Court Of Appeal Doubts Whether Costs Can Be Paid In Bitcoin | Unargued Crypto Costs Orders Risk Over-Compensating The Payee

In Gary Jones v Persons Unknown [2026] EWCA Civ 1212, the Court of Appeal expressed real doubt about an order requiring summarily assessed costs to be discharged in Bitcoin, and declined to endorse it. The observations are obiter, but anyone seeking or resisting costs in Bitcoin in crypto asset litigation should expect the court to start from the currency in which the receiving party pays its solicitors.

Background

Mr Gary Jones brought proceedings to recover Bitcoin of which he had been defrauded, suing three classes of persons unknown and Huobi Global Ltd, the exchange controlling the tHEL wallet. Mr Nigel Cooper KC, sitting as a Deputy High Court Judge, granted summary judgment and ordered delivery up of 89.6 Bitcoin from that wallet [2], [14], [19].

Paragraph 8 of the Order required the first and second defendants to pay Mr Jones’s costs, summarily assessed at £148,000. Paragraph 9 provided for payment of those costs by the first, second and fourth defendants transferring 8.63532665 Bitcoin from the tHEL wallet to Mr Jones’s nominated wallet by 20 September 2022 [21].

Huobi complied and appears to have debited the Bitcoin from the account of Kyrrex Ltd, a non-party [23]. On Kyrrex’s application under CPR r 40.9, the Court of Appeal held that Kyrrex was directly affected and set aside the relevant paragraphs of the Order [90], [134].

Costs Issues Before the Court

The court heard no argument on the costs provisions [142], [143]. Nugee LJ nevertheless added a footnote on two features of the Order that he had flagged earlier in his judgment [21], [140]. The first was that paragraph 9 required Huobi, against whom no costs order had been made, to discharge the costs from a particular source [141]. The second was whether a court should require a costs liability to be discharged in Bitcoin at all [143].

The Court’s Decision

Nugee LJ described paragraph 9 as a most unusual provision. An order for costs is a money judgment, and in general a court does not tell a defendant ordered to pay money where the money is to come from [142]. He accepted that it was an ingenious attempt to overcome the problem that the first and second defendants were unlikely to be identified, so that ordinary enforcement would probably be impossible [142].

That device carried a risk which materialised: the Bitcoin in the wallet turned out not to belong to the first and second defendants, so the costs were borne by someone innocent of the fraud. It also imposed on Huobi a positive obligation that could in theory be enforceable by committal, although money judgments in general cannot be, and although no costs order had been made against Huobi [142].

On the currency point, Nugee LJ started from the general rule that costs are awarded in the currency in which a party has paid, or is liable to pay, its solicitors, citing Federal Republic of Nigeria v Process & Industrial Developments Ltd [143]. Here that was presumably sterling, as paragraph 8 appeared to confirm. He said: “I am not aware of any precedent for the Court awarding costs in Bitcoin.” Although paragraph 8 awarded costs in sterling, the practical effect of paragraph 9 was to entitle Mr Jones to payment in Bitcoin [143].

Nugee LJ considered it “very doubtful whether this was appropriate”, noting that the deputy judge appears to have made the provision without being referred to any of the relevant material [144]. Miliangos v George Frank (Textiles) Ltd permitted orders for payment in currencies other than sterling, but in his view clearly contemplates that non-sterling orders will be in a foreign currency, implicitly a fiat currency [144].

English law treats cryptocurrency as a form of property. Treating it as money would, Nugee LJ said, be a very significant step, and the court does not order costs orders to be discharged through the transfer of property [144].

He then referred to the Law Commission’s Final Report on Digital Assets. The Commission considered cryptocurrencies unlikely to be treated as cash, and said that an action to enforce an obligation to pay crypto-tokens would be characterised as a claim for unliquidated damages for failure to deliver a commodity, rather than as a monetary debt [145]. It knew of no precedent for monetary remedies denominated in crypto-tokens [146].

The Commission recognised that crypto-tokens are unlikely at present to be regarded as money. It suggested that a court could potentially exercise a discretion to award a monetary remedy in certain crypto-tokens where that would better reflect the innocent party’s loss, but acknowledged that this would on its face be a novel step, best left to the courts when appropriate facts arise [147].

Against that background, Nugee LJ was “very doubtful if a Court should order payment of costs in Bitcoin or other cryptocurrency without the point having been fully argued” [148]. The particular difficulty was over-compensation. The £148,000 had been converted at one Bitcoin to £17,194.11, presumably the prevailing rate on or shortly before the date of the Order, 6 September 2022 [148].

The Order allowed 14 days for the transfer, and Huobi did not make it until 27 September 2022. By then Bitcoin might have risen significantly, so that Mr Jones would net more than the £148,000 assessed. As Nugee LJ put it: “None of this seems very satisfactory.” [148]

On both grounds Nugee LJ considered it open to real doubt whether paragraph 9 should have been made. He declined to resolve the question without argument, but made clear that he did not endorse the form of order [149]. The observations on costs in Bitcoin are therefore obiter. Foxton LJ and Peter Jackson LJ agreed with his judgment [150], [151].

Practical Implications

Receiving parties in crypto asset litigation should seek costs in the currency in which the client has paid, or is liable to pay, its solicitors, which will usually be sterling [143]. An order for costs in Bitcoin, or a mechanism converting a sterling sum into tokens, should not be put before the court without the point being fully argued and the relevant material placed before the judge [144], [148].

Where the paying party is unidentified, practitioners should be wary of drafting orders that direct a third party, such as an exchange, to satisfy costs from a named wallet. The Court of Appeal regarded that as most unusual: it fixes the source of payment for a money judgment and risks the costs falling on an innocent account holder [142].

Paying parties and affected non-parties facing such an order now have a structured line of argument: the currency rule, the treatment of cryptocurrency as property rather than money, and the risk of over-compensation where the token appreciates between assessment and payment [143], [144], [148].

Where any conversion is unavoidable, the order should address the conversion and transfer dates, since a gap between them can leave the receiving party with more than the sum assessed [148]. The observations are obiter and the question was left unresolved, so the point remains open to argument in a suitable case [149].

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