Pressure grows on UK to stop ‘abusive litigation’ by oligarchs against critics

The UK is making it more difficult for Russian oligarchs to pursue their opponents by tightening its sanctions regime, however freedom of speech advocates say the measures do not go far enough.

The government’s sanctions enforcement agency has made changes, which came into effect on April 29, that block the use of frozen funds for the payment of legal fees related to libel lawsuits in Britain.

The new rules make it harder for sanctioned individuals and companies to sue journalists for defamation, and are part of its wider crackdown on so-called strategic lawsuits against public participation (Slapps).

Slapps refer to legal actions used by powerful persons to pursue “abusive litigation” designed to “harass or intimidate” opponents into silence, according to the Solicitors Regulation Authority.

Since Russia’s invasion of Ukraine in February 2022, the UK has placed more than 1,300 individuals and entities linked to president Vladimir Putin’s regime under sanctions, which impose serious and extensive restrictions on those listed.

However, the Office of Financial Sanctions Implementation (Ofsi), which is part of the Treasury, has continued to issue licences allowing frozen assets to be used to pay for sanctioned individuals to cover their legal fees in accordance with the right to legal representation.

Ofsi has now amended the “Russian and Belarusian legal services general licence”, as it is known, so it no longer authorises legal fees for defamation cases.

The Ukraine invasion has thrown into sharp focus the use of the legal system by wealthy individuals and companies seeking to intimidate journalists, academics, authors and campaigners.

The threat of endless litigation and huge legal costs, sometimes running into millions of pounds, is used against writers who face financial ruin if they decide to defend a libel case.

Earlier this year, it was revealed that the Treasury granted a licence for a UK 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 UK sanctions.

Prigozhin had sought to personally sue Eliot Higgins, the founder of investigative website Bellingcat, for libel.

But Russia’s billionaires have long sought to use Britain’s strict libel, privacy and data protection laws to prevent light being shed on their activities.

Catherine Belton, a former Financial Times journalist, and her publisher faced a flurry of libel lawsuits — including one from former Chelsea Football Club owner Roman Abramovich — after the 2021 publication of her book Putin’s People, which examined the Russian president’s rise to power. The actions were all eventually settled or withdrawn ahead of trial.

Ofsi has said that “in most cases” it would consider the use of frozen assets by sanctioned individuals to finance libel cases “not an appropriate use of funds, and in many cases will be against the public interest”.

In a statement the government said: “We refuse to let sanctioned oligarchs manipulate the UK’s legal system to bully and intimidate journalists and we have excluded defamation from the general licence as a result.”

It added that licence applications would be considered “case by case” but “our default position will be to deny these applications”.

The UK vowed last July to bring forward new legislation to crack down on the practice including an early dismissal process to throw out meritless cases.

The Ministry of Justice said it “will legislate at the earliest opportunity” to bring in proposed reforms.

But free speech campaigners are concerned that there is limited parliamentary time before the next general election, and that without legislative reform the misuse of the legal system by the global 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 legislation, but it starts to ring hollow when almost a year later there is no proposed bill nor timeline for reform.”

Last year a MoJ consultation found that Slapps, or the threat of them, was having such a “chilling effect” that some individuals or corporations are regarded as “no-go” zones because of the risk of retaliation, she added.

The House of Lords’ communications and digital committee recently wrote to the government urging action. Lady Tina Stowell, chair of the committee, said it was “vital” that ministers introduce “specific legislation to tackle Slapps in the round”.

Legal regulators have also stepped up their scrutiny. The Solicitors Regulation Authority currently has about 50 ongoing investigations into alleged Slapps and last year issued a warning notice to law firms.

McCue Jury & Partners, the firm that represented Higgins, has alleged the Prigozhin lawsuit was a Slapp and complained to the SRA about Discreet Law, the firm that acted for Prigozhin until March 2022. The SRA confirmed it had received a complaint and is 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 complied fully with our legal and professional obligations. We do not consider it appropriate to comment further while there are ongoing SRA enquiries.” 

The regulator published a thematic review of 25 law firms on Slapps in February concluding that there was “good practice”. However, it added, there were “areas where firms needed to do better”.