Victims of Fraud Series Part 3: “What can I do if the fraudster has disappeared?” - Persons Unknown Injunctions

Where the identity of a person or group of people responsible for a fraud is not known, the courts have recognised that it may be appropriate in certain circumstances to allow a claimant to issue proceedings and obtain an injunction (both interim and final) against such individuals. These injunctions are referred to as “persons unknown injunctions” and they have become increasingly prominent in recent years.
 

In the context of fraud, persons unknown injunctions have proven useful where the alleged fraudster has used sophisticated methods to conceal their identity, often through fake online profiles, anonymous email accounts or cryptocurrency transactions. In such cases, usual legal remedies may be ineffective, especially if the fraudster is unable to be traced.

A persons unknown injunction allows the claimant to take proactive steps to freeze assets and potentially compel third parties (such as banks or social media platforms) to assist in identifying the wrongdoer.

As such, these injunctions are also often accompanied by or preceded by ancillary orders including Norwich Pharmacal orders (used to compel third parties to disclose information) or Bankers Trust Orders (used to trace assets and obtain disclosure from financial institutions).

The evolution of Persons Unknown Injunctions
 

The law underpinning these injunctions has evolved over the past 20 years, with the courts gradually refining the circumstances in which such relief can be granted.

The landmark case in 2003 of Bloomsbury Publishing Group Ltd v News Group Newspapers Ltd was one of the first to confirm that proceedings could be issued against unnamed defendants, provided they were sufficiently identifiable by their conduct.

This principle was later affirmed in 2017 in the case of Ineos Upstream Ltd v Persons Unknown which clarified the following six legal requirements for the courts to grant such injunctions:

Legal requirements

1. There must be a sufficiently real and imminent risk of harm being committed to justify injunctive relief.
2. It would be impossible to name the persons who are likely to commit the harm unless restrained.
3. It is possible to give effective notice of the injunction and for the method of such notice to be set out in an order.
4. The terms of the injunction must correspond to the threatened harm and not be so wide that they prohibit lawful conduct.
5. The terms of the injunction must be sufficiently clear and precise as to enable those potentially affected by the injunction to know what they must not do.
6. The injunction should have clear geographical and temporal limits.

 

Procedural requirements

The Court of Appeal revisited the above six requirements in the case of and Canada Goose UK Retail Ltd v Persons Unknown and set out an accompanying list of procedural guidelines for such injunctions, including:

1. The persons unknown defendants must be unidentified at the time proceedings are issued.
2. The persons unknown must be described in the claim form by the unlawful conduct they are alleged to be committing.
3. The terms of the injunction must be written clearly so people potentially affected understand what they’re not allowed to do (legal jargon should be avoided).
4. The injunction must specify where and for how long it applies.

 

“Newcomer injunctions”
 

Historically, there were only two categories of “persons unknown”, being:

• Category 1) Anonymous defendants who are identifiable but whose names are unknown; and,
• Category 2) Defendants who are not only anonymous but cannot even be identified.

However in the case of Wolverhampton City Council and others v London Gypsies and Travellers & Others, the Supreme Court established that the courts have the power to grant injunctions against a third category of persons unknown, called “newcomers”.

“Newcomers” were described by the court as being persons who have not engaged in the prohibited behaviour at the time of the injunction, but who might do so in the future (for instance, an individual who joins a fraudulent scheme at a later date).

Practical Challenges
 

Despite their value, there are several practical and procedural challenges with pursuing persons unknown injunctions, for example:

Procedural complexity

The court expects applicants to comply with strict procedural safeguards. Applications for such injunctions must be accompanied by a clearly drafted order and give full and frank disclosure (including potential objections the “person unknown” might raise).

 

Service

The court will require the applicant to have a plan to ensure that the injunction can be properly served.  Where the identity and location of the respondent is not known, the usual methods of service might not be available. As such, a respondent will need to have given some thought to how it will satisfy the court that the injunction has been brought to the attention of the persons unknown, so an order permitting alternative service can be applied for.  Some creativity might be required.

As the service is not just of the injunction but all of the supporting papers, which can be voluminous, a link to those documents in some kind of online document sharing repository will be required.  This could be served by email if one is available, on a social media account if the fraud was perpetrated through social media, and in the case of crypto, this can be airdropped in an NFT to a wallet identified as being controlled by the persons unknown.

 

Enforcement

In circumstances where the respondent cannot be located or refuses to comply, the injunction may have limited practical effect. If the injunction is breached, contempt of court proceedings might be required.  Other remedies for non-compliance might be available however, providing an easier route to judgment.

 

Rights of third parties

The applicant must be careful not to infringe on the rights of innocent third parties, especially when seeking broad orders which could impact individuals not involved in the wrongdoing.

 

Cost

Applications for persons unknown injunctions can be complex and expensive, particularly where multiple jurisdictions are involved or where digital forensics are required to trace the fraudster’s activities. As such, claimants and their advisors should weigh up the potential benefits against the financial and procedural burdens before pursuing this route.

 

Conclusion
 

Persons unknown injunctions offer a powerful remedy in cases where the identity of the wrongdoer is concealed or unknown. In the context of fraud, they enable claimants to take swift action to freeze assets and begin the process of uncovering the perpetrator’s identity. However, they must be used carefully and strategically, with due regard to legal principles, procedural requirements and practical challenges.

For individuals or organisations facing fraud where the perpetrator has disappeared, seeking legal advice at an early stage is crucial. A well-prepared application, supported by evidence and tailored to the specific circumstances, can put you in the best position to secure effective relief and ultimately recover your losses.

About the author

Elliot is a Senior Associate in the Dispute Resolution Team at Kingsley Napley. Elliot’s practice covers a wide-range of areas but he has a particular interest in civil fraud and professional negligence related disputes. Elliot also acts in high-value international arbitrations.