In the recent High Court decision of Wright v McCormack (WFO Judgment) [2024] EWHC 1735 (KB), in the context of recovery of costs following a libel trial, a worldwide freezing order (WFO) was granted against a fraudster who claimed to be the inventor of cryptocurrency.
A WFO is a type of injunction ordered by a court, to restrain a party from unjustifiable disposing of their own assets. Such assets commonly include bank accounts, shares, land or property.
What were the facts of Wright v McCormack?
On its facts, the WFO application was made in the context of a defamation claim brought by Dr Craig Wright against Peter McCormack, the judgment for which was handed down in August 2022. Mr McCormack, who runs a podcast about issues relating to cryptocurrency, made various posts on social media alleging that Dr Wright had fraudulently claimed to be Satoshi Nakamoto, the presumed pseudonymous person or one of the group of people, who developed Bitcoin.
It was held by Mr Justice Chamberlain at the conclusion of that trial that Dr Wright had established liability, but had lied about the facts relating to harm to his reputation. As such, taking his dishonest conduct into consideration, he was awarded only nominal damages in the sum of £1.
In a later judgment within separate proceedings, handed down in May 2024, the High Court held that Dr Wright was not Satoshi Nakamoto, and that he had lied and forged documents to prove that he was. It was said by Mr Justice Mellor that the claim was part of a “mendacious overall campaign by Dr Wright and his backers” to establish Dr Wright as Satoshi Nakamoto and, ultimately, to obtain access to all or part of the large quantity of Bitcoin attributed to Satoshi, worth several billions. He concluded that Dr Wright was using the law of defamation to silence anyone who dared to contend that Dr Wright was not Satoshi Nakamoto or to question his claim.
What was the decision in Wright v McCormack?
Mr Justice Mellor granted a WFO against Dr Wright in the sum of £1.548m so as to protect the sums that Mr McCormack was entitled to recover relating to the costs of the libel litigation. It was concluded by the High Court not only that Mr McCormack had a good arguable case for recovery of costs in this sum, but that there remained a real risk of dissipation of assets. In all the circumstances, it was also held by Mellor J to be just and convenient to grant the WFO, not least because Mr McCormack should not face a risk of the costs orders he secures going unsatisfied.
In light of the background to the WFO application, Mr Justice Mellor emphasised the “big picture” in deciding whether or not to grant it. Essentially, Dr Wright’s defamation claim was founded on a lie and was supported by a series of forged documents. Mr McCormack’s principal defence of truth was correct, even though he was forced to abandon that defence due to the pressure of costs. Mellor J went on to say that our law would be in “a sorry and sad state” if a litigant in the position of Mr McCormack was not able to recover his costs of having to fight that type of litigation.
Conclusion
You can request a WFO (Worldwide Freezing Order) at any point in a dispute. Many people apply for a WFO even before starting their legal claim because they're worried the other party might hide or move their assets. But you can also seek a WFO during the legal process and after the trial to make sure the respondent's assets stay put until the court's decision is carried out.
Legal disclaimer
The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.
Before acting on any of the information contained herein, expert advice should always be sought.