Hatton: Britain is destination of choice for lawfare
There is a “clear consensus” in Parliament that the Solicitors Regulation Authority (SRA) must “feel empowered” to crack down on instances of ‘lawfare’, an MP said yesterday.
The comments of Lloyd Hatton were backed by Dan Neidle, the high-profile tax lawyer who has also been campaigning against SLAPPs (strategic lawsuits against public participation), and predicted that the SRA imposing “firm, credible sanctions” would change behaviour.
Mr Neidle added that the regulator needed to issue guidance on how far solicitors should go to satisfy themselves of the truth of what clients told them.
Both were speaking at the Legal Services Board’s annual Reshaping Legal Services conference in London.
Giving the keynote address, Mr Hatton, a Labour MP and member of the All Party Parliamentary Group on Anti-Corruption and Responsible Tax, condemned SLAPPs and the fact that “Britain is shamefully the destination of choice for these lawfare tactics”.
“The justification for this abuse of the legal process often goes as follows. Everyone has a right to representation. The law is a neutral profession, and the cab-rank system means that lawyers have an obligation to offer their services to whoever needs them.
“I disagree wholeheartedly. In my view, when our courts are used to settle scores and quash scrutiny, lawyers are instead acting as hired guns. They’re being used to advance certain ends, and lawyers and their regulators have an ethical responsibility to be much more discerning.”
He was highly critical of the SRA’s decision to close a complaint about the now-defunct firm Discreet Law, which represented Yevgeniy Prigozhin, an ally of Vladimir Putin and leader of the Wagner Group, in an ultimately unsuccessful libel action against a journalist.
Mr Hatton expressed amazement that the SRA had found it was not a SLAPP. “Even more astounding, despite multiple international sanctions designations, the SRA found no evidence that Discreet Law was aware that Prigozhin ran the Wagner Group…
“If this case isn’t a SLAPP, then what is exactly? It is hard to imagine a clearer case of an abuse of process. And the SRA’s inaction shows how inadequate our current regulatory framework is.”
The MP said there was “a clear consensus” in the Houses of Parliament on three points.
“Firstly, that lawyers and regulators must take their ethical responsibilities more seriously. Secondly, that we must create a much tougher regulatory environment where the SRA feel empowered to be much more bullish when cracking down on these suspected lawfare cases.
“And finally, we need anti-SLAPP legislation that goes beyond cases that only involve economic crime.”
He concluded that, “with a change in legislation, regulation and culture”, the UK can “shake off our reputation as the lawfare capital of the world”.
Mr Neidle told the conference said the Prigozhin and other cases raised the question of what a solicitor “has to do, if anything, to satisfy himself that a factual claim is true before pursuing it in correspondence”.
Everyone in life applied a different standard of evidence depending on the nature of the claim being made, he said.
“So when Prigozhin brought a defamation action on the basis that he was not the leader of the Wagner Group, but he had been sanctioned for being the leader of the Wagner Group, that should have required quite a high level of diligence by Discreet Law.
“I don’t know if that’s the SRA’s view or not. The point appears to be legally untested. I think we need it to be tested.” He suggested that the regulator issue guidance first.
Further pressure could come from making clear to law firms involved in fraudulent libel claims that the correspondence between them and their client could be made public; indeed, Mr Neidle said he was set to make Freedom of Information Act requests to the SRA to see such correspondence from the Prigozhin and other cases.
If the claim was a fraud, then the correspondence could not be privileged, he argued.
Mr Neidle said MPs also needed to become involved and make bringing fraudulent libel claims a tort or criminal offence, and could – if they wanted – change libel law. In the US for example, the claimant has to prove malice.
“The reason they use libel law is because there is no downside for them. If you are worth hundreds of millions, billions of pounds, the legal fees are inconsequential and what’s the worst that can happen? You give some small change to some lawyers.
“What’s the best that can happen? Your reputation remains unsullied. You can’t allow people one-way bets of this kind.
“In some of these cases I think the lawyers could have acted differently, should have acted differently. But in others you can’t really blame the lawyers, you have to blame the law and that is something that Parliament is responsible for.”
He added that, if there had been “extremely serious sanctions” against Discreet Law and the individuals involved, “then that would percolate across the profession”. If people saw “firm credible sanctions… then that will change behavior”.
The only change in behaviour he had seen was from SRA guidance telling solicitors to stop claiming that recipients could not publish their letters – it was this that saw the solicitor who sent such an email to Mr Neidle over the affairs of former Conservative MP Nadeem Zahawi fined £50,000.
However, he added that the “latest tactic” of some was to claim copyright in the letter as a reason it could not be published.
“My answer is, if I printed it on a T-shirt and start selling it from market stores, you can sue me. But the law of copyright doesn’t prevent me publishing something in the public interest and you have no damages even if it did. Hopefully we’ll get a test case on that soon.”
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