"SLAPP BACK": 5 Essential Updates you should know about SLAPP Lawsuits

Coined in 1980, SLAPPs (Strategic Lawsuits Against Public Participation) are nothing new. In recent years, the Russian war against Ukraine brought them into focus again. Often under the façade of privacy or libel suits, SLAPPs have been extensively employed by Russian oligarchs with links to Vladimir Putin’s regime to silence critics. The abuse of the legal process goes beyond Russia's ongoing war of aggression. In the field of commerce, for example, SLAPPs are filed against journalists, environmentalists and whistleblowers as a form of retaliation.

To plug the legal loophole, authorities and legal professionals around the world have joined hands to strike out SLAPPs Here, we selected five major actions taken against SLAPPs since 2022 to outline the latest development.

SRA Investigates Law Firms, Raises Fine Limit to 5% of a Firm’s Annual Domestic Turnover

The SRA (Solicitors Regulation Authority), a regulatory body for solicitors in England and Wales, visited 25 law firms to assess their performance in understanding and managing risks around abusive litigation in February 2023.

Through interviews and file review, the regulator found no evidence of firms actively abusing the litigation process yet identified two areas requiring improvements First, some solicitors did not update themselves on the SRA’s latest guidance on conduct in disputes, which highlighted unacceptable behaviours in SLAPP cases and clearly stated that a solicitor’s duty to the court and other professional obligations, outweigh their duty to clients under all circumstances Firms, on the other hand, are advised to introduce policies and training for employees on how to conduct fair and appropriate litigation

Second, the SRA noticed that “too many” solicitors had a poor understanding of their professional obligations to report potential misconduct by others. During the review, the SRA uncovered three suspected cases of misconduct where a firm failed to report potential abusive litigation by another firm A full-fledged investigation will be initiated, along with 40 other live investigations linked to SLAPPs, if there is actual evidence of the cases

To enhance regulatory power, the SRA also confirmed new fining powers and extended its authority The reform will come into effect later in 2023 It is comprised of several measures including new fining bands, more disclosure on its disciplinary decisions, and a pilot of personal impact statements in cases involving harassment. Notably, the SRA has showcased its determination to combat SLAPPs at the same time as substantially raising the fine limit to up to 5% of a firm’s annual domestic turnover from the previously frivolous amount of £25,000 Often a tool to cover economic crimes, SLAPPs could be effectively suppressed by hefty fines

European Court of Human Rights Backs PwC Whistleblower for Exposing ‘Luxleaks’ Scandal

After being called out by whistleblower protection experts, the Grand Chamber of the ECtHR (European Court of Human Rights) overturned the ruling by the lower chamber in Halet v. Luxembourg after confirming Halet’s status as a whistleblower on 14 February 2023

The appellant was a former PwC (PricewaterhouseCoopers) employee who disclosed internal company documents to uncover a whole financial system of tax avoidance known as the

‘Luxleaks’ Sentenced to a €1,000 fine for several charges by the Luxembourg courts after the disclosure, he appealed the decision in the ECtHR in 2021. However, the ECtHR held that the harm PwC sustained due to his disclosure surpassed the general public’s interest, hence maintaining the original decision by Luxembourg courts.

It was not until 2022 that the case was heard for the second time in the wake of growing public awareness of SLAPPs This time, the Grand Chamber made the judgement call to reverse the previous decision by the ECtHR. The allowed appeal has prevented the potential chilling impact of criminalising a whistleblower and preserved the right to freedom of speech enshrined in Article 10 of the European Convention on Human Rights

Canadian Lawyers Unanimously Pass Resolution to Prevent NDA Abuse

On 9 February 2023, the Canadian Bar Association passed a landslide vote on a resolution to stop NDAs (non-disclosure agreements) to take effect in cases involving allegations of abuse, harassment, discrimination, and other forms of injustice.

NDAs are initially legal contracts used to protect trade secrets by holding their signatories liable for keeping information confidential However, they have later been abused by perpetrators in the workplace to remain undercover and continue with their unethical behaviours

The formation of the resolution partly originated from the campaign “Can’t Buy My Silence” founded by Zelda Perkins and Prof. Julie Macfarlane. Perkins, a former assistant of the film producer and convicted sex offender Harvey Weinstein, broke an NDA with Weinstein after her resignation Her joint campaign is a successful example of how the public could propel legislative reform from the bottom up

“Freedom of speech is a common right in Western democracies, yet it could be easily under attack without adequate safeguards.”

Journalist-led Coalition Called on UK Government to Support ‘Anti-SLAPP Law’

A frequent target of SLAPPers, journalists and editors in the UK, formed a coalition to urge the legislation of the proposed “UK anti-Slapp law”. In November 2022, the coalition wrote and signed a letter to the justice secretary, Dominic Raab, regarding the matter Among the over 70 signatories, some prominent names included were the Guardian, the Daily Mail, and the Times

In response, a Ministry of Justice spokesperson promised: “This issue is of the utmost importance and is being given urgent consideration. We intend to introduce legislative proposals as soon as possible ” Freedom of speech is a common right in western democracies, yet it could be easily under attack without adequate safeguards Unlike the US or Canada, the UK has no legislation against SLAPP Hence, its legal system has been repeatedly exploited by guilty parties to mute those who dare to speak out.

European Commission Proposes Directive and Recommendation on SLAPPs

In April 2022, the EC (European Commission) proposed a Directive and a complementary Recommendation to halt the further expansion of SLAPPs in the EU (European Union) Currently, none of the member states of the EU have specific laws against SLAPPs, and there are no EU-wide rules that address the issue.

The targets under the protection of the EC directive and recommendation are journalists and human rights defenders The Directive sets out proposals against unfounded or abusive lawsuits with cross-border implications filed against natural or legal persons As for the recommendation, it focuses on training, awareness raising, support, and monitoring of legal professionals and potential victims of SLAPPs.

“Hong Kong already has comprehensive court rules for striking out cases for abuse of process including lawsuits to intimidate or harass. However, the concept of SLAPPs is still alien and the English experience has seen abuse of process rules are insufficient to address SLAPPs.”

SLAPPs in Hong Kong: Concept Still Alien, Abuse of Process Rules Insufficient

Coming back to Hong Kong, while the financial hub’s highly acclaimed achievements come in part from our effective judicial system, we are slow on acknowledging and embracing the global anti-SLAPP movement.

Hong Kong already has comprehensive court rules for striking out cases for abuse of process including lawsuits to intimidate or harass However, the concept of SLAPPs is still alien and the English experience has seen abuse of process rules are insufficient to address SLAPPs. The lack of regulation against intimidation lawsuits leaves whistleblowers susceptible to exploitation, owing to lack of whistleblowing protections in Hong Kong more generally Recent cases have involved a solicitor with professional reporting duties being the subject of harassment litigation This poses a risk to the credibility of the Hong Kong courts and the regulation of Hong Kong lawyers more generally.

Therefore, the city has a strong case to review its practices over misconduct in litigation to catch up with its peers

Disclaimer: This publication is general in nature and is not intended to constitute legal advice You should seek professional advice before taking any action in relation to the matters dealt with in this publication Our consultant Samantha Bradley is currently engaged with both the Law Society and the Bar Council on the need to address SLAPP behaviours, particularly in connection with lawyers performing duties to report misconduct to their employers or regulators

About Ravenscroft & Schmierer

Ravenscroft & Schmierer, founded in 1985, is a leading law firm in Hong Kong with an international focus. Our lawyers come from and are qualified in multiple jurisdictions assisting clients all over the world. Whether you reside in Hong Kong or conduct business here, rest assured that you have a knowledgeable and experienced legal team by your side.

For specific advice about your situation, please contact:

Samantha Bradley Consultant, Ravenscroft & Schmierer

+852 2388 3899

sbradley@rs-lawyers.com.hk