Cryptocurrency Blogger: “Craig Wright Is a Fraud.” Wright: “Libel!” Court: “Your Litigation Lies Mean You Win £1”

The issue on this appeal is whether damages for defamation can properly be reduced to reflect the claimant’s fraudulent exaggeration of the claim. That is what the trial judge did here. The appellant says that he was wrong in law to do so because it can never be legitimate to make a reduction on that ground.

The appellant is Dr Craig Wright. He is a businessman active in the field of cryptocurrency who maintains that he is Satoshi Nakamoto (“Satoshi”). Satoshi is the name used by the author or authors of a famous 2008 “White Paper” entitled Bitcoin: a Peer to Peer Electronic Cash System. It is widely believed that Satoshi invented the cryptocurrency of that name and currently holds a large quantity of Bitcoin. Dr Wright is involved in the promotion of something called “Bitcoin Satoshi Vision” or BSV. Dr Wright’s claim that he is Satoshi has been widely published.

In April 2019 Peter McCormack, a blogger and podcaster about cryptocurrency, posted a series of tweets about the appellant’s claims and conduct. He began with “Craig Wright is not Satoshi”. He repeated that assertion, adding “Craig Wright is a fraud”, “BSV is a fake Bitcoin run by frauds”, “Craig Wright fraudulently claimed to be Satoshi”, “let’s go to court and prove once and for all that he is a liar and a fraud”, and other similar statements. In October 2019 Mr McCormack also took part in a video discussion on YouTube in which he said, among other things, “Craig Wright is a fucking liar, and he’s a fraud; and he’s a moron; he is not Satoshi.” Dr Wright sued him for libel.

At the trial before Chamberlain J (“the judge”), Mr McCormack admitted responsibility for all the tweets, that they meant that “Dr Wright is not Satoshi and his claims to be Satoshi are fraudulent”, and that this meaning was defamatory at common law. The judge held that Mr McCormack was also responsible for the publication of the words he spoke in the YouTube broadcast and that those words meant, in their context, that “there were reasonable grounds for questioning or enquiring into whether Dr Wright had fraudulently claimed to be Satoshi”. Mr McCormack accepted that this imputation was also defamatory at common law.

Mr McCormack had abandoned any attempt to prove that his allegations were true, and he advanced no other defence to the claim. The outcome of the case therefore turned on the serious harm requirement laid down in s 1(1) of the Defamation Act 2013. This provides that “A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant.” This means that a claimant must prove as a fact that his reputation has actually suffered serious harm as a result of the publication complained of, or that this is likely to happen: Lachaux v Independent Print Ltd [2019] UKSC 27, [2020] AC 612.

The judge held that the case on serious harm which Dr Wright presented at the trial did satisfy the statutory requirement. But he also found that the different case on serious harm which Dr Wright had been putting forward until he abandoned it shortly before the trial was “deliberately false”. In other words, Dr Wright had told lies. The judge said that although damages would have been reduced for other reasons, he would still have made “a more than minimal award” were it not for the lies. Because of the lies the judge reduced his award to a nominal £1.

Dr Wright now appeals on the single ground that “the trial judge was wrong to hold that the Claimant’s litigation misconduct could or should serve to reduce his general compensatory damages to a nominal sum of £1.” Dr Wright does not challenge any of the judge’s findings of fact….

The judge took account of the claimant’s lies and his attempt to deceive the court as part of the process of ascertaining the claimant’s entitlement, namely a sum in damages that would be proportionate to the aims of compensating and appropriately vindicating the relevant aspect of the claimant’s reputation. In this case, where the libel was an accusation of dishonesty, the dishonest conduct of the litigation was relevant for that purpose. This follows from the particular nature of the interest protected by the law of defamation.