Slapp down
The government has today (13 June 2023) announced that it will introduce an amendment to the Economic Crime and Corporate Transparency Bill, currently at Committee Stage in the House of Lords, to slap down certain SLAPPs (Strategic Lawsuits Against Public Participation).
The announcement is entitled "Crack down on criminals silencing critics to be added to Economic Crime Bill" and the amendment is more nuanced than had perhaps been hoped for by campaigners.
It appears that the amendment would apply not only to defamation claims but also to data protection, misuse of private information and other proceedings where publication or disclosure is concerned, and would enable the courts to dismiss claims at an early stage where they are found to fall within the definition of a SLAPP.
The amendment will provide the first definition of a SLAPP; Mrs Justice Steyn rejected the Defendant’s characterisation of Brexit backer Arron Banks’ claim against journalist Carole Cadwalladr as a SLAPP “designed to silence and intimidate her”. The Judge held that despite the claim having failed at first instance - Banks was in fact subsequently partially successful on appeal - his “attempt to seek vindication through these proceedings was, in my judgment, legitimate. In circumstances where Ms Cadwalladr has no defence of truth, and her defence of public interest has succeeded only in part, it is neither fair nor apt to describe this as a SLAPP suit”.
For the purposes of the legislation, a SLAPP will be one which:
the Claimant’s behaviour has, or is intended to have, the effect of restraining the defendant’s exercise of the right to freedom of speech;
the information in respect of which the right to freedom of speech is to be exercised has to do with economic crime;
disclosure is or would be made for a purpose related to the public interest in combatting economic crime; and,
the Claimant’s behaviour in the context of the claim is intended to cause the Defendant either: harassment, alarm or distress; expense; and/or any other harm or inconvenience beyond that ordinarily encountered in the course of properly conducted litigation.
The Solicitors Regulation Authority (SRA) has previously issued a warning to regulated firms and individuals about “abusive litigation”.
During debate on the Economic Crime Bill in the House of Lords on 25 April 2023, faced with amendments relating to SLAPPs tabled by the Liberal Democrat peer Lord Thomas of Gresford (Amendment 80), the Conservative peer Baroness Stowell of Beeston and others (Amendments 87, 88 and 89) and crossbench hereditary peer Lord Cromwell and another (Amendment 105), the Government had indicated that while it was “firmly committed to legislating effectively, comprehensively and without undue delay“ on the issue of SLAPPs, it did not “think this Bill is the correct vehicle for tackling this issue” and that “The Government’s preference would be to handle the entire landscape of SLAPPs in one place, and that is not this Bill”.
To give effect to the proposals, Lord Bellamy, Parliamentary Under Secretary of State in the Ministry of Justice, has laid a series of amendments to the Bill to be inserted after clause 187 the effect of which is to:
Require the Civil Procedure Rules Committee to make rules giving the court discretion to strike out - whether on an application by the defendant or of its own motion - a claim which is a SLAPP and in respect of which the Claimant is unable to establish that the claim was more likely than not to succeed at trial;
Require the Civil Procedure Rules Committee to make rules restricting the ability of the court to make an order that the defendant pay the claimant’s costs in a case determined to be a SLAPP unless the defendant has misconducted itself in respect of the claim;
Define a SLAPP (Strategic Lawsuit Against Public Participation) claim as detailed above, but with additional detail expanding the scope of the definition of information to do with economic crime to “behaviour or circumstances which the defendant reasonably believes (or, as the case requires, believed) to be evidence of the commission of an economic crime” as well as to information which the defendant believes would “facilitate an investigation into” whether an economic crime had occurred where the defendant has/had reason to suspect an economic crime had occurred;
Permit the court to take into account the proportionality of the claimant’s conduct and “whether the costs incurred by the claimant are out of proportion to the remedy sought”, the defendant’s means where the claimant appears to have targeted the defendant as the weak link of potential defendants, and/or the claimant’s relevant failure or anticipated failure to comply with the Civil Procedure Rules or rules or recommendations of a regulatory body, such as the SRA, including having regard to its choice of jurisdiction, use of correspondence, making or responding to offers to settle and use of ADR etc.
The courts already have powers under the Civil Procedure Rules to address, including by striking out or dismissing claims, where there has been an abuse of the court’s process. Costs budgeting procedures brought into effect as part of the Jackson reforms already require the courts to approve the parties’ respective costs budgets at a relatively early stage as representing costs which are reasonable, necessarily incurred and proportionate. Indemnity costs can be awarded against a party engaging in unreasonable conduct. In defamation claims, s.1 Defamation Act 2013 introduced a statutory threshold for a statement to be considered defamatory requiring the publication to have caused or be likely to cause serious harm to reputation. Where there is serious harm to reputation, it is not merely the value of a potential ultimate monetary award that is relevant to assessing the proportionality of a claim. We were therefore initially sceptical as to the practical effect of the proposals when the announcement was initially published.
Having considered the precise terms of the amendments, these in fact go further than the terms of the announcement and the costs protections afforded to defendants are, in particular, to be welcomed. We remain concerned as to the prospect of defendants being able to establish that the final limb of the definition of a SLAPP, i.e. that the claimant’s conduct was intended to cause harassment, alarm or distress or expense or inconvenience beyond what would normally be expected in litigation, is satisfied. We are also concerned that the amendments would permit a claim which falls within the definition of a SLAPP to continue where the claimant can show that it is more likely than not to succeed at trial. There is a real risk that the amendments will not provide any additional protections for defendants even in the narrow range of claims to which they apply, and that it may in practice prove difficult to successfully have a claim struck out at an early stage. We anticipate, however, that defendants to proceedings potentially falling within the scope of the definition will bring strike out applications and that the parameters of the protection will become clear if the provisions are enacted in their current form.
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