The High Court recently awarded damages to a claimant in a cyber–fraud case involving a world-wide freezing order against "persons unknown", the first of its kind in a financial fraud case1. In addition, service was permitted via the novel methods of WhatsApp and Facebook Messenger and by access to an online data room.
The Judge gave judgment against "persons unknown" and 28 other named defendants in CMOC Sales & Marketing Limited v Persons Unknown and 30 others, a case which demonstrates how the Court is prepared to adopt innovative approaches to keep pace with modern technology.
Background
The case concerned an email fraud in which hackers sent emails from CMOC's email accounts instructing CMOC's bank to transfer over US$8 million to various recipients. The fraud was international in its scope: the stolen funds were paid into accounts at 50 third party banks in 19 different jurisdictions.
World-wide freezing order
At the first hearing in October 2017, the Judge granted the first world-wide freezing order in respect of bank accounts against "persons unknown", i.e. against no named defendants. Broadly, this included any person who had carried out, assisted or participated in the fraud, as well as the recipients of the misappropriated sums. The order enabled particular defendants to be identified by obtaining disclosure orders against the third party banks.
The Judge stated that injunctive relief against persons unknown is particularly appropriate where they are unknown because of their activities as hackers. The Judge considered that there was good reason to extend this principle to freezing orders, especially in international fraud litigation, since it facilitated the grant of relief in the form of third party banks freezing the relevant bank accounts. The Judge stated that this extension of the Court's jurisdiction in these circumstances "reflects the need for the procedural armoury of the court to be sufficient to meet the challenges posed by the modern electronic methods of communication and of doing business".
New methods of service
The Court permitted service via the defendants' Facebook Messenger and WhatsApp accounts, where these were identifiable. The Judge highlighted that WhatsApp has the particular virtue that it will show the sender of the message when the message has been read by the addressee.
The Court also permitted service by access to an online data room to serve the third party banks by way of separate emails containing a link to the data room and an access code. This proved to be a practical method of service, given the banks' locations in multiple jurisdictions.
In the Judge's concluding remarks, he stated that the Court will consider "proactively different forms of alternative service" where they can be justified in the particular case. As with the developments in freezing orders, this shows that the Court recognises that innovations and versatility are vital to respond to developments in technology.
If you would like more information on any of the issues raised, please do not hesitate to contact the authors below or your usual Ashurst contact.
Authors: David Capps, Partner; Sophie Law, Senior Associate; William Byrne, Solicitor.
1. Such injunctions against "persons unknown" have previously been used in trespass or libel cases, but not in cases involving financial fraud.
