SRA slaps warning on firms engaging in abusive lawsuits
By Jack Rogers
Jack Rogers examines the SRA’s intervention over the controversial SLAPPs practice
On 28 November 2022, the Solicitors Regulation Authority (SRA) issued a warning notice setting out the regulator’s concerns in relation to the use of lawsuits aimed at preventing legitimate public interest material from entering the public domain, known as SLAPPs.
What is a SLAPP?
SLAPP stands for Strategic Lawsuit against Public Participation. There is no current legal definition for what amounts a SLAPP. The key feature of a SLAPP is to prevent public interest information from being published by targeting acts of ‘public participation’, which will include activities such as journalism and whistle-blowing.
Typically, SLAPPs will seek to stop the release of information relating to importance social matters such as corruption, finance and parliamentary affairs from entering the public domain. The use of a threatened meritless or excessive legal claim, backed by a well-financed individual or corporation, is the primary method from dissuading the respective individual from continuing with their potential disclosure or reporting.
SLAPP can ultimately be characterised as an abuse of a powerful position to silence opposition. At their most serious, SLAPPS represent an attack on free speech and the rule of law.
How did we get here?
The government and the SRA have taken a keen interest in addressing the issue that SLAPPs pose over the past year. This has reflected the wider public awareness of the practice.
Despite the fact the majority of SLAPPs will go unreported, owing to the fact an individual has bowed to the pressure of the litigation threats made against them, there have been a few high-profile cases in the media over the past year exhibiting behaviour akin to SLAPPs.
In March 2022, a multinational mining corporation, Eurasian Natural Resources Corporation (ENRC), had its libel case against author Tim Burgess dismissed by the High Court following the publication of his book on dirty money ‘Kleptopia’ in which ENRC featured heavily. The government’s own Nadhim Zahawi was accused of SLAPP-like behaviour when his solicitors marked correspondence to Dan Neidle, the head of the Tax Policy Associates (TPA) ‘confidential and without prejudice’ after the TPA had sought to question the accuracy of Mr Zahawi’s tax reporting.
Mr Neidle, following the publication of the legal correspondence on Twitter, submitted a formal complaint to the SRA and called for the SRA to update its guidance.
The wider awareness of SLAPPS has also been influenced by Russia’s invasion of Ukraine, following which the SRA in March 2022, first made reference to SLAPPs in its guidance on the impact of the sanctions on Russian nationals. There has been concern that individuals with close ties to Vladimir Putin are engaging in the practice to silence critics.
Indeed, addressing the proposed Ministry of Justice (MoJ) reforms on the topic, then Justice Secretary and Lord Chancellor Dominic Raab stated: “We won’t let those bankrolling Putin exploit the UK’s legal jurisdiction to muzzle their critics…I’m announcing reforms to uphold freedom of speech, end the abuse of our justice system, and defend those who bravely shine a light on corruption.”
On 4 March 2022 the SRA updated its conduct on disputes guidance and identified SLAPPs as ‘cases in which the underlying intention is to stifle the reporting or the investigation of serious concerns of corruption or money laundering by using improper and abusive litigation tactics.’
The MoJ issued a Call for Evidence on 17 March 2022, seeking feedback from relevant stakeholders, including journalists, editors and solicitors about their experiences with SLAPPs. The Call for Evidence suggested legislative reform, in combination with procedural and regulatory reform may be needed to tackle the issues of SLAPPs. It also posed the question as to whether a legal definition for SLAPPs was required.
A package of proposed measures form the MOJ followed on July 20 2022. The proposed reforms introduced a new three-part test that courts will apply in order to determine whether a case should be thrown out immediately on the basis that it represents a SLAPP:
· That the case relates to a public interest issue.
· That it has some features of an abuse of process.
· That it has insufficient evidence of merit to warrant further judicial consideration.
A new costs protection scheme was also introduced in order to seek to limit the abuse of the dominant financial position of deep-pocketed claimants.
The warning notice
The publication of the warning notice comes shortly after the Chief Executive of the SRA wrote an article in The Times highlighting the issues with SLAPPS, arguing that SLAPPs: “pose a clear and present danger to the rule of law, free speech and a free press and represent a misuse of litigation by the rich and powerful intent on preventing legitimate scrutiny from journalists, academics and campaigners.”
The warning notice is aimed at all firms and regulated individuals who conduct litigation and who give dispute resolution and pre-action advice. The warning notice has sought to remind solicitors that representing the interest of client’s does not override wider public interest obligations and duties to the courts.
In contrast to the structural reforms proposed by the MoJ, the SRA’s approach is more focused on individual behaviour. Regardless of whether a case in question satisfies all limbs of the government’s proposed three-part test to the extent that the behaviour is representative of a SLAPP, the SRA retains the power to take action against behaviour which it considers abusive.
The SRA has put an obligation on solicitors to identify proposed courses of action (including in pre-action) that could be representative of a SLAPP and decline to act in such a manner. Such offending behaviour may include: threatening or advance meritless claims; making unduly aggressive and intimidating threats and pursuing unnecessary and onerous procedural applications.
One of the key themes highlighted in the Warning Notice was that of inappropriately labelling correspondence in a way that is intimidating but inaccurate. Examples of such mis-conduct include: marking correspondence 'not for publication', 'strictly private and confidential' and/or 'without prejudice', when it is not appropriate to do so. These labels are designed to intimate the opponent who may not be aware of their true meaning and will likely not have the financial resources to afford the risk of breaching such a warning.
A solicitor’s obligation of vigilance in scrutinising such conduct is not merely self-reflective, but extends to others in disputes that an individual is involved in. This warning notice should therefore require teams who engage in this conduct to undergo wholesale cultural reform in respect of their litigation conduct in order to avoid falling foul of the regulatory guidance.
Indeed, the behaviour outlined by the SRA can be evidence of misconduct capable of amounting to a serious breach of the SRA’s regulatory rules, and will likely lead to disciplinary action. The awareness of the behaviour outlined in the guidance can also inform a solicitor’s duty to report. The SRA are already investigating 29 cases where firms might be involved in SLAPPs.
It remains to be seen how effective this most recent intervention by the SRA will be. Nonetheless, it is welcome to have the professional regulator take such an active role in attempting to eliminate a practice which poses a serious threat to the rule of law by seeking to stifle publication of information in the public interest.
It is hoped the vigour with which this topic has been pursued by the government and the SRA remains steadfast despite the topic invariably slipping out of the public consciousness to a certain degree.
Jack Rogers is an associate at Russell-Cooke russell-cooke.co.uk