New Carter-Ruck ruling could leave legal watchdog ‘toothless’ against SLAPPs

Carter-Ruck, one of London’s most feared libel firms, has secured a high court victory that deals a huge blow to the Solicitors Regulation Authority (SRA), the body tasked with keeping lawyers in check.

The regulator was ruled to have been trying to use a power it never had: the right to demand that law firms hand over confidential correspondence between them and their clients.

Monday’s judgment, in a case brought against the SRA by Carter-Ruck and businessman Mohamed Amersi, means that unless the client agrees to release the material, those private conversations are now beyond the regulator’s reach.

This is particularly bad news for the SRA’s ongoing attempts to tackle SLAPPs, the abusive legal actions used by the rich and powerful to shut down scrutiny. In order to prove misconduct in these cases, the SRA often needs to be able to establish exactly what a lawyer knew about their client’s intentions. Without access to their private correspondence, doing so is almost impossible.

The judge admitted as much in his judgment, saying that the ruling could cause some SRA investigations to become “more difficult, less effective or ineffective”.

It marks the second galling defeat within a year for the SRA at the hands of Carter-Ruck, after the collapse in December of its case against one of the firm’s partners for sending an “improper” legal threat as part of her work for OneCoin, a $4bn crypto scam. It was seen by many as a test of the regulator’s supposed crackdown on SLAPPs. A tribunal found there was no case to answer.

Dan Neidle, founder of Tax Policy Associates and party to the high court’s first successful use of anti-SLAPP legislation, said this week’s ruling was “extremely serious”.

“This is going to embolden the worst parts of the profession,” he said, “particularly the solicitors who act for wealthy and powerful people trying to silence their critics.”

Denied access

Since 2023, the SRA has been looking into Carter-Ruck’s conduct while representing Amersi in defamation and data-protection claims. As part of its investigation, the SRA demanded documents from Amersi’s client files. Some were protected by legal professional privilege, the longstanding right that allows clients to communicate confidentially with their lawyers.

Amersi refused to waive this right, and instead he and Carter-Ruck challenged the SRA over whether it even had the right to ask. (Amersi is not himself the subject of the SRA investigation.)

The government rejected a proposal in 2007 to bring in clear legislation guaranteeing access to privileged information. But the SRA had good reason to believe it was allowed access. Decades earlier, the court of appeal had found that the Law Society, the professional body for lawyers, could override privilege when investigating solicitors “for the public good”, provided it kept the information confidential.

After being challenged by Carter-Ruck, the SRA argued that subsequent cases had confirmed that principle and that without such a power its statutory investigations could be frustrated.

Mr Justice Butcher disagreed. Regardless of whether or not it might be “desirable” for the SRA to have this power, he said, the fact was it did not. If parliament wanted the regulator to be given access to such material, it needed to say so.

Carter-Ruck welcomed the decision, describing legal professional privilege as “sacrosanct” and saying it had been professionally obliged to defend Amersi’s rights.

Deepening struggles

The Bureau’s recent reporting has revealed the breadth of people facing alleged SLAPPs, from abuse survivors and environmental campaigners to people who simply posted negative reviews online. All were subject to trumped-up legal action from aggressive lawyers.

The problem created by Monday’s ruling is that it puts all power in the hands of the client, who may have little reason to hand over material that could incriminate their own lawyer.

As Neidle explained: “If misconduct turns on private knowledge or purpose, the client obviously won’t waive privilege, and the SRA won’t be able to find the evidence to prove its case.”

Susan Coughtrie, co-chair of the UK Anti-SLAPP Coalition, said the judgment could leave the regulator “completely toothless when it comes to tackling SLAPPs”.

The SRA is already under fire from campaign groups who say it has been slow to tackle the issue.

And the consequences are not confined to SLAPPs. The SRA identified six recent investigations in which it said privileged material had been necessary to investigate alleged misconduct including dishonesty, fraudulent misuse of client money, falsification of legal documents and fraudulent conveyancing.

The SRA is now issuing new guidance to its staff working on affected investigations and is seeking permission to appeal the ruling.