseudonym Satoshi Nakamoto. As such, the pseudonymous inventor, Satoshi Nakamoto is widely regarded as the inventor of Bitcoin and the electronic peer-to-peer currency and its associated blockchain technology. The 9 paged document introduced the idea of Bitcoin and basically paved the way for cryptocurrency as it is known today. It is widely believed that the paper was authored by the creator of Bitcoin and Dr White, while claiming to be said author, claims for infringement of copyright against the owners of the Bitcoin.com website by making a copy of the White Paper available on its website.

The Bitcoin.com website’s domain owner is described only as “C0BRA” and is itself a pseudonym for unknown parties. They have, thus far, refused to confirm their name or postal address and therein lies the issue; it is unknown who is responsible for the website as they have refused to identify themselves within the initial proceedings or the associated costs proceedings. This raises the question: can unknown parties really be involved in litigation if they refuse to identify themselves?

The Case

The costs proceedings in question follow Dr Wright’s litigation in which the defendant(s), listed only as “person or persons unknown”, failed to file an acknowledgement of service or a Defence so as not to submit to an earlier order requiring the defendant to identify themselves should either of these be filed. Since judgement was awarded in default the unknown defendant instructed costs lawyers and counsel to deal with the associated costs claim. 

The fact that the unnamed defendant was able to instruct legal representatives anonymously is perturbing; shouldn’t costs lawyers be held to the same regulatory requirements when it comes to anti-money laundering and the standard “know your client” checks? It appears that the instruction received by the defendant’s legal representatives was from a nominated email address. The claimant raised issue with this and questioned if the defendant was able to take part in proceedings and the assessment if they refused to identify themselves. It was ordered that this issue should be heard as a preliminary issue and the claimant applied for an order that the defendant should be forced to identify themselves or be debarred from being involved any further in the proceedings, which would effectively mean the defendant would take no further part in proceedings to deal with costs.

The Decision 

While the claimant submitted a supporting witness statement with the application, there was no such statement filed by the defendant in opposition. The question then arose as to whether “person or persons unknown”, as remaining unidentified, could take an active role in proceedings. 

During discussion, Costs Judge Rowley stated “…In my view, it is plain that a party is expected to identify themselves when first actively involved in the proceedings. That requirement is clear from the rules concerning the commencement of a claim and the filing of a response to that claim.” He went on to state that Mann J’s comments in a previous hearing regarding the need for the defendant to “have to identify themselves if they are going to challenge” indicated to him that “…any active involvement on the part of the defendant would have come at the price of self-identification”. 

In reaching his decision Costs Judge Rowley concluded by saying “…I have come to the conclusion that if the defendant wishes to challenge the claimant’s bill of costs, then they will have to identify themselves in the manner indicated in the application notice. Until that has occurred, the court cannot take notice of the points of dispute that have been served. The procedural position is the same as if no points of dispute have been served at all and the claimant would be entitled to seek a default costs certificate.”

There is no precedent covering the issue that arose in this case. Costs Judge Rowley concluded that this was because the point was, in fact, quite a simply one. Nevertheless, Costs Judge Rowley granted the defendant permission to appeal the decision. In doing so, he expressed the view that any appeal should be brought within 21 days of the handing down of the judgment. If no such appeal was to be lodged, then the defendant would have a further 14 days to identify themselves. In the absence of either an appeal or an identification, the claimant is at liberty to obtain a default costs certificate. 

Should the defendant continue to fail to identify itself, Costs Judge Rowley’s decision means the defendant can pay no further active part in the proceedings. The consequence being that without identification no points of dispute can be served leaving the claimant free to request a default costs certificate for the full amount of the costs claimed. 

In a postscript to his judgment, Cost Judge Rowley determined that advising upon any appeal and drafting appeal documents was not “active engagement” in the detailed assessment proceedings, to ensure that the Costs Lawyer and Counsel instructed by the defendant could properly interact with the court and the claimant in relation to the issue of any appeal.

What’s Next?

The question remains whether any default costs certificate obtained could be successfully against a person or persons unknown? It is unlikely that the defendant will submit to identification. The author and readers of this article will have to wait in anticipation of the final outcome.