Economic Crime (Transparency and Enforcement) Bill

Lord Thomas of Gresford Excerpts

2nd reading
Wednesday 9th March 2022 Lords Chamber

[Lord Thomas of Gresford (LD)]

My Lords, for over 50 years, it has always been a privilege and a pleasure to speak either before or after the noble Lord, Lord Carlile.

Last Friday, the Guardian reported that the Foreign Secretary, Liz Truss, has asked government lawyers to “find literally any way” to crack down on SLAPPs—strategic lawsuits against public participation. On the same day, Reuters reported the view expressed by a number of Members of Parliament, including Conservative MPs, that British sanctions on Russian oligarchs are being partly delayed over concerns that wealthy businessmen will take the Government to court unless they have built solid legal cases against those targeted. As the noble Lord, Lord Carlile, pointed out, they do not have the cash—or the organisation within the police departments which deal with this—to do that. I ask the Minister: does this account for the Government dragging their feet on sanctions—particularly now, as others have already mentioned, that they are giving six months to Russian oligarchs in this country to liquidate their assets? I regret that the Government have not taken the opportunity in this Bill to deal with the urgent problem of SLAPPs; nor was it in the list announced for Part 2 by the Minister.

The British justice system is undoubtedly not world-leading in this area. Other common-law countries, including the United States and Canada, have brought in anti-SLAPP laws which enable a journalist or publisher to apply to the court at an early stage for a law suit to be dismissed, if it relates to content which is in the public interest. Consequently, the Foreign Policy Centre has described the UK as

“the most frequent country of origin”

for foreign legal threats against investigative journalists. The journalist Catherine Belton wrote a book called Putin’s People: How the KGB Took Back Russia and Then Took on the West. Among other things, she wrote that sources had informed her of Putin’s plan to acquire Chelsea Football Club through Abramovich to increase his influence and to raise Russia’s profile, not only with the elite but with the British people. If that was his plan, the chanting of Chelsea supporters last weekend, interrupting the applause for Ukraine at Burnley, shows that Putin has succeeded in his object. Putin has succeeded in distorting British values of freedom and democracy, at least among Chelsea fans. Catherine Belton’s book was highlighted by the opposition leader Alexei Navalny from his prison cell in January last year when he revealed, among other things, that Putin secretly owned a £1 billion Black Sea palace. She was hit with libel actions from Abramovich, who was quickly joined by other oligarchs and the leading state oil company, Rosneft. Abramovich also sued her in Australia, where the book had been published. Miss Belton’s publishers, HarperCollins, stood bravely by her. The result of this hugely expensive litigation was some minor alterations to a few sentences in her book without the payment of any damages or costs. Another similar case was brought against the Financial Times investigative journalist Tom Burgis by the Kazakh mining company ENRC. As my noble friend Lady Kramer said, there are enablers. Solicitors for the oligarchs in this litigation include the well-known London firms Mishcon de Reya, Schillings, Harbottle & Lewis, CMS and Carter-Ruck.

I have answered Ms Truss’s call by drafting a Bill which is currently in the queue for a First Reading in this House. I am very happy to share this with the Government at this early stage. It is based on the Ontario legislation which was recently considered and approved in the Supreme Court of Canada. Essentially, my Bill provides for a defendant to apply to the court at an early stage to dismiss the proceedings where the judge is satisfied that the proceedings arise from a publication relating to a matter of public interest. It is then for the claimant to satisfy the judge that the proceeding has substantial merit, and that the public interest in permitting the proceedings to continue outweighs the public interest in protecting the publication. In weighing the public interest, the judge may take into account a variety of factors, including the chilling effect of the proceedings on any future investigative journalism and any disproportion between the resources deployed and the amount of damages likely to be awarded. The judge would have power to award damages to the journalist or publisher where he concludes that the proceeding has been brought in bad faith or for an improper purpose. I had thought of seeking to amend this Bill with these provisions, but I do not think they would come within the Long Title, nor would there be time—as the noble Lord, Lord Carlile, said—to adequately debate them. But this is a way to crack down on this abuse of our judicial system, and I look forward to the Government giving time for my Bill, or their own time to deal with the matter.

Economic Crime (Transparency and Enforcement) Bill

Lord Thomas of Gresford Excerpts

Committee stage
Monday 14th March 2022 Lords Chamber

[Lord Cromwell (CB)]

My mistake; I struggle with joined-up writing.

Since I get only bite of the cherry and have an amendment coming up in my name, I will tackle both Amendments 93 and 95 on resources. It is widely acknowledged and was highlighted emphatically by speakers at Second Reading that the resourcing of those responsible for the difficult work of identifying, investigating and prosecuting those covered by the Bill are currently inadequate. In the Minister’s letter of 11 March, which I referred to earlier, page 6 refers to an overall package of £400 million and the creation of a kleptocracy cell in the National Crime Agency and says that the NCA has “surged additional officers”. I am aware that the NCA has obtained fewer than five prosecutions for economic crime offences in the last five years and has seen its budget cut, despite calls for increases. The number of investigators at the proceeds of crime centre has declined, despite Parliament raising concerns. I simply do not know whether the resourcing now referred to is sufficient, but I am told that a figure of £1.7 billion is a more realistic amount to get this job done.

Amendment 95, to which I have added my name, calls for an annual review of the suitability of funding arrangements for enforcement agencies. A theme of our debates has been the need to revisit what we have discussed and agreed to here. It is pure vanity to pass legislation that cannot be enforced and resourced effectively. This amendment will be useful in making sure that a proper focus on resourcing is maintained. I therefore support Amendment 95 or, if it is preferred, Amendment 93, which has much the same effect.

Turning finally to Amendment 94 in my name, I am very grateful to the noble Lord, Lord Thomas, for adding his name to it. We have heard an awful lot about enablers during our debate, which draws a pantomime hiss that used to be reserved for lawyers, accountants and bankers—but, unfortunately, we all fall into that category of enablers now.

A number of speakers, myself included, raised the issue of SLAPPs, or lawfare, at Second Reading. As is appropriate at this stage, I do not propose to rehearse in detail what was said then. Nevertheless, it is a well-established fact that UK law firms and others—some, anyway—undertake deliberate intimidation tactics known as lawfare to prevent journalists and others bringing matters of public interest to light.

It is further well known that this has ensured that information in the public interest is regularly neutered or hidden. The rule of law requires equality before the law, but this behaviour goes well beyond any reasonable approach to a defence of reputation. It is the dark side of our legal system, where inequality of arms means that the wealthy can—at times, using ill-gotten gains—out-resource those on whom we as a society rely to find out the truth and shine a light into dark places.

The Defamation Act 2013 sought to introduce some protective measures, but this is a complex area of law that not only is costly but carries the risk of liability for the other party’s costs. It is this prospect of bankruptcy or insolvency that is primarily used to intimidate journalists and other organisations. Furthermore, such a defendant against a claim may be unable even to obtain a legal representative willing to take on the risk of cost recovery from the other side. Even what are known as “trials of preliminary issue” regularly run up costs of £25,000 or more, and a full trial will often cost well above £500,000. Even if successful, the defendant will be faced with the irrecoverable portion of their costs, which can also be very substantial—and we should remember that this does not take into account all the work, time, disturbance and anxiety before a court action even arises.

We must not allow the Bill’s purpose—tackling dirty money and illicit practices of the sort that it covers—to be undermined by allowing the wealthy to abuse our legal system in order to intimidate and muzzle the free press in this way. Amendment 94 would require the Government to assess how the Bill might be frustrated, have its impact blunted and its implementation thwarted by such conduct, and it would require the Government to share their findings with Parliament.

The Bill is operating in a very compressed timeline, and I am grateful to the Minister for his email exchange with me over the weekend on this issue. I note that the Deputy Prime Minister announced on Friday the launch of an urgent call for evidence in this area, and I have the Minister’s assurance that this call for evidence will not be just a listening exercise but that:

“Where action is needed, we will take it quickly and effectively”.


The origin of the Bill’s arrival here is the Russian invasion of Ukraine. An immediate step by the Putin regime has been to shut down the channels of free communication and free media within Russia. Surely we must ensure that we do not allow the same regime to do the same in the UK. I therefore invite the Minister to confirm on the record the Government’s commitment to this, not just as a one-off inquiry but on a regular basis, as foreseen in Amendment 94. I also ask him to confirm that the action he has referred to will include specific provision for it in ECB 2. I beg to move.

[Lord Thomas of Gresford (LD)]

It is a real pleasure to follow the noble Lord, Lord Cromwell. I spoke at length on this matter last Wednesday and I do not propose to speak on it again. Three things have happened since then. The Lord Chancellor has called for evidence, as the noble Lord pointed out. My Private Member’s Bill, which I referred to, seems to have reached its final form, and I hope it will be progressed quickly. I very much hope that this problem is properly dealt with in a very short time, and I await the Minister’s response.

[Lord Agnew of Oulton (Con)]

My Lords, I shall speak in support of my amendment, which seeks to achieve two things: an annual review of the funding adequacy of our crime-fighting agencies in this area, and a report within three months of the Bill, and annually thereafter, to set out how well we are managing this whole area.

I know we will hear warm words from the Minister about various sums of money—£400 million and so on—but the brutal reality is that this whole thing has been abysmally funded; that is the only way we can describe it. The noble Lord, Lord Cromwell, is right that the NCA’s own funding has fallen by some 4% in real terms at a time when international crime has been soaring.