The UK is making it harder for Russian oligarchs to prosecute their opponents by toughening its sanctions regime, but free speech advocates say the measures don’t go far enough.
The government’s sanctions enforcement agency made changes, which came into effect on April 29, that block the use of frozen funds for the payment of legal costs related to libel suits in Great Britain.
The new rules make it harder for sanctioned individuals and companies to sue journalists for defamation, and are part of its broader crackdown on so-called strategic public participation lawsuits (Slapps).
Slapps refer to legal actions used by powerful people to pursue “abusive litigation” designed to “harass or intimidate” opponents into silence, according to the Solicitors Regulation Authority.
From The Russian invasion of Ukraine in February 2022, the UK placed more than 1,300 individuals and entities linked to President Vladimir Putin’s regime under sanctions, which impose severe and widespread restrictions on those listed.
However, the Financial Sanctions Implementation Office (Ofsi), which is part of the Treasury, continued to issue licenses to use frozen assets to pay sanctioned persons to cover their legal costs in accordance with the right to legal representation.
The Ofsi has now amended the “general license for Russian and Belarusian legal services”, as it is called, so that it no longer allows legal fees for defamation cases.
The invasion of Ukraine highlighted the use of the legal system by wealthy individuals and corporations seeking to intimidate journalists, scholars, authors and activists.
The threat of endless litigation and huge legal costs, sometimes reaching millions of pounds, is used against writers who risk financial ruin if they decide to pursue a libel case.
Earlier this year it was revealed that the Treasury had granted a license to a British law firm to accept payment from Yevgeny Prigozhin, a close ally of Putin. The dispensation allowed Prigozhin, founder of the Wagner mercenary group, to circumvent British sanctions.
Prigozhin had sought to personally sue Eliot Higgins, the founder of investigative website Bellingcat, for defamation.
But Russian billionaires have long sought to use Britain’s strict defamation, privacy and data protection laws to prevent light from being shed on their activities.
Catherine Belton, a former Financial Times journalist, and her publisher faced a wave of defamation lawsuits – including one brought by former Chelsea football club owner Roman Abramovich – after her book was published in 2021 Putin’s people, which examined the accession to power of the Russian president. The actions were all eventually settled or withdrawn before trial.
The Ofsi said that “in most cases” it would consider the use of frozen assets by sanctioned persons to finance defamation cases “not to be an appropriate use of funds and in many cases , will be contrary to the public interest”.
In a statement, the government said: ‘We refuse to allow sanctioned oligarchs to manipulate the UK legal system to intimidate and intimidate journalists and have therefore excluded defamation from the general licence.
He added that license applications would be considered “on a case-by-case basis” but “our default position will be to deny such applications”.
Great Britain sworn last july to introduce new legislation to crack down on the practice, including an early dismissal process to dismiss baseless cases.
The Ministry of Justice said it will “legislate as soon as possible” to introduce the proposed reforms.
But free speech campaigners fear that parliamentary time before the next general election will be limited and that, without legislative reform, the misuse of the legal system by the world’s rich and powerful will continue.
Susan Coughtrie, director of the Foreign Policy Centre, the international affairs think tank, said: ‘Obviously we welcome the government’s repeated commitment to the legislation, but it starts to ring hollow when nearly a year later, there is no bill or timeline for reform.”
Last year, a Justice Department consultation found that Slapps, or their threat, had such a “chilling effect” that certain people or businesses are considered “no go” areas due to the risk of retaliation, a she added.
The House of Lords Communications and Digital Committee recently writing to the government to ask it to act. Lady Tina Stowell, chair of the committee, said it was ‘vital’ that ministers put forward ‘specific legislation to tackle Slapps around’.
Legal regulators have also stepped up their scrutiny. The Solicitors Regulation Authority currently has approximately 50 investigations in progress in the alleged Slapps and last year issued a warning notice to law firms.
McCue Jury & Partners, the firm that represented Higgins, alleged that Prigozhin’s lawsuit was a Slapp and complained to the SRA about Discreet Law, the firm that acted for Prigozhin until March 2022. The SRA confirmed that she had received a complaint and was investigating.
Discreet Law said: “It is public knowledge that Discreet Law LLP acted for Mr. Prigozhin and our position is that at all times we have fully complied with our legal and professional obligations. We do not consider it appropriate to comment further while there are ongoing SRA investigations.
The regulator has published a thematic review of 25 law firms on Slapps in February concluding that there were “best practices”. However, he added, there were “areas where companies needed to do better”.
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