BSV Claims Limited v Bittylicious Limited & Ors

For a freely tradeable asset whose value is reduced by wrongful conduct, the claimant must ordinarily mitigate by using an available market to sell and, where appropriate, acquire a substitutable asset once the conduct is known or ought to be known. Retaining the damaged asset is at the claimant’s own risk. Damages cannot be based on later hoped-for appreciation or the future value of another asset. A loss-of-chance analysis cannot circumvent this rule where the loss could have been crystallised through reasonable mitigation. The issue may be resolved summarily where the evidence establishes free tradability and available substitutes. A tribunal should also record its decision in an order, particularly where an appeal is foreseeable.

BSV Claims Limited brought opt-out collective proceedings under the Competition Act 1998 concerning the alleged collusive delisting of Bitcoin Satoshi Vision from cryptocurrency exchanges. Binance applied to strike out claims by sub-class B holders, who retained their holdings after the delisting events and claimed a substantial foregone growth effect, together with a loss-of-chance claim.

The Competition Appeal Tribunal refused most of the strike-out application but indicated that the foregone growth claim was irrecoverable, save where holders reasonably remained unaware of the delistings, and struck out the loss-of-chance claim. No order was made. The appeal challenged the correctness and effect of that reasoning. The central issues were whether market mitigation applied and whether the claim could properly be advanced as a loss of chance.

The appeal was dismissed. Sir Geoffrey Vos MR gave the judgment, with Males LJ and Snowden LJ agreeing.

1. The market mitigation rule, described in Aylwen v Taylor Joynson Garrett and The Golden Victory, applies to freely tradeable assets where an available market offers reasonably similar substitutes. Cryptocurrencies are tradeable assets, equivalent in this context to shares, derivatives and other tradeable financial instruments. They are not to be treated like real property. The representative’s reliance on Bitcoin and Bitcoin Cash as comparators itself demonstrated that BSV was not a unique asset without substitutes.
2. Once holders knew or ought to have known of the allegedly wrongful delisting, they could sell their BSV and crystallise the loss. If they retained it, they did so at their own risk. Their investment decisions thereafter were not attributable to the defendants. The maximum recoverable loss was measured by the value obtainable shortly after awareness, plus quantifiable consequential losses such as trading fees. Even where awareness was reasonably delayed, the claim could not exceed the total pre-delisting value of the holding plus such consequential losses.
3. The market mitigation rule presupposed actual or constructive awareness of the relevant conduct. The evidence established an available market for substitutable cryptocurrency investments, so no trial was needed on that issue for aware holders. The exception identified in Stanford International Bank v HSBC Bank did not assist the claim.
4. A loss-of-chance analysis could not circumvent the ordinary mitigation principles. The possibility that third-party market actions might have increased BSV’s future value was irrelevant. Retaining damaged BSV in the hope that it might become a top-tier cryptocurrency was not reasonable mitigation.
5. The Court observed that the Tribunal should have encapsulated its decision in an order, at least where an appeal was in prospect. The parties were left to agree an order reflecting the judgment.

1. Court of Appeal (Civil Division) dismissed the appeal and held that the relevant sub-class B claims were liable to be struck out to the extent identified in the judgment.
2. Competition Appeal Tribunal, in [2024] CAT 48, refused most of Binance’s strike-out application, struck out the loss-of-chance claim and indicated that the foregone growth claim was irrecoverable except where holders reasonably remained unaware of the delisting events.