Injunctions against "Persons Unknown": The High Court flags uncertain territory

An increasingly important tool available to victims of fraud is the civil court procedure under which an action can be commenced and injunctions obtained against defendants who are identified only as “Persons Unknown”, described only by reference to their conduct in connection with the wrongdoing.

Previously used only in niche areas, such orders have recently come into their own in areas where there is particular scope for fraudsters to remain anonymous - such as cyberfraud and fraud involving crypto and other digital assets.  They can allow claimants to enlist the assistance of the court in identifying the wrongdoers and, even before that, tracing and freezing misappropriated assets.

However, the procedure does throw up a number of novel issues and challenges, which are starting to crystallise as the use of such orders expands into new areas and more complex cases.

A recent High Court decision has highlighted a number of such issues arising from the fact that these orders have the potential to catch ‘newcomers’ – people who did not fall within the defined category of “Persons Unknown” at the time the injunction was made but are subsequently brought within the definition (MBR Acres Ltd and others v McGivern [2022] EWHC 2072)).

The judgment suggests some uncertainty as to whether such newcomers can be bound by an injunction if they did not have actual subjective knowledge of it (with obvious ramifications for claimants serving such orders).  It also queries how the courts should deal with the fact that newcomers automatically become parties to the substantive proceedings.

Jan O'Neill, Professional Support Lawyer in our London office, considers these issues in a recent post published on the Practical Law Dispute Resolution Blog.  Click here to read the post.