Civil Procedure

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High Court Endorses Seven Principles for Securing Precautionary Injunctions

Injunctions are typically sought by parties after wrongdoing has already taken place. However, the English courts may grant a ‘quia timet’ – or ‘precautionary’ – injunction to prevent an actionable wrong from being committed.

In University of Brighton v. Persons Unknown Occupying Land, the High Court of England and Wales granted a final injunction preventing protesters from occupying certain areas of the claimant’s executive administration office. This judgment provides a useful restatement of the principles applied by the courts when determining whether to award a precautionary injunction.

EU Plans To Regulate Third-Party Funding in Litigation and International Arbitration

On 13th September 2022, the EU Parliament voted to approve a resolution proposing a directive (the “Directive”) on the regulation of third-party funding entitled “Responsible private funding of litigation”. If adopted in its current state, the proposal would regulate Third-Party Funders (“TPFs”) funding proceedings in the European Union.

Contractual Dispute Resolution Procedure as a Condition Precedent: Clarity is Key

The case of Kajima Construction Europe (UK) Ltd v Children’s Ark Partnership Ltd[1] serves as a reminder: a contractual Dispute Resolution Provision (“DRP”) can be a condition precedent to commencing proceedings. In a departure from previous case law,[2] the High Court in Kajima found a DRP does not actually have to be expressed as a condition precedent to be enforceable as one.

Stolen Cryptoassets: Further Guidance on Injunctions and Jurisdiction

In Osbourne v Persons Unknown & Others, the High Court of England and Wales confirmed that there is ‘at least a realistically arguable case’ that non-fungible tokens are to be treated as property as a matter of English law and that their inherently unique nature makes them suitable objects of prohibitory injunctions.

The Court also held that it is ‘strongly arguable’ that when a cryptoasset is stolen from a victim located in England, a constructive trust arises that is governed by English law. Further, if that cryptoasset is subsequently transferred to others, the question of whether they are constructive trustees is also a matter of English law. As such, the Court has jurisdiction over claims against those subsequent recipients of the stolen cryptoasset regardless of their location.

Court of Appeal decides that cryptoasset software developers may have a duty to help recover bitcoin

The Court of Appeal has decided that cryptoasset software developers may owe fiduciary duties or a duty of care to help recover bitcoin which is inaccessible as a result of criminal activity.

This is not a final decision. The Court has simply decided that the claim, against foreign defendants, is arguable and can go to trial.

Crypto Exchange Found to Hold Stolen Assets on Trust for Victim of Crypto Crime

In Jones v Persons Unknown & Others the High Court made several rulings of interest in the developing area of crypto fraud litigation.

After granting judgment in favour of the claimant for claims of deceit and unjust enrichment against fraudsters, the court went on to rule that a crypto exchange controlling the wallet holding the claimant’s stolen Bitcoin was a constructive trustee. The court ordered the fraudsters and the exchange to deliver up the Bitcoin to the claimant.

The decision that an exchange is a constructive trustee in these circumstances remains controversial and will likely be tested in future contested litigation where the stolen funds have been deposited and then withdrawn from an innocent exchange. Contested cases may also explore the question of whether and in what circumstances stolen crypto assets can be traced through intermediary accounts, particularly where they have been mixed with other assets that are not part of the fraud.

Privilege: Privacy and Confidentiality Are Not to Be Equated

In Jinxin Inc v Aser Media PTE Ltd & Others, the High Court of England and Wales determined that directors’ personal emails and documents on a company’s computer systems were confidential, despite the company’s ability to monitor and access them. In reaching that decision, the judge stated that the parties were mistaken in describing the reasonable expectation of privacy as a touchstone of confidentiality: while the tests for both confidentiality and privacy are objective and may lead to the same answer on the same facts, they should not be equated as they have been developed on different legal foundations and protect different interests. The key element for a claim for confidentiality in information that has been shared with a third party is whether the information was shared in circumstances importing an obligation of confidence on that third party.

Crypto-Recovery: Bitcoin Association Produces Software to Freeze Coins

As reported in a blog post earlier this year, the High Court of England and Wales held in Tulip Trading Limited v Bitcoin Association for BSV & Others that software developers do not owe a legal duty of care to assist owners in recovering lost or stolen cryptocurrency. Despite the High Court’s decision, Bitcoin Association agreed a settlement with Tulip Trading, which included a commitment that it would release software making it possible for bitcoin to be frozen where a court order has been issued to this effect. Last month, Bitcoin Association announced that it has now done so.