SLAPPs and reputational risks

Strategic legal actions against public participation (SLAPPs) have featured frequently in the news recently.

SLAPP litigations form their basis in defamation law (but can also include issues surrounding privacy, confidentiality and data protection).

Unlike genuine defamation claims – which typically arise out of an attempt to protect or repair the claimant’s damaged reputation – SLAPPs go further, aiming to prevent lawful investigations and discussions about matters of public interest.

The government defines SLAPPs actions as “an abuse of the legal process, where the primary objective is to harass, intimidate and financially and psychologically exhaust one’s opponent via improper means”.

This area of litigation has come to the forefront of the public consciousness, partly as a result of Russia’s invasion of Ukraine and the UK government’s subsequent sanctioning of some Russian billionaires and organisations.

There is no suggestion that the use of SLAPPs is particular to Russian individuals, but the following recent SLAPPs claims were indeed brought partly by people of Russian origin.

The cases of two journalists who wrote books that commented on Russian individuals and organisations, attracted high-profile defamation claims against the books’ publisher, and both journalists in an individual capacity.

Three Russian oligarchs, as well as a Russian state-owned oil company, brought actions against one of the journalists in respect of her book. The oligarchs are all currently subject to UK government sanctions, relating to their alleged links to Russian president Vladimir Putin.

The journalist settled the claims against her and was subject to legal costs of £1.5m.

The book publisher agreed to make edits to the book and a charitable donation, after agreeing that some of the information about one of the oligarchs was incorrect. The claims were never tested in court.

The second journalist was sued by a Kazakh mining group, who claimed that the book in question would lead people to believe that it had organised the murder of three people to protect its business interests.

This claim was dismissed at a preliminary hearing in March 2022, with the judge ruling that the relevant sections of the book did not refer to the corporation and that it did not allege that anyone was murdered, only that the deceased’s deaths were suspicious.

The judge commented further that “only individuals can carry out acts of murder or poisoning, only individuals can be motivated to do so to protect their business interests.”

Why is the government interested in SLAPPS?

In March, deputy prime minister Dominic Raab launched a call for evidence in the first step towards taking government action to deal with the chilling effect of SLAPPs cases on public interest journalism, particularly in light of Russia’s invasion of Ukraine.

The consultation closed in May and the results will be published at a future date.

The government wants to stop organisations and/or individuals with deep pockets from silencing legitimate public interest investigations and reporting.

While there were just 14 SLAPPs cases in the UK during 2021, the government believes that these cases are the tip of the iceberg and have a disproportionately chilling effect on individuals and organisations.

The introduction to the call for evidence states: “The thinktank Foreign Policy Centre found in its 2020 survey of 63 investigative journalists working globally on corruption that civil legal cases, including cease and desist letters, surveillance, interrogation by authorities and smear campaigns, were experienced by more than 50% of respondents.

"73% of those receiving threats had been threatened with legal action. 61% of respondents also reported that their investigations had uncovered a link (directly or indirectly) with UK financial and legal jurisdictions.”

How has the legal profession responded?

In March 2022, the Law Society responded on the profession’s behalf, with immediate past president I. Stephanie Boyce providing comment stressing the need for a strengthening and clarification of the rules relating to SLAPPs, and for ensuring that any proposed changes to the law go no further than necessary.

The Law Society has confirmed that it supports:

• judiciary-led gate keeping with regards to litigation with SLAPPs-like tendencies
• robust changes to the civil procedure rules
• more rigorous case and costs management by the courts, and
• limiting costs by considering a range of options

Boyce commented; “The focus of anti-SLAPPs efforts should be on the current rules and improving existing court processes and procedures, including exploring methods which would ensure parties are operating on a more level playing field when it comes to costs.”

Boyce also highlighted the fundamental issue typically at play in SLAPP matters, the excessive cost risk faced by defendants, stating: “The inequality of arms that often exists between claimant and defendant – where one party has more financial resource than the other – really needs to be addressed. Lower costs would benefit both parties.”

Jonathan Goldsmith, chair of the Law Society’s Policy and Regulatory Affairs Committee, added: “The Law Society brought together solicitor experts in reputation management to consider the government’s recent call for evidence.

The experts came from both the claimant and defendant side (often they acted for both in different cases). They also came from relevant Law Society committees.

After listening to them, the Law Society decided that the best way forward was for changes to current civil procedure, to strengthen protections for potential SLAPP victims within procedures that often already exist.”

What about UK lawyers pursuing SLAPPs?

Some English law firms, and lawyers, have been criticised widely in the press and parliament for their role in representing claimants in SLAPP matters.

During a debate in January, legal work carried out in this arena was described as “lawfare” by Conservative MP David Davis. Law firms Mishcon de Reya, Schillings, Harbottle & Lewis, CMS and Carter-Ruck were criticised by Labour MP Liam Byrne and Conservative MP Bob Seely for pursuing cases that were deemed SLAPPs.

In its statement, the Law Society suggested that the professional standards requirements of solicitors go far enough, citing the Solicitors Regulation Authority’s (SRA) power to investigate and sanction bad practice.

There was no suggestion that the rules needed to be changed or that any wrongdoing took place.

For lawyers who have previously represented individuals who are now subject to sanctions, the situation is complicated, with solicitors now requiring a licence from the Office of Financial Sanctions Implementation.

The SRA has provided guidance on working for Russian sanctioned parties, as well as a reminder on litigation conduct.

What does the interest in SLAPPs mean for lawyers who work with ‘unpopular’ or controversial clients?

It remains the case that some clients are unpopular, and there will always be law firms and lawyers willing to hold their noses and act for them.

That’s not a problem. Assuming the firm stays within the confines of the relevant compliance structures, and the law, firms can essentially work with whomever they like.

That said, we live in a democracy, and we are lucky to have a healthy investigative media.

Even if you, as a practice, are operating entirely lawfully and going about your advisory business quite innocently, if your client is or has behaved in a way which is unpopular, unethical or seen as inequitable – or even if it has a reputation for any of these things – there is the potential for your firm to become tainted by association.

The media, quite rightly, has somewhat of a duty to investigate and report corruption, shady practice, environmental abuses, human rights abuses, broader criminality and more.

Reporting around the Panama and Paradise papers leaks showed us that, even where individuals and organisations took entirely legitimate actions, or where lawyers acted upon appropriate instructions, some were singled out for criticism.

How can law firms protect their reputation when it comes to unpopular clients?

One of the first considerations for a law firm deciding whether to take instructions from a potentially problematic client should, of course, be the SRA principles and codes of conduct for solicitors and law firms, along with any additional legal requirements should they exist.

If the firm has a risk management committee, it is sensible to include members early in these conversations. The committee is likely to have a framework in place for auditing which clients are acceptable from a risk and compliance perspective.

If the firm doesn’t have a risk management committee, it makes sense nonetheless to discuss the potential client and nature of instructions with the senior management team to reach a consensus.

For individual solicitors, taking this step as a protective measure, creating collective responsibility and an audit trail in case of future challenges, is a pragmatic one.

Another consideration for the reputationally wise law firm should be the firm’s values and its culture.

Not every firm will have been through the process of formally identifying its values, but nonetheless its culture will be known and understood by everyone who works there.

For example, firm A has an open culture where staff feel well supported, able to bring any challenges to the table, and there is a sense of mutual respect running through everything the firm does. The firm specialises in community-minded and/or ethically driven work.

Firm B places emphasis on long working hours and high billable targets, but also has a collegiate atmosphere where hard work is valued and celebrated.

There’s nothing wrong with either model; they are simply different and attract a particular type of client.

Problems can arise when firm A takes on a client that would sit more comfortably with firm B. In this case, there’s a fair chance that some staff members at firm A won’t like the decision to work with this client.

They may leave or feel that the firm has ‘changed’, potentially leading to disharmony.

Unhappy staff may be more likely to speak to the media when asked, should the client get itself into reputational problems.

The firm may find itself caught up in and negatively affected by the client’s reputational challenges, and be forced to take immediate reactive steps to minimise any damage in the media; spending time and resources into the future repairing its reputation.

If clients see ‘their’ law firm taking heat as a result of reputationally challenging clients, or indeed start to believe the firm no longer reflects their own values, there’s every chance that they will take their legal spend elsewhere.

There is a flip side to all of this of course. Some individual lawyers and indeed firms actively maintain and seek to grow a reputation with clients that others would never take instructions from.

For those law firms, it can be a proactive business decision and enables them to create a powerful niche.

The lawyers that work at these firms will need to be hard-nosed and tough-skinned if they wish to pursue this course of action.

Being associated with unpopular clients and being hard-nosed about it will in time bring the firm to the attention of other unpopular clients and therefore may well bring dividends.

Remember though – while the return may be high, so are the risks.