At the end of October, the Economic Crime and Corporate Transparency Act (the 'Act') received Royal Assent. As reported here, this Act introduces reforms aimed at tackling economic crime and improving corporate transparency, including notable changes at Companies House. Further and significantly, the Act also constitutes the first anti- SLAPPs legislation introduced in UK law, providing judges with new powers to strike out SLAPPs claims relating to economic crime.
What are SLAPPs?
Strategic lawsuits against public participation, or SLAPPs, are lawsuits or threats of legal action, often lacking in legal merit, brought with the intent of harassing, censoring, intimidating and financially or psychologically wearing out critics. SLAPPs have become an increasing concern as claimants have sought new ways to quash critics and legitimate reporting.
Commonly framed as defamation cases and occurring in relation to data protection, privacy and environmental law issues, SLAPPs claims are typically brought by wealthy individuals or corporations who can afford legal costs incurred in court proceedings. In contrast, their opponents do not have the same financial capabilities. These groups can include whistle blowers, investigative journalists, writers and publishers.
The problem with SLAPPs
Claimants in SLAPPs claims play on the inequality of arms when it comes to the power and resources of their opponents, eventually hassling defendants into silence. The effect is the erosion of freedom of speech as well as the rule of law, two fundamental underpinning principles of the UK's legal system.
Lawyers must also adhere to their professional obligations, ensuring that when advising clients on bringing disputes, duties to their client do not override their public interest obligations, nor their duties to the court. In November 2022, the Solicitors Regulation Authority (SRA) warned that solicitors should be able to identify SLAPPs claims and ensure they decline to act for clients on these matters, demonstrating the significance of protecting defendants from these types of abusive proceedings.
The New Act
The new legislation is currently restricted to empowering judges to strike out SLAPPs which target those speaking out about economic crime. Specifically, the Act requires that the power to make English Civil Procedure Rules (CPR) be exercised so that the CPR includes provisions ensuring that SLAPPs claims relating to economic crime can be struck out. To strike out the claim, the court will need to determine that the claim is indeed a SLAPP claim and that the claimant has failed to show that it is more likely than not that the claim would succeed at trial.
Necessarily, a definition of a 'SLAPP claim' is provided for the purposes of the Act. Section 195 states that for a claim to be a SLAPP claim, the following four elements must be present:
- the claimant's behaviour in relation to the matters complained of in the claim has, or is intended to have, the effect of restraining the defendant's exercise of the right to freedom of speech;
- the information that is or would be disclosed by the exercise of the right to freedom of speech has to do with economic crime;
- any part of that disclosure is or would be made for a purpose related to the public interest in combating economic crime, and
- the claimant's behaviour in relation to the matters complained of in the claim are intended to cause the defendant (a) harassment, alarm, distress, (b) expense, or (c) any other harm or inconvenience beyond that ordinarily encountered in properly conducted litigation.
The aim is to ensure that defendants will be more thoroughly protected from these types of intimidation tactics, providing them with a new early dismissal mechanism if their case falls within the statutory definition of SLAPPs, to be determined by the court.
Further, on the basis that a SLAPP claim proceeds, defendants should not be faced with an excessive cost burden due to a new costs protection regime. The Act requires the CPR to include provisions to ensure that a court may not order a defendant to a SLAPP claim to pay the claimant's costs except where there is misconduct on the part of the defendant in relation to the claim that justifies such an order. This demonstrates the intention to prevent wealthy claimants bringing threatening and high value legal actions in the hope of repressing public criticism and avoiding scrutiny.
Looking ahead
As it stands, the Act applies to cases aimed at limiting freedom of speech in relation to economic crime only. Although 70% of the cases referenced in a report about SLAPPs published in April 2022 were connected to economic crime, it's likely, and certainly hoped by many, that the new legislation will act as a steppingstone for SLAPPs provisions in respect of other public-interest matters. The director of the Foreign Policy Centre, Susan Coughtrie, has addressed this, stating that to effectively address SLAPPS, a "standalone UK anti-SLAPP law is the sorely needed, and logical, next step".
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