On the seventh day of Christmas, the High Court gave to me…seven fraudsters fleeing

With Advent upon us, and Christmas on the horizon, RPC takes a musical look back at the most important English judgments of 2018. Liability for all failures of numbering, rhythm and rhyme is hereby excluded.

A Home Office report in July 2018 found that in 2015/16 there were 3.6m incidents of fraud with an immediate cost of £3.04bn and 2m incidents of cybercrime with an immediate cost of £526m.^[1]  It seems improbable that the number or value of those incidents has declined since then, and certainly fraud of all types has had a busy 12 months in the English courts.

To identify fraudsters, the courts granted orders requiring 'persons unknown' to identify themselves.^[2] To help track down the assets taken, the courts:

• granted freezing injunctions, both domestic and worldwide, against both known entities^[3] and unknown persons,^[4] and orders to disclose assets;^[5]
• insisted on attendance in person at cross-examination on a defendant's asset disclosure, notwithstanding an increased risk for the defendant of being extradited;^[6] and
• required third parties to disclose information under Norwich Pharmacal orders (where the third party is mixed up in the wrongdoing) and Bankers Trust orders (to assist in finding the missing assets).^[7]

 To pursue fraudsters and those (with greater or lesser culpability) who help them, the courts have:

• permitted service to take place by unusual methods, such as text and data rooms;^[8]
• held that enabling a breach of a freezing order (a contempt of court) by a third party could be the "unlawful means" in an unlawful means conspiracy, giving a victim of fraud a free-standing claim against the third party, as well as the pre-existing claim against the fraudster;^[9]
• re-confirmed that a freestanding claim in negligence may lie against an institution who pays away money when it has been put on inquiry that the payments may be fraudulent;^[10] and
• announced a new court to deal specifically with fraud and cybercrime.

To mix Christmas songs, you better watch out, I'm telling you why: the English court may not be as good as Santa Claus in knowing if you've been naughty or nice, bad or good, but it's rather better at taking away the benefits of the naughtiness.  

For more details on the cases discussed, see here, here and here. For the Terralex guide to asset tracing around the world, see here.

The Twelve Judgments of Christmas (2018)

On the first day of Christmas, the High Court gave to me…a privilege in E-N-RC. 

On the second day of Christmas, the High Court gave to me…two LIBOR reps. 

On the third day of Christmas, the High Court gave to me…three corporate crimes.

On the fourth day of Christmas, the High Court gave to me…four contracts.

On the fifth day of Christmas, the High Court gave to me…five time bars! 

On the sixth day of Christmas, the High Court gave to me…six exclusion clauses.

On the seventh day of Christmas, the High Court gave to me…seven fraudsters fleeing.

On the eighth day of Christmas, the High Court gave to me…[to be continued]

^References

^{[1] The report estimates costs in anticipation of crime (ie preventative costs), costs as a consequence of crime (ie the damage caused) and costs in response to crime (ie investigation and prosecution). The figures I have used are the costs as a consequence of crime.}

^{[2] PML v Person(s) Unknown (Responsible for Demanding Money from the Claimant on 27 February 2018) [2018] EWHC 838 (QB)}

^{[3] Gulf Air BSC (C) v One Inflight [2018] EWHC 1019 (Comm), Angola v Perfectbit [2018] EWHC 965 (Comm), and many others}

^{[4] CMOC v Persons Unknown [2017] EWHC 3599 (Comm)}

^{[5] Angola v Perfectbit [2018] 3 WLUK 76 and other cases}

^{[6] Khrapunov v JSC BTA Bank [2018] EWCA Civ 819}

^{[7] Ho v Lloyds Bank Plc [2018] EWHC 2203 (QB), Miles Smith Broking Ltd v Barclays Bank Plc [2017] EWHC 3338 (Ch) and other cases}

^{[8] CMOC v Persons Unknown [2018] EWHC 2230 (Comm), LJY v Persons Unknown [2017] EWHC 3230 (QB)}

^{[9] JSC BTA Bank v Khrapunov [2018] UKSC 19}

^{[10] Singularis Holdings (In Liquidation) v Daiwa Capital Markets Europe [2018] EWCA Civ 84}