Slips and SLAPPs – SRA review finds good level of compliance

Philip: Some firms need to do more

There is an increasing trend of firms threatening to report their opponents to the Solicitors Regulation Authority (SRA) as a litigation tactic, solicitors have told the regulator.

The finding came in a thematic review of conduct in disputes published by the SRA today as part of its work on strategic lawsuits against public participation (SLAPPs).

The review of the work of 25 firms dealing with reputation management matters found overall a good level of compliance, although it highlighted the need for firms to create policies on litigation conduct and also improve training for fee-earners.

It forms part of the SRA’s work on SLAPPs; it is under significant political pressure to curb the activities of firms seen as bringing cases for the rich and powerful to curb public criticism.

The regulator visited 25 law firms active in reputation management work, speaking to both the head of department and a more junior fee-earner, as well as reviewing two completed files at each.

Several firms “stressed the importance of not assuming that something was a SLAPP”, the SRA recorded.

“One firm said that a wealthy foreign individual bringing a claim against a foreign newspaper in England and Wales could be seen as a SLAPP. However, the firm felt that its client had a legitimate claim.

“Simply because they were wealthy and lived outside the jurisdiction did not automatically mean the claim would be unmeritorious and amount to a SLAPP.”

The SRA said it was only once solicitors properly understood their client’s case and the reasons for wanting to take legal action that they could take a view “on how to appropriately balance the client’s rights and interests with the public interest”.

The review found that many of the solicitors showed a good understanding of the risks in this area; there was no evidence of the firms reviewed abusing the litigation process.

Indeed, 11 heads of department and six fee-earners said their firms have had to tell claimants they could not pursue litigation because it was abusive or unfair.

There was a good general understanding of SLAPPs, but some fee-earners wrongly thought one could only be bought against an individual.

Some were also not aware of the SRA’s latest guidance on conduct in disputes, and the SRA urged firms to adopt policies and procedures for this work – only one firm had done – and specific training for fee-earners on how to conduct fair and appropriate litigation.

“Although firms are not obliged to have policies and procedures in place, they are an important tool to make sure the firm has a clear record of key issues and concerns and all staff understand their obligations and the specific risks that can arise in this area,” it said.

Thirteen firms said how they dealt with reputation management matters differed from other litigation they handled.

The file reviews did not show the terms ‘strictly private and confidential’, ‘not for publication’ and ‘without prejudice’ being used inappropriately – although the SRA cautioned fee-earners to tell clients that using the first two labels did not guarantee that the letters’ content would not be published.

“Anecdotally, we heard fee-earners had clients ask them to make threats against their opponents. For example, threatening the other party by exposing their non-payment of taxes, unless they agreed to withdraw or settle the claim.

“In essence, the client was asking the solicitor to be complicit in blackmail. This would be serious professional misconduct and, as we would, expect the fee-earners reassured us that they had refused to do this.”

Some firms said they had adopted a ‘house style’ with the aim of developing a less antagonistic culture within the team when communicating with an opponent, which the SRA found borne out by the file reviews.

The review also found too many solicitors had a poor understanding of their professional obligations to report potential misconduct by others – it uncovered three possible instances of potential abusive litigation by other firms which were not reported but will now be investigated.

“Several heads of department told us of an increasing trend of firms threatening to make a report to the SRA for alleged breaches of our codes of conduct where there was no basis to do so,” it went on.

“Where the threat to make a report to us was intended to inappropriately influence the course of a matter, we regard this as an abusive litigation tactic and will take such circumstances seriously.”

The review found widespread ignorance and misunderstanding of the SRA’s guidance on reporting and notification obligations, which was further evidence of the need for more training.

The SRA said it would now promote the findings, raise awareness of the standards it expected of solicitors with those working outside the profession, such as journalists, and undertake a further thematic review on SLAPPs.

This will specifically check compliance with the SRA’s warning notice on SLAPPs – issued after the visits to firms took place – assess competence and training, “examine the steps taken by firms to prevent the possible illegitimate funding of SLAPP cases”, and examine the relationships between law firms, ‘reputation managers’, PR companies and private investigators.

SRA chief executive Paul Philip said: “SLAPPs are a threat to free speech and the rule of the law. Solicitors should act fearlessly in their client’s interest when bringing legitimate claims.

“They are, however, officers of the court. They must act with integrity and should never abuse the litigation process. This damages our society and public trust in the profession.

“Most solicitors take their duties seriously. Yet this review shows that some firms need to do more. Firms need to be sharply focused on meeting the high standards we all expect.”

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