UK Court of Appeal Upholds Minimal Damages Award in Self-Proclaimed Bitcoin Creator Craig Wright’s Libel Case Due to ‘Lies’

News | July 31, 2023 By:

On Wednesday, July 26, 2023, the UK Court of Appeal upheld a High Court of Justice judge’s decision to reduce a libel claimant’s damages to just £1 after finding he had deliberately lied in pursuit of his claim.

The case involved Dr. Craig Wright, a businessman in the cryptocurrency sector, who sued a blogger, Peter McCormack, for libel over tweets and a YouTube video calling Dr. Wright a “fraud” and stating he had made fraudulent claims to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin.

The filing states:

“In April 2019 Peter McCormack, a blogger and podcaster about cryptocurrency, posted a series of tweets about the appellant’s claims and conduct. He began with “Craig Wright is not Satoshi”. He repeated that assertion, adding “Craig Wright is a fraud”, “BSV is a fake Bitcoin run by frauds”, “Craig Wright fraudulently claimed to be Satoshi”, “let’s go to court and prove once and for all that he is a liar and a fraud”, and other similar statements. In October 2019 Mr McCormack also took part in a video discussion on YouTube in which he said, among other things, “Craig Wright is a f*@king liar, and he’s a fraud; and he’s a moron; he is not Satoshi.” Dr. Wright sued him for libel.”

Mr. McCormack admitted publishing the statements but denied they were defamatory. In an October 2021 judgment, Justice Chamberlain, judge of the High Court of Justice King’s Bench Division, found the imputations were defamatory at common law. Mr. McCormack did not attempt to prove truth as a defense, so the case turned to whether serious harm to reputation could be established under section 1(1) of the Defamation Act 2013.

According to the filing, Dr. Wright originally pleaded a deliberately false case that various academic conferences had withdrawn invitations for him to speak after the publications of McCormack’s statements. Days before trial, when contradicted by evidence, he withdrew this aspect while maintaining it had been mostly true.

Judge Chamberlain found Dr. Wright’s original case on serious harm and supporting evidence was deliberately false. However, he was persuaded there was serious harm based on the gravity of the imputation, the extent of publication, and evidence of actual harm. But due to the lies, the judge reduced damages from a ‘more than minimal’ award to just £1.

Dr. Wright filed an appeal, arguing that the judge lacked the authority to reduce the damages in the manner applied. Wright’s legal representative drew a comparison between damages awarded for reputation injury and those for personal injury. It was contended that while it might be valid to diminish damages if the claimant’s reputation had already been harmed before the disputed publication, such reduction should not be justified by any post-publication misconduct.

However, the Court of Appeal affirmed the grant of nominal damages. It found the lies were relevant to assessing compensation and vindication needed to repair Dr. Wright’s reputation. The aim is to restore the claimant to the position before the libel, but post-publication lies reduce what is needed for vindication. The court stated that deliberately advancing a false case relevant to a central issue could properly reduce damages.

While there is no general rule that dishonesty reduces damages, the court distinguished defamation cases due to the different nature of reputational interests. It stated that the judge had not improperly deprived Dr. Wright of damages he was entitled to, but had taken the lies into account in deciding his entitlement to damages for this libel. The court rejected the argument that the lies were unconnected to the subject matter of the imputation.

In conclusion, the Court of Appeal ruled there was no injustice in the nominal award due to Dr. Wright’s deliberate deception, upholding the trial judge’s decision. The case illustrates how knowingly advancing a false case, if relevant, can significantly reduce libel damages for lack of need for vindication, even where serious harm is proven.

A copy of the original filing can be found here.