International fraud and the evolving challenges of service

England remains an attractive jurisdiction for international parties seeking to bring international fraud claims, even where it might be said that a dispute is more obviously connected to another jurisdiction. There are many reasons for this, in particular (i) the well-established principles of English law, (ii) the English court’s extensive experience in dealing with commercial disputes across multiple sectors and industries and its reputation for fairness, predictability and sophistication, and (iii) the availability of wide-ranging interim relief such as freezing and search orders which evolve in response to the needs of litigants. 

Under CPR Part 6, the fundamental principle governing service is to bring a claim form to the attention of the defendant. This is a deceptively simple principle that underpins the procedural framework which governs how claims are commenced in the English courts. However, fraud claims, by their very nature, tend to involve (overseas) defendants who are more likely than plain vanilla defendants to actively seek to delay and frustrate attempts to serve. This can create an added pressure for claimants, not least when faced with time limits for serving their claim.

Service out of the jurisdiction is dealt with by CPR Part 6 Section IV and, in most cases, international conventions prescribe the starting point for service. That said, the reality on the ground is not always straightforward. Multilateral and bilateral treaties, local procedural rules, and differing cultural or administrative practices can raise questions as to what is practically achievable abroad and when. Delays, refusals, and technical challenges are common, and in fraud cases, these difficulties are often exacerbated by recalcitrant defendants actively taking steps to avoid being served. Where the authorities are used to effect service, then this can also mean additional time and cost – not to mention the added cost that might be required for translations. 

As such, before serving proceedings, careful planning and coordination is required, both to seek to identify the most practical, cost-effective means of effective service and so as to avoid procedural missteps that could delay – or even derail - proceedings.

One potential to avoid the need to serve abroad is an under-utilised statutory regime which enables overseas defendants to be served at English addresses notwithstanding that they may be out of the jurisdiction at the time at which service is effected (in one case, a defendant had lived overseas for over 50 years!).

Where service abroad is required and proving difficult, the English courts have flexible alternatives available, including dispensing with service, rectifying service issues and/or permitting service by an alternative method or at an alternative place – for example, where traditional methods are proving either impractical or impossible to perform (for example, during the pandemic when overseas authorities responsible for service were closed). In recent years, alternative methods of service have included the use of datarooms, direct messaging apps, social media platforms and blockchain. This evolution reflects a growing judicial recognition that modern communication methods such as email may, in many cases, be far more effective than traditional post.

Ideally, claimants will seek the court’s permission before taking any such alternative steps, but in reality – especially when up against potential time limits – retrospective permission can be sought. 

Alternative service methods also highlight a broader challenge in international fraud disputes: identification of the defendant.  In many cases, fraudsters conceal their identity from wronged claimants to seek to avoid being held accountable for their actions. In this regard, the English courts have developed the ‘Persons Unknown’ jurisdiction with a view to aiding efforts to serve such parties.

In our experience, arguments over service are an increasingly common feature of English proceedings. For practitioners and their clients, advanced strategic and creative thinking around service is therefore essential. As fraudsters continue to exploit borders and technology, the legal system will need to continue adapting at the same pace to continue to allow victim claimants a fair opportunity to pursue their claims.

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