SLAPP down: the SRA’s evolving position

In March 2022, the Ministry of Justice issued an urgent call for evidence on strategic lawsuits against public participation (SLAPPs), lawsuits brought by those with the financial means (typically), to intimidate a party from taking certain action.

An example would be the threat of a lawsuit against a journalist about to publish an article about corruption that would benefit the public good.

The inequality of arms is a particular concern as the defendant faces the risk of excessive costs to defend the claim.

SLAPPs to silence

The concern over the use of SLAPPs intensified following the invasion of Ukraine by Russia with the emergence of claims made by wealthy people to intimidate those exposing corruption or reporting on events.

There was increasing concern that oligarchs with close links to Mr Putin were using expensive litigation in the UK to stifle criticism and deter investigations into their affairs.

There has been widespread criticism of some of the law firms who represented claimants and some individuals/firms were also named in the media and criticised in parliament for their role.

Of course, the right to pursue an action should be available but solicitors need to consider the ethical obligations in the SRA Standards and Regulations (STARs) and should never act as ‘hired guns’ for their clients.

The SRA’s concurrent response

At the same time as the call for evidence in March 2022, the SRA published a guidance note on Conduct in Disputes.

It provides broader guidance on conduct in litigation and disputes and highlights the Principles in the STARs likely to be breached when embarking on strategic lawsuits where the sole aim is to prevent action likely to be in the public good.

The example given in the guidance is “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 guidance is a useful reminder of how lawyers must balance the various duties such as those owed the client, the court and third parties. Striking the right balance is difficult and the SRA provide examples and case studies to help with the analysis.

The government’s proposal

In response to the call for evidence, the government has committed to introducing an early dismissal process which is a three-limb test for judges to apply to claims giving them the ability to throw out those that lack merit.

Under the early dismissal process judges will consider whether:

• the case relates to a public interest issue;
• there is evidence of abuse of process; and
• the case has sufficient merit, specifically whether it has a realistic prospect of success – this will be accompanied by a formal costs protection scheme which will apply to SLAPPs.

The call for evidence revealed that some respondents felt the SRA guidance lacked substance and that while the guidance on Conduct in Disputes was a good first step, more could be done. Respondents directly affected by SLAPPs expressed little confidence that regulators would take any action on SLAPPs if reported to them.

The SRA warning notice

The SRA issued a warning notice in November 2022 in response to the concerns about solicitors and law firms involved in SLAPPs on behalf of their clients. However, the reference to enforcement action within it suggests it is also in response to findings from the call for evidence.

The clear message in the warning notice is that while the government’s proposed test would tackle SLAPPs that made it to court, the SRA would investigate and if necessary, take disciplinary action against firms and/or solicitors who engage in abusive conduct. This is to plug the gap between pre-action behaviour and the matter reaching the court.

The SRA identify that SLAPP threats do not often reach the court as by their very nature they are designed to intimidate the other party.

The warning notice recognises the rights of clients to seek advice and representation to protect their privacy or their reputation and the legitimate role of lawyers in such disputes.

However, this must be approached in a way that ensures that representing a client’s interests does not override wider public interest and the solicitor’s duties to the court as embodied in principle 2 and paragraphs 1.4 and 2 of the Code of Conduct for Solicitors.

Red flags

The SRA expects firms to decline to act for clients who are seeking to follow courses of action that could be defined as SLAPPs or is otherwise abusive which means being able to correctly identify a SLAPP.

The red flags commonly associated with SLAPPs (but not conclusive) are:

• the target is a proposed publication on a subject of public importance;
• the instructions from a client are solely to act in a public relations capacity; and
• the client instructs that the claim is to be targeted only against individuals when other corporate defendants are more appropriate.

As well as the instructions itself, the SRA state that there are behaviours that are commonly associated with SLAPPs, such as claiming remedies that you know the client would not be entitled to on the facts, making unduly aggressive and intimidating threats and sending an excessive number of letters that are disproportionate to the issues in dispute.

There are six types of behaviours in the warning notice.

One of these is sending correspondence with restrictive labels that are intimidating but inaccurate. This applies to marking letters ‘strictly private and confidential’ or ‘without prejudice’ or ‘not for publication’.

If the conditions for using those terms are not fulfilled, the SRA could view this as abusive conduct. Any such labels should therefore be carefully considered.

The SRA also expects firms to report if they have reason to believe another firm or solicitor is involved in SLAPPs and refer in the warning notice to the reporting obligations contained in paragraphs 7.7, 7.8 and 7.9 of the Code of Conduct for Solicitors.

The warning notice is required reading for any litigators, compliance officers for legal practice (COLPS) and risk advisors within law firms to ensure you understand your duties and how to balance them when engaged in dispute advice and litigation.

SRA thematic review

The SRA also published the results of their thematic review which looked at four areas:

• knowledge and understanding of SLAPPs;
• how firms and solicitors manage risks in handling disputes;
• whether concerns are reported to them; and
• the continuing competence of those providing dispute resolution services.

They noted room for improvement in all areas and confirmed they would undertake a further thematic review, so it is good time to ensure your staff are provided with training.