Reputation Update: The ‘Bitcoin libel case’ and issues of jurisdiction in English defamation law

Over the summer Mr Justice Nicklin handed down Judgment in the libel case of Craig Wright v Roger Ver in respect of jurisdiction under Section 9 of the Defamation Act 2013.

The Claimant is a computer scientist with a particular interest in cryptocurrencies and a national of Australia. He has lived in the United Kingdom since December 2015. The Defendant is a bitcoin investor who describes himself as a commentator within the bitcoin and cryptocurrency industries who is currently involved in several bitcoin related projects. The Defendant was born in the United States, in 1979, and moved to Japan in 2005. Since 2014 he has been domiciled in, and a citizen of, St Kitts & Nevis. Satoshi Nakamoto is the name used by the pseudonymous person(s) who developed bitcoin.

The alleged defamatory meaning was that “The Claimant had fraudulently claimed to be Satoshi Nakamoto, that is to say the person, or one of the group of people, who developed bitcoin.”.

Section 9 of the Defamation Act says that in (1) an action for defamation against a person who is not domiciled (a) in the United Kingdom; (b) in another Member State; or (c) in a state which is for the time being a contracting party to the Lugano Convention, (2) the court does not have jurisdiction to hear and determine an action to which this section applies unless the court is satisfied that, of all the places in which the statement complained of has been published, England and Wales is clearly the most appropriate place in which to bring an action in respect of the statement (our emphasis).

The Judge stated that:

“…. the required assessment under s.9(2) can be approached in two stages:

i) Stage 1: assess the nature of the publication and its extent in each jurisdiction.

A preponderance of publication in England and Wales is likely to be a weighty factor in demonstrating that England and Wales was clearly the most appropriate jurisdiction. If there has been more widespread publication elsewhere, then subject to any argument on ‘targeting’ and depending on the extent of the relative publication in the other jurisdictions, the claimant may struggle, simply on the basis of numbers, to satisfy the requirements of s.9(2).

ii) Stage 2: assess the evidence of harm to reputation in the jurisdictions in which there has been publication.

If a claimant can provide evidence of very serious harm to reputation in England and Wales, then s/he may well succeed in demonstrating that this jurisdiction is clearly the most appropriate, notwithstanding any conclusion, at stage 1, that there has been more extensive publication outside England and Wales. A claimant might be able to demonstrate, by clear evidence, serious harm to reputation arising from a relatively tiny publication in England and Wales; perhaps the product of a ‘well-directed arrow’. Alternatively, a claimant might be able to put forward a powerful inferential case based on the extent of publication and the geographical limits on his/her reputation. For example, a contestant on reality show broadcast only in the UK might be completely unknown outside the UK. If s/he were to be defamed in a global publication, and assuming that there was more than a de minimis publication in England and Wales, the Court might be satisfied that, notwithstanding a larger publication of the libel elsewhere, this jurisdiction was nevertheless clearly the most appropriate. In that example, the more extensive the publication in England and Wales, the more powerful would be the inference of reputational harm and the more likely that the Court would be satisfied that s.9(2) was met. Although it will engage similar issues, I should make clear that this analysis is entirely separate from the question of serious harm to reputation under s.1 Defamation Act 2013.”

The Judge confirmed that the assessment under s.9(2) is highly fact-specific and it is impossible to lay down hard rules. He stated that, in order to succeed, a claimant now has to show that the scales come decisively down in his/her favour.

In relation to stage 1 the Judge held that the most substantial publication of the statements complained of was in the US and the publications were not in any way ‘targeted’ at publishees in England and Wales. In relation to stage 2, he said that “the Claimant’s evidence as to the extent of harm that the publications have caused (or are likely to cause) is weak [and] lacks detail…”. Further, that there was no objective evidence of any harm to reputation within the jurisdiction, and, that the Claimant had failed to address whether and to what extent the publications complained of had harmed his reputation in other jurisdictions.

In this case the Claimant did not therefore satisfy the Judge that England and Wales was clearly the most appropriate place to bring his action for defamation. Subsequently, the Court had no jurisdiction to hear and determine the action, and, the action was struck out.

The case clearly demonstrates the hurdle that a claimant needs to overcome in a defamation action against a defendant who is not domiciled within the UK (or an EU/Lugano country). It is crucial therefore to gather as much evidence as possible before commencing litigation in order to satisfy stages 1 & 2.  This will not necessarily be straightforward, but if such evidence cannot be found, it may be an indication that England & Wales is likely not the most appropriate jurisdiction for the claim.

Of course, section 9 does not apply to cases brought by claimants who are not domiciled in the UK (EU or Lugano). It only relates to defendants who are not.