Judgement Embargo Breach: High Court Initiates Contempt Proceedings

In the case Wright v McCormack [2022] EWHC 3343 (KB), the High Court has taken it upon themselves to begin contempt proceedings against certain individuals who may have revealed the content of a judgment while it was still under embargo.

When a court is set to release a judgment, they typically provide a copy to the parties involved and their legal representatives a few days beforehand, but this copy is given on the condition that it is kept confidential until the official release of the judgment.

Lately, courts have become concerned about the increase in violations of this embargo, and in the case of R (on the application of Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWCA Civ 181, it was made clear that those who break the embargo in the future could face contempt proceedings. This situation emphasizes the importance of being careful about any communication that could be perceived as relating to a draft judgment before it is officially released, even if the case and judgment are not explicitly mentioned.

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History between Wright & McCormack

Dr. Wright brought a libel case against Mr. McCormack, alleging that Mr. McCormack’s statements that Dr. Wright was not the inventor of Bitcoin and that his claims to be the inventor were fraudulent had damaged Dr Wright’s reputation. At trial, the court found that some of Mr McCormack’s statements were defamatory and caused serious harm to Dr Wright’s reputation.

However, Mr. McCormack initially claimed that his statements were true, but later abandoned that defence due to the cost of a trial on the issue.

In a typical case, the claimant (Dr Wright) would be entitled to significant damages, but in this case, the judge awarded Dr. Wright only nominal damages of £1 because the judge believed that Dr. Wright had advanced a deliberately false case until shortly before the trial, and then changed his story, claiming that the errors were unintentional. The judge did not find this explanation to be truthful.

The Embargo

On July 26, 2022, Chamberlain J provided a draft of the judgment in a libel case to counsel under embargo, meaning that it was given to them in confidence and was not to be made public until its official release on August 1, 2022 at 12:00 PM. The usual terms of the embargo stated that the draft was to be kept confidential by the parties and their legal representatives and could not be disclosed to or used by anyone else. The parties were required to take all reasonable steps to maintain the confidentiality of the draft and were not allowed to take any external action in response to it before the official release of the judgment. Breaking these terms could be considered contempt of court.

Slack Posts

On the evening of July 26, 2022, Dr Wright made three posts on the “#bitcoin-general” channel of a Slack workspace called MetaNet. Slack is a communication platform used for business purposes that allows users to create “workspaces” and have conversations on particular topics within “channels” dedicated to those topics. The MetaNet workspace was created by a company that promotes education in the Bitcoin Satoshi Vision industry, and Dr Wright and his business partner promote this product. The “#bitcoin-general” channel has 290 members.

Dr Wright’s posts read: “If a person would spend 4 million to receive a dollar plus and 2 million costs…So the other side is bankrupt…What would you think? (edited),” “Ie. The only thing that matters is crushing other side,” and “Well. I would spend 4 million to make an enemy pay 1.”

Dr Wright claimed that these posts were meant to stimulate discussion among the members of the Slack channel and demonstrate his determined attitude towards his opponents, and he stated that he did not remember telling the members of the channel about the practice of providing parties with a draft judgment before it is made public and did not think that this practice would be widely known to them.

Emails

Dr Wright was sent an email by a member of his legal team on July 28th, which contained a summary of the judgment as a reply to an email about other litigation. He replied to the email, copying in 5 other people who were not allowed to know the details of the judgment.

Dr Wright claimed that he was unaware that there was a summary of the judgment at the end of the email chain when he included the others.

What did the High Court Decide?

Judge Chamberlain decided that contempt proceedings should be initiated against Dr Wright on the court’s own accord and scheduled to be heard by another judge for further instructions and a hearing.

The court was not satisfied with Dr. Wright’s explanation that the purpose of his Slack posts was simply to “promote debate” and not reveal the outcome of the draft judgment, as there was a possibility that a court might determine that by posting those messages, Dr. Wright intended to disclose the substance of the judgment in violation of the embargo, which he had been informed about. The court considered three factors in coming to this conclusion:

1. Dr. Wright’s estimated costs were almost 4 million pounds, so anyone closely involved in the litigation would likely be aware of it;
2. The case had received significant attention from those interested in cryptocurrency;
3. The 290 members of the Slack channel were all individuals with an interest in cryptocurrency and specifically BSV, and anyone with basic knowledge of how High Court litigation operates would know that parties are typically provided with an embargoed copy of the judgment prior to it being issued, regardless of whether Dr. Wright had informed them of this.

The email Dr. Wright forwarded to other recipients may also be considered a breach of the embargo and potentially an additional contempt of court, depending on the court’s understanding of Dr. Wright’s intentions when he sent it.

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