Civil Restraint Orders - COPA v Wright
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| Author Satoshi Nakamoto Public Domain Source Wikimedia Commons |
This was an application by Crypto Open Patent Alliance ("COPA") and SquaredUp Europe Ltd ("SquaredUp") for a General Civil Restraint Order ("GCRO") or, alternatively. an Extended Civil Restraint Order ("ECRO") against Dr Craig Steven Wright ("Dr Wright"). Para 4.2 (1(b) and (c) of Practice Direction 3C - Civil Restraint Orders provides that a GCRO made by a High Court judge restrains the party against whom it is made from issuing any claim or making any application without first obtaining the permission of the judge identified in the order. Para 3.2 (1) (b) and (c) of that practice direction provides that an ECRO made by a High Court judge restrains the party against whom it is made from issuing claims or making applications in the High Court or the County Court oncerning any matter involving or relating to or touching upon or leading to the proceedings in which the order is made without first obtaining the permission of a judge identified in the order.
Rationale for Civil Restraint Orders
In Nowak v Nursing and Midwifery Council [2013] EWHC 1932 (QB), Mr Justice Leggatt said at paras [58] and [59] of his judgment that:
"[58]…[T]he rationale for the regime of civil restraint orders is that a litigant who makes claims or applications which have absolutely no merit harms the administration of justice by wasting the limited time and resources of the courts. Such claims and applications consume public funds and divert the courts from dealing with cases which have real merit. Litigants who repeatedly make hopeless claims or applications impose costs on others for no good purpose…
[59] It is important to note that a civil restraint order does not prohibit access to the courts. It merely requires a person who has repeatedly made wholly unmeritorious claims or applications to have any new claim or application which falls within the scope of the order reviewed by a judge at the outset to determine whether it should be permitted to proceed. The purpose of a civil restraint order is simply to protect the court's process from abuse, and not to shut out claims or applications which are properly arguable.
"[58]…[T]he rationale for the regime of civil restraint orders is that a litigant who makes claims or applications which have absolutely no merit harms the administration of justice by wasting the limited time and resources of the courts. Such claims and applications consume public funds and divert the courts from dealing with cases which have real merit. Litigants who repeatedly make hopeless claims or applications impose costs on others for no good purpose…
[59] It is important to note that a civil restraint order does not prohibit access to the courts. It merely requires a person who has repeatedly made wholly unmeritorious claims or applications to have any new claim or application which falls within the scope of the order reviewed by a judge at the outset to determine whether it should be permitted to proceed. The purpose of a civil restraint order is simply to protect the court's process from abuse, and not to shut out claims or applications which are properly arguable.
Requirements for a Civil Restraint Order
Referring to paras [63] to [70] of Mr Justice Leggatt's judgment in Nowak, Mr Justice Snowden, Vice-Chancellor of the County Palatine of Lancastter directed himself at para [44] of his judgment in London Borough of Camden Council and another v Saint Benedict's Land Trust Ltd [2019] EWHC 3576 (Ch) (20 Dec 2019) that
"In considering whether to make a civil restraint order and, if so, what form of order to make, there are essentially three questions for the court (see Nowak at [63]-[70]):
i) whether the litigant has persistently issued claims or made applications which are totally without merit;
ii) whether an objective assessment of the risk which the litigant poses demonstrates that he will, if unrestrained, issue further claims or make further applications which are an abuse of the court's process; and
iii) what order, if any, it is just and proportionate to make to address the risk identified?"
"In considering whether to make a civil restraint order and, if so, what form of order to make, there are essentially three questions for the court (see Nowak at [63]-[70]):
i) whether the litigant has persistently issued claims or made applications which are totally without merit;
ii) whether an objective assessment of the risk which the litigant poses demonstrates that he will, if unrestrained, issue further claims or make further applications which are an abuse of the court's process; and
iii) what order, if any, it is just and proportionate to make to address the risk identified?"
Mr Justice Mellor directed himself similarly at para [9] of his judgment.
Related Proceedings
For several years, Dr Wright had claimed to be the creator of Bitcoin and the author of Bitcoin: A Peer-to-Peer Electronic Cash System and the Bitcoin source code. Anyone challenging his claim was likely to be sued or threatened with legal proceedings. In Crypto Open Patent Alliance v Craig Steven Wright [2024] EWHC 1198 (Ch) (20 May 2024), Mr Justice Mellor considered Dr Wright's claim and found it to be ill-founded. I discussed his judgment in Bitcoin - COPA v Wright on 11 June 2024, his lordship's consequential orders in Consequential Orders and Directions - COPA v Wright on 21 July 2021 and his finding that Dr Wright had been in contempt of court in Contempt of Court - COPA v Wright on 31 Dec 2024.
The Hearing
COPA and Squaredup issued their applications on 21 Nov 2024. That was before the hearing of COPA's application to commit Dr Wright for contempt of court which took place on 20 Dec 2024 (see Crypto Open Patent Alliance v Wright [2024] EWHC 3315 (Ch) (19 Dec 2024) and [2024] EWHC 3316 (Ch) (20 Dec 2024)). The applications for a civil restraint order were listed for 7 March 2025.
Mr Justice Mellor was satisfied that the application notices were properly served on Dr Wright. Dr Wright appeared to have been aware of the hearing. He sent an email a few days earlier to say that he would not take part because he had been injured in a motorbike accident. He did not ask for an adjournment or make use of a video link that the court offered him. Nor did he instruct solicitors or counsel.
The judge heard the application on 7 March 2025. At the end of the hearing, he made a general civil restraint order against Dr Wright. The GCRO will remain in effect until 7 March 2028, after which COPA or SquaredUp may apply to extend the order upon notice to Dr Wright pursuant to para 4.10 of PD 3C.
He referred Dr Wright's case to the Attorney General to consider whether the Attorney should apply for a civil proceedings order under s.42 (1) of the Senior Courts Act 1981 against Dr Wright, Finally, the judge ordered Dr Wright to pay the costs of £100,000 to the and Crypto Open Patent Alliance ("COPA") and SquaredUp Europe Ltd ("SquaredUp") within 14 days.
Reasons for the Order
The learned judge handed down the reasons for his order in Crypto Open Patent Alliance v Wright [2025] EWHC 1139 (Ch) on 12 May 2025.
Dr Wright's Conduct
Mr Justice Mellor considered Dr Wright's litigation between para [20] and para [34] of his judgment, Dr Wright's application for permission to appeal between para [35] and para [41], his new claim and the contempt application between para [42] and para [54], Dr Wright's other litigation between para [55] and para [66], his applications in paras [67] and [68], his threats to continue litigation between paras [69] and [71] and recent developments in para [72].
Whether Dr Wright had persistently Issued Claims or Made Applications which were Totally Without Merit
His lordship found at para [74] that Dr Wright had issued substantially more than the threshold level of 3 claims or applications that were totally without merit. He started with the 4 sets of proceedings that he had personally certified, namely the BTC Core Claim, the Coinbase Claim, the Kraken Claim and the Tulip Trading Claim, which I discussed in Bitcoin - COPA v Wright. He added Dr Wright's application for permission to appeal, which Lord Justice Arnold certified as totally without merit. He also took into account litigation that had not been certified as totally without merit, such as Dr Wright's application for permission to appeal to the Supreme Court, certain new claims in this country, Dr Wright's defence of COPA's claim, proceedings in Antigua and Norway and even some actions that may have been procedurally valid but were inherently dishonest.
Mr Justice Mellor had no doubt that this first consideration was more than amply satisfied.
In the judge's view, the evidence before the Court was overwhelming. All three considerations pointed in favour of the grant of a GCRO against Dr Wright. His lordship was completely satisfied that an ECRO would not provide adequate protection and would be an insufficient response to Dr Wright's conduct. He therefore concluded that a GCRO was warranted and appropriate.
"(a) no civil proceedings shall without the leave of the High Court be instituted in any court by the person against whom the order is made;
(b) any civil proceedings instituted by him in any court before the making of the order shall not be continued by him without the leave of the High Court; and
(c) no application (other than one for leave under this section) shall be made by him, in any civil proceedings instituted in any court by any person, without the leave of the High Court."
Whether there was a Risk of Further Baseless Claims or Applications
The learned judge directed himself at [82] that the second consideration required an objective assessment of the risk of Dr Wright's issuing further claims or applications which are totally without merit unless he is restrained by an appropriate form of civil restraint order. The judge reviewed Dr Wright's conduct and found no evidence of a Damascene conversion or remorse. He concluded at [89] that there was a very significant risk that Dr Wright would pursue more abusive claims in the future.
What Order was Just and Proportionate to address the Risk Identified
In the judge's view, the evidence before the Court was overwhelming. All three considerations pointed in favour of the grant of a GCRO against Dr Wright. His lordship was completely satisfied that an ECRO would not provide adequate protection and would be an insufficient response to Dr Wright's conduct. He therefore concluded that a GCRO was warranted and appropriate.
Reference to the Attorney General
During the hearing, COPA and SquaredUp reminded the judge of the Attorney General's power under s.42 (1) of the Senior Courts Act 1981 to seek a civil proceedings order and invited his lordship to refer the case to the Attorney General so that he could decide whether or not to make such an application. S.42 (1A) of the Act defines a "civil proceedings order" as an order that
"(a) no civil proceedings shall without the leave of the High Court be instituted in any court by the person against whom the order is made;
(b) any civil proceedings instituted by him in any court before the making of the order shall not be continued by him without the leave of the High Court; and
(c) no application (other than one for leave under this section) shall be made by him, in any civil proceedings instituted in any court by any person, without the leave of the High Court."
It is therefore even more restrictive than a GCRO.
Comment
Comment
Mr Justice Mellor's judgment sets out clearly and concisely the requirements for a GCRO. It should therefore interest all civil practitioners and not just IP specialists. This should bring to an end, at least in England and Wales, an extraordinary series of lawsuits over the identity of Satoshi Nakamoto. Anyone wishing to discuss this article is welcome to call me on 020 7404 5252 during UK office hours or send me a message through my contact page at any time.
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