IF YOU DON’T SAY WHO YOU ARE THEN YOU CANNOT ARGUE POINTS AT A DETAILED ASSESSMENT OF COSTS

In Wright v Person Or Persons Unknown Responsible for the Operation and Publication of the Website bitcoin.org [2022] EWHC 2982 (SCCO) Costs Judge Rowley held that if a paying party wanted to take part in a detailed assessment of costs then it had to state who it was.  In the absence of identification by the defendant the claimant was entitled to a default costs certificate.

“I have concluded that the reason there are no such cases is because the point is in fact a simple one. If a party is not prepared to name itself, then it cannot take part in the proceedings.”

THE CASE

The claimant obtained judgment against the defendant operators of a website. Throughout the action the defendant declined to confirm its name and postal address in electronic communications with the claimant’s solicitors.  It operated under the pseudonym “CØBRA” An order was made  against the defendant for costs to be assessed.  At the beginning of the assessment of costs a preliminary point was taken by the claimant as to whether the defendant could take part in the assessment when it refused to state its identity.   The judge ordered that this be heard as a preliminary issue.

THE CLAIMANT’S APPLICATION

The claimant sought an order that unless the defendant disclosed its identity it be debarred from taking part in the assessment.

“The claimant seeks an order:

1. Pursuant to CPR 3.1(2)(m) that, unless the Defendant reveals their identity (which should be verifiable) to the Court and the Claimant within 7 days, the Defendant shall be debarred from participating in the Detailed Assessment and the Defendant’s Points of Dispute shall be disregarded by the Court.

2. That the Defendant do pay the Claimant’s costs of this application, such costs to be summarily assessed on the indemnity basis.”

THE JUDGMENT

The judge accepted the claimant’s argument. The situation was (perhaps unsurprisingly) without precedent.  However a party that wanted to participate in the court’s process had to identify itself.

1. 1. I have been relatively sparing in setting out the numerous cases referred to by counsel in their submissions. They confirmed that they had not been able to find any reported decisions where persons unknown had taken an active role in proceedings. The cases referred to by counsel were therefore not directly relevant to the situation before me. Having reflected at some length on the submissions of counsel, I have come to the conclusion that the authorities relied upon do not really bear upon this particular case.

1. 1. Most of the cases referred to by the parties related to proceedings brought against persons unknown where they had taken no part in the proceedings whatsoever. That lack of engagement is not surprising since the activities of the defendant or defendants often involve potentially criminal activity. The purpose of the proceedings was generally to obtain some form of injunction and the question of damages was a secondary consideration. To that extent, these proceedings are in line with those reported cases.

1. 1. However, the defendant in this case appears to have taken exception to the extent of the costs incurred by the claimant, according to his bill of costs, and felt obliged to counter that claim. That is in contrast to the substantive proceedings where the defendant seemed to be rather sanguine about the effect of the injunction, namely the removal of the relevant document from the website. Consequently, the defendant served points of dispute upon the claimant and, rather surprisingly to me, the claimant simply responded with a reply to those points of dispute.

1. 1. Such activities are essentially pre-proceedings since they do not involve the court until a request for a detailed assessment hearing is made. Prior to that point, the documentation is simply served between the parties.

1. 1. The defendant’s apparent decision to be involved in the detailed assessment of the claimant’s costs, but not in the substantive proceedings, leads to an odd procedural position. As Ms Bedford pointed out, a party who serves points of dispute does not have to set out their name and address for service in order to comply with Part 47. It is true that Precedent G contains the phrase “Served on……[date] by………[name] [legal representative of] the Defendant” but that frankly raises more questions than it answers. In this case it could have been completed with the pseudonym Cøbra or, if Mr Mackenzie had been instructed earlier, by his name. In neither situation would any identification have been required by the defendant. Mr Kapoor suggested that the defendant ought to have amended the title of the proceedings when serving the points of dispute but that seems to me to be a point of little weight. I do not think the defendant can be criticised for simply utilising the existing heading when serving points of dispute particularly since at the time the defendant was not legally represented.

1. 1. The difficulty for the defendant, in my view, is that the rules, taken as a whole, clearly expect a party to identify themselves at the outset of proceedings. It is rare in the extreme that a party will only get involved in relation to the costs of the proceedings. Where a default judgment has been obtained it must almost always be the case that a default costs certificate would also be obtained if indeed the costs were not summarily assessed or limited to fixed costs when the default judgment was entered.

1. 1. I do not think therefore that the absence in Part 47 of any requirement to provide the name and address for service is any pointer when considering the expectation of the rules regarding identification. In my view, it is plain that a party is expected to identify themselves when first actively involved in the proceedings. That requirement is clear from the rules concerning the commencement of a claim and the filing of a response to that claim.

1. 1. Furthermore, at the hearing before Mann J, his comments regarding the need for the defendant to “have to identify themselves if they are going to challenge” indicates to me that any active involvement on the part of the defendant would have come at the price of self-identification. The terms of paragraph 9 of the order brook no alternative to that course of action in the substantive proceedings.

1. 1. Once it is accepted that identification is required to be involved in the proceedings, the difficulties identified by Ms Bedford fall away. There would be no question of the points of dispute being struck out and the defendant would be entitled to attend the hearing whether in person or by legal representation. But until that identification has occurred, in my judgment, the defendant cannot say that they have submitted to the jurisdiction of the court.

1. 1. Ms Bedford suggested that the serving of the points of dispute showed that the defendant had submitted to the jurisdiction. That would be correct if the defendant had provided the court with a name and address. But absent that information, there is no way that the court, for example, could sanction the defendant in the various ways provided for by the rules. I consider that the most that could be said is that the defendant is participating within the jurisdiction of the court. But that is not enough in my view. The limitation in the court’s power to control proceedings can be seen by considering what would happen if the defendant decided to change their view about that participation. At the most, the court might make an order for costs against the defendant but in the knowledge that any such order was almost certainly not going to be enforceable.

1. 1. Consequently, I have come to the conclusion that if the defendant wishes to challenge the claimant’s bill of costs, then they will have to identify themselves in the manner indicated in the application notice. Until that has occurred, the court cannot take notice of the points of dispute that have been served. The procedural position is the same as if no points of dispute have been served at all and the claimant would be entitled to seek a default costs certificate.

1. 1. Upon confirmation that neither counsel could locate any authority that was directly relevant to this case, I indicated that I was likely to give permission to appeal, whatever conclusion I subsequently reached. Upon reflection, I have concluded that the reason there are no such cases is because the point is in fact a simple one. If a party is not prepared to name itself, then it cannot take part in the proceedings. Where a party has concerns about the publication of its identity, an application to anonymise its name and address can be made. I accept that that does not generally prevent the opponent from knowing who the party is, but that is the extent to which a party can be involved in proceedings and limit their identification.

1. 1. Having found against the defendant, the defendant’s difficulty in bringing an appeal is obvious. I suspect no appeal is going to be heard until such time as the defendant makes itself known (but that ultimately would be a matter for another judge). Consequently, although I will give permission to appeal this decision, that may be rendered nugatory by the defendant’s approach.

1. 1. Nevertheless, that is a matter for the defendant, and they must be given time in which to bring an appeal should they wish to do so. If no such appeal is brought, then the claimant will be entitled to request a default costs certificate if the defendant does not provide their name and an address for service.

1. 1. In order to make sure that matters do not drift, I would expect any appeal to be brought within 21 days of this judgment being handed down. If no such appeal is brought then the defendant should have a further 14 days in which to identify themselves if they are going to do so. In the absence of either an appeal or an identification, the claimant will be at liberty to seek a default costs certificate in five weeks’ time.

1. The upshot of this is that there is no purpose in the detailed assessment hearing listed for hearing on 28 to 30 November continuing to be listed and I will vacate those dates.