Parliament should respond to the Wright Affair by reforming UK defamation law
Last week brought us the news that Dr. Craig Steven Wright, an eccentric Australian who has long claimed to be Bitcoin’s pseudonymous creator Satoshi Nakamoto, was bench-slapped by the High Court, where Mr. Justice Mellor ruled at the conclusion of the proceedings that Wright was not Satoshi Nakamoto, not the author of the Bitcoin white paper, not the author of its software and, by extension, not the creator of Bitcoin.
This bench ruling comes after years of litigation and weeks of hearings around the question of the provenance of the Bitcoin white paper and software. Full details of the court’s findings on these points will be provided in a written judgment at a later date so I refrain from offering my own conclusions on the evidence, or an assessment of correctness of the ruling, here.
As is public knowledge, I was one of the first lawyers – if not the first lawyer – to represent a client on the business end of Wright’s years-long litigation campaign, when, in 2019, a Twitter user I know was the first crypto community member to receive legal threats from Wright's lawyers for claiming that Wright was not Satoshi, the very conclusion Mr. Justice Mellor also reached today.
A short time later, an acquaintance of mine, Peter McCormack, dared to say the same thing. Peter was promptly sued by Wright in England. Wright won his case against Peter, albeit winning only nominal damages of £1 due to certain deficiencies in Wright's case.
In my view, Wright's legal team chose to bring these claims in England for one reason, and one reason only: England is, and long has been, the easiest place in the English-speaking world to win a defamation action, because in England, the playing field is tilted so to the advantage of a claimant that even weak claims can win.
This is not a new problem, and its roots go deep. Defamation is an ancient tort with its origins in the landed aristocracy seeking to protect their names and reputations from lesser men. The Anglo-Saxon tort of scandalum magnatum, a “fake news” tort for defaming great men of the realm (and thus not a tort capable of being inflicted on lesser men), was used as early as the 13th century. In later years, various other torts like seditious libel were used to punish political dissent – even where that dissent should be substantially true – and the imposition of these ancient rules in the Thirteen Colonies, most famously in the John Peter Zenger trial of 1735, served as focal points around which a new, young nation, the United States of America, began to develop its fledgling judicial system which led, eventually, to its free speech doctrine embodied today by First Amendment jurisprudence.
In the modern formulation, defamation is the publication of a statement of fact to a third party, which is false, which is likely to cause serious harm to their reputation. In this respect it differs little from the tort in the United States. However, in England, the history of the tort – protecting the powerful from the powerless – has never been fully written out of its bones, because the burden of proof in a defamation action rests not with the claimant but with the defense.
Not with the Saxon noble with the ear of the King, but with the humble pamphleteer who dared to speak out about his abuses. Not with the Member of Parliament accused of some lecherous or disreputable conduct, but the journalist who reported on it. Not with a person claiming to be Bitcoin’s creator, offering nothing approaching definitive proof that he or she is (being a transaction or message signed with one of Satoshi’s private keys), and armed with institutional financial backing, but the humble Twitter user who simply observed what appeared to be true, based on a cold assessment of the facts, and dared to repeat what he thought was true in writing.
Put simply, at any time, in any defamation claim, the deck is always stacked against speakers and favors those who are most likely to be spoken about.
On a practical level, this means that it is conceivable that a future plaintiff in England seeking to conceal certain truths or propound certain falsehoods, but with knowledge of the totality of the circumstances concerning that conduct, confidence that he or she can control those variables, and possessing the resources to reasonably predict that he or she will be able to use lawfare to intimidate others from discussing it, can stifle freedom of speech by using the threat of defamation litigation and, in some cases, being less than forthright with the courts. We need not look back to the Saxons to find a proven example of this: see, e.g., Jeffrey Archer, Baron Archer and former Deputy Chairman of the Conservative Party, who famously won a defamation case against the Star newspaper over a visit to a prostitute whose life was ruined by the case in the late 1980s, only to be sent to prison a decade and a half later, when his testimony was discovered to have been false.
The point is not that Archer lied, or that he was punished for a lie. The point is that his initial case was so weak that he should never have won a civil action in the first place, or assumed that victory was possible, but the structure of English defamation law made a victory possible if not inevitable, thus incentivizing Archer to bring it anyway. Requiring a defendant to prove the truth of his statement, particularly where seeking to prove a negative, can be nearly impossible. It is far fairer and in the interests of justice to require a claimant, who starts the dispute, seeks the remedy, possesses direct knowledge of all of relevant facts about his past conduct, and is the party asking the state to intercede on his or her behalf with the full might of its power, to prove the truth under these circumstances.
I offer no view on the truth or falsity of Wright's statements or evidence in this case. That is a matter for the High Court to address in its fuller ruling. What I do know is that the question of the truth of his claims should have been addressed years ago in Wright v. McCormack, but it was not dealt with because the burden of proof was on the defense and the cost of going through the exercise COPA - a coalition of very well-funded corporations - just went through was likely too much for an individual defendant like Peter to bear.
In future, it is possible to make England a fairer place for speakers and help the English marketplace of ideas be a home for the truth. Ask claimants in a defamation action to bear the burden of proving their case. It’s a simple change. Parliament should make it.