Background
Howells v Newport City Council
The case of James Howells and his missing Bitcoin is one that has captured the attention of both tech enthusiasts and legal professionals alike. In 2013, Howells accidentally discarded a hard drive containing the private key to a substantial Bitcoin fortune—8,000 coins, which, as of 2025, is valued at approximately £600 million.
The hard drive was reportedly thrown out during a clear-out and was subsequently sent to Newport’s Docksway Landfill Site in South Wales. What followed was a highly unusual legal battle between Howells and Newport City Council, a case that melded issues of property law, cryptocurrency ownership, and waste management.
Key issues in the case
1. Hard drive ownership
The core question at the heart of the case was whether Mr. Howells still owned the hard drive. While Mr. Howells admitted to having discarded the device by mistake, he maintained that his act of disposal did not equate to an intention to abandon the property. According to Howells, the hard drive, along with its contents (namely, the private key to access his Bitcoin), remained his property.
Newport City Council, on the other hand, cited Section 14(6)(c) of the Control of Pollution Act 1974, which dictates that any item deposited in a landfill becomes the property of the local council. The Court sided with the council, ruling that at the time of disposal, the ownership of the hard drive transferred to them under the statutory framework provided by the Act.
2. The intangible property
A pivotal point in the case involved the ownership of the Bitcoin itself. Howells argued that his Bitcoin holdings were still his, as they could only be accessed via the private key stored on the hard drive. However, the Court clarified that while Mr. Howells indeed retained ownership of the Bitcoin (which exists as intangible property on a decentralized blockchain), the ownership of the hard drive itself was legally distinct from the ownership of the cryptocurrency.
Essentially, the Court concluded that losing the hard drive did not equate to losing ownership of the Bitcoin itself. Instead, the issue was the legal ownership of the hard drive, which the Court found to have transferred to the council once it entered the landfill.
3. Obtaining the hard drive
Perhaps the most practical issue in the case was Mr. Howells’ request to excavate the landfill to recover the hard drive. Howells proposed excavating the site at his own expense, arguing that modern technology made such a recovery possible and economically viable. Newport City Council opposed this, referring to the health, safety, and environmental risks the excavation would bring.
Given these factors, the council refused to allow the excavation, and the Court ultimately upheld this position, citing the significant health, safety, and environmental risks involved.
The legal position
The Court placed considerable emphasis on the Control of Pollution Act 1974, specifically Section 14(6)(c), which mandates that any item disposed of in a landfill becomes the property of the local authority. The Court found that the hard drive was legally transferred to the council at the time it was discarded, regardless of Howells’ intentions. This effectively dismissed any proprietary claims Mr. Howells had over the hard drive.
In a bid to recover the Bitcoin or at least its equivalent in damages, Howells also sought proprietary restitution and argued for a constructive trust. The Court rejected these claims, ruling that the statutory transfer of ownership via the Control of Pollution Act nullified any potential claims to the hard drive. Moreover, the Court found no evidence of unconscionable conduct by the council in denying the excavation request, which would have been necessary for the constructive trust to apply.
Another significant legal consideration was the timing of Howells’ claim. Mr. Howells filed his legal proceedings in 2024—more than a decade after the hard drive had been discarded. Under the Limitation Act 1980, claims of this nature are subject to a six-year limitation period. The Court ruled that the long delay further weakened Howells’ case, making the claim time-barred.
In the end, the Court granted a summary judgment in favour of Newport City Council, concluding that:
- Ownership of the hard drive: The council legally owned the hard drive under the provisions of the Control of Pollution Act 1974.
- Bitcoin ownership: While Howells retained ownership of the Bitcoin, this was separate from the ownership of the hard drive.
- Excavation denial: The council’s refusal to permit the excavation was justified based on health, safety, and environmental concerns.
- Limitation period: The case was dismissed due to Howells’ failure to file within the statutory time limits.
Comment
The Howells v Newport City Council case serves as a fascinating example of how emerging technologies, such as cryptocurrency, intersect with traditional areas of law, including property law and environmental regulations. This case highlights the complexity of managing intangible assets like Bitcoin, especially when they are tied to physical devices that are lost, damaged, or disposed of in ways that may not align with modern legal frameworks.
Ultimately, the Court’s ruling reinforces the importance of clearly defining ownership rights and responsibilities, both for physical objects and the digital assets they may contain. In the world of cryptocurrency, where ownership and access can be a grey area, this case serves as an important precedent that helps to clarify the relationship between tangible property and intangible digital assets.
How can we help?
Amrik Basra is a Trainee Solicitor in our Private Litigation team.
At Nelsons, our team specialises in these types of disputes and includes members of The Association of Contentious Trust and Probate Specialists (ACTAPS). The team is also recommended by the independently researched publication, The Legal 500, as one of the top teams of specialists in the country.
If you have concerns about the above subject, please contact Amrik or a member of our expert Dispute Resolution team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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