13 February 2023

Service of court documents - It is perhaps fair to say that the processes and procedures of the courts could be considered “traditional”. Employment of new technology to facilitate service of legal notices and court documents is not exactly commonplace.

However, a recent English decision in the High Court demonstrates a continuing willingness to consider alternative means of service where the recipient cannot be located or, in some cases, cannot be identified.

The court was asked to consider the issue of service by non-fungible token (NFT) in Osbourne v Persons Unknown Category A & Ors [2023] EWHC 39 (KB).

In November 2020, the claimant opened an account with the cryptoasset management platform, MetaMask. That account included 4 wallets, one of which was linked to an account that she held with Ozone Networks Inc (trading as Opensea), an online cryptoasset marketplace.

The claimant was the recipient of two NFTs with an estimated value of between £3,000 and £5,000  and which were deposited in one of her wallets in February 2022. Subsequently, and unknown to the claimant, the NFTs were moved out of her wallet by an unidentified third party.

Approximately a month later, the claimant became aware of the removal of the NFTs and engaged an investigator to look into the transfer. After raising court proceedings which included claims for unjust enrichment and misuse of private information, the claimant obtained an interim injunction preventing “persons unknown” from dealing with the NFTs. The order also allowed for service of the court papers on the defendants outwith England and by email to Opensea (where the account to which the NFTs had been transferred was held).

The court then granted orders against Opensea requiring it to disclose certain information about the email addresses linked with the recipient account. Further investigation suggested that the NFTs were resting in an account linked to an individual believed to be resident in South Africa and when one of the NFTs subsequently came up for sale on another cryptoasset marketplace, an interim injunction was sought against that individual. Orders were also sought to allow service of the claim form and the injunction by way of transfer of NFTs containing embedded hyperlinks to the court papers to the user wallets concerned.

The exception to the rule

In terms of the English Civil Procedure rules the court may allow service by alternative means where “it appears to the court that there is good reason to authorise service by a method or at a place not otherwise permitted”. One of the questions before the court was whether the circumstances constituted good reason.

The evidence before the court was that, with the exception of service by email on one of the defendants, no other method was available and no other method of service was available on the other defendants than by NFT sent to the relevant wallets. Having considered matters, the judge decided that these factors constituted good enough reason and permitted service by NFT.

The court documents were, however, served in redacted form as service by NFT effectively made the documents publicly available on the block chain. An unredacted version could subsequently be provided to the recipients.

Even within the UK the court rules on service of documents vary according to jurisdiction and the parties involved. However, this case is interesting in that in it shows a more practical approach to service, allowing methods of service that while not traditionally employed, are most likely to reach the recipients in the circumstances.

While the restrictions of covid presented a number of practical difficulties for parties, the courts and practitioners alike in litigating at that time, it did also result in some changes in court procedure that have been retained and have streamlined some processes. It remains to be seen whether service by methods such as NFT will be adopted wholesale, but decisions such as these give claimants some comfort that they will still be able to seek a remedy even in cases where service of court papers may be problematic.

Lynn Richmond, Partner & Accredited Specialist in Intellectual Property: lyr@bto.co.uk / 0131 222 2939