SLAPPs reform to remove costs risk from defending claims


Parliament: Bill currently in the House of Lords

The government looks set to remove the costs risk from defending cases found to be SLAPPs and will in time extend the curbs it announced on Tuesday beyond economic crime.

It will also make it harder for sanctioned individuals to use frozen funds to pursue defamation cases.

The need for action over SLAPPs, which stands for strategic lawsuits against public participation, has come to the fore in the wake of the Ukraine invasion and efforts by oligarchs and others to use litigation to stifle public interest journalism about their activities.

On Tuesday, the Ministry of Justice announced that it would amend the Economic Crime and Corporate Transparency Bill currently going through Parliament to introduce a statutory definition of SLAPPs in relation to economic crime.

It would also create an ‘early dismissal’ procedure for courts and curb costs.

The amendments have now been published and say that, where a claim meets the SLAPP definition, the court may strike it out where “the claimant has failed to show that it is more likely than not that the claim would succeed at trial”.

They require the government to secure an addition to the Civil Procedure Rules that, in respect of a SLAPP claim, “a court may not order a defendant to pay the claimant’s costs except where, in the court’s view, misconduct of the defendant in relation to the claim justifies such an order”.

This appears to go beyond the government’s rhetoric, which is that it will “introduce a costs protection scheme to stop costs from racking up”.

The definition includes whether “the costs incurred by the claimant are out of proportion to the remedy sought” as one indicator of a SLAPP and says a failure to “comply with or follow a rule or recommendation of a professional regulatory body” is a factor to take into account.

It also lists actual or likely failures to comply with procedure that can be factors, including “the use of dilatory strategies”, the nature or amount of material sought on disclosure, the use of correspondence, making or responding to offers to settle, or the use of alternative dispute resolution procedures.

In a policy paper on the additions, the government explained that the limitation to economic crime was because this bill presented “the earliest opportunity to pursue reforms that address a significant proportion of SLAPP activity”.

“The government is considering future legislative options to introduce comprehensive anti-SLAPP measures as soon as parliamentary time allows,” it said.

The paper also revealed a change to the Office for Financial Sanctions Implementation’s (OFSI) approach to licensing legal expenses for those whose funds are frozen due to sanctions.

This to date has reflected “the fact that the right to legal representation is a fundamental one” and so frees up money to pay for legal representation.

But, in the context of SLAPPs, “it is the government’s view that in most cases, the use of frozen funds for payment of legal professional fees for defamation cases is not an appropriate use of funds, and in many cases will be against the public interest”.

It continued: “Whilst still reviewing each individual application on a case-by-case basis, OFSI will, in future, take a presumption that legal fees relating to defamation and similar cases will be rejected.

“The Russian and Belarussian legal services general licence has also been amended so that it no longer authorises legal fees for defamation and similar cases.”




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