Methods of service of court proceedings - Electronic or even by NFT

Providing more than one email address for service

The first case, is Entertainment One UK Ltd & Anor v Sconnect Co Ltd & Ors [2022] EWHC 3295

There were two applications before the Court in this case being an application by the Claimant for a declaration that service on the Defendants of a Claim Form and Particulars of Claim made by email on 24 January 2022 was effective and that, if not effective, seeking an order for service of the Claim Form by an alternative method pursuant to CPR 6.15 and 6.27. 

The Defendant had also made an application seeking a declaration that: “the English court has no jurisdiction to try the claims brought against each of the Defendants” on the grounds that service was defective and that “the Defendants do not target the UK market”.

The Court held that a purposive approach was needed when interpreting Practice Direction 6A on electronic service of documents. Failure on the part of a serving party to ask the recipient about limitations on accepting service by electronic means is not necessarily fatal to good service. Likewise, service is not automatically defective where the defendants’ solicitors specify more than one email address at which to effect service. Moreover, if a bilateral service treaty is in force but alternative methods of service are permitted then the applicant only needs to show ‘good reason’, rather than ‘exceptional reasons’, for alternative service.

The Court therefore held that the Claim Form and Particulars of Claim were validly served on the Defendants and that service was effected on 26 January 2022 and also held that the defendants targeted the UK market, and that England and Wales was the appropriate forum.

This case is contradictory to the earlier case of Tax Returned Ltd & Ors, R (On the Application Of) v Commissioners for His Majesty's Revenue and Customs [2022] EWHC 2515 which also concerned service by email. Here, in pre-action correspondence HMRC provided two email addresses for service. The claim form was sent to one of the two email addresses but not to both and in considering whether the claim had been served, the Judge considered that 4.1 of the Civil Procedure Rules refers to an “email address” and not email addresses and so held that as HMRC had not provided a single email address, service could not take place by email.

When serving documents electronically, it is advisable to take a cautious approach, particularly when, more than 1 email address is provided for service. For example, contact the otherside and ask for clarification on which email address should be used for service and also ask if there are any limitations to accepting service by email such as size of attachments etc.

The CPR Rules are due to be amended in April 2023 to clarify the position with service by email by providing for “email address or email addresses” and also specifically stating that where a party provides multiple email addresses for service, that a document may be served by sending it to any two of the email addresses provided. This amendment will resolve the current uncertainty about service by email where more than one email address is provided.  

 

Service by NFT

The case of Osbourne v Persons Unknown Category A & Ors [2023] EWHC 39 (KB) which relates to misappropriation of a non-fungible token (“NFT”). Non-fungible tokens are assets that have been tokenised via a blockchain. They are assigned unique identification codes and metadata that distinguish them from other tokens. 

The Claimant, Mrs Osbourne, was domiciled in England and the claim was brought against unknown hackers. The Court considered in this case whether the claimant could serve the claim form out of the jurisdiction on persons unknown given that the NFTs, after their misappropriation, will have been transferred through several wallets.

What sets this case apart from previous cases is that the judge found that there was scope to argue that the question of whether property is in the jurisdiction for the purposes of granting permission to serve out of the jurisdiction is to be determined at the time that the application is made and not when the cause of action arose.

The judge found that it was strongly arguable that a constructive trust alleged to have been created when the NFTs were transferred from the claimant’s wallet was governed by English law, and so persons subsequently possessing or controlling the NFTs became constructive trustees under English law when they received those NFTs. Permission to serve out of the jurisdiction could therefore be granted.

This case is believed to be the first case in which the court has granted permission for a claim form and other documents to be served solely by NFT and the court allowed service by this method having been satisfied that there was no other available method of service. 

This case may be of assistance to those who have suffered crypto-asset fraud to pursue claims against anonymous fraudsters/hackers.

Whilst the Civil Procedure Rules still refer to service by fax, the court is allowing service by electronic means including NFT and social media in appropriate cases. This case demonstrates that when other more usual methods of service are just not possible, the court is willing to adapt to technological developments.

 

What to do if you need legal advice 

If you require legal assistance, our Dispute Resolution Team can be of help today. Rachel Brown, Associate – Chartered Legal Executive, can also be contacted on [email protected].