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24 January 2023

Nadhim Zahawi has shown how the powerful silence their critics

Legal threats against journalists asking legitimate questions are rife. Those in power should be encouraging scrutiny, not stifling it.

By Emma Haslett

In one of my first roles as a business journalist it was a rite of passage for a new reporter to be given the phone number of a certain well-known British entrepreneur and told to ask for comment on a story about his company. However innocuous the story, the result would always be the same: angry denial, a torrent of bad language and threats made towards to the caller, their colleagues, their publication and, on at least one occasion, their parents. When the reporter hung up, ashen-faced, it would be to gales of laughter from the rest of the news team.

It’s all fun and games until those threats prevent legitimate reporting. Dan Neidle, a former City lawyer and founder of the research group Tax Policy Associates, has been reporting on the former chancellor and now Conservative Party chairman Nadhim Zahawi’s tax affairs since last summer. Zahawi has, it has since been revealed, paid a settlement to HMRC reportedly worth millions of pounds. Neidle’s questions about £27m allegedly held in an offshore company linked to Zahawi, who has denied impropriety, were initially met, he says, with threats from the MP’s law firm, which headed its correspondence “Without Prejudice”, meaning it couldn’t be published, and on one occasion warned of “serious consequences” should Neidle continue to question Zahawi’s integrity.

The “without prejudice” letter is a familiar hazard of reporting on corporate wrongdoing. As assistant editor at the business newspaper City AM, I took my fair share of menacing calls from well-known law firms while my reporters were conducting investigations, with braying lawyers accusing us of “factual inaccuracies” that, after a bit of questioning, usually turned out to be reporting that their clients just didn’t like much. To quote Neidle: “This just made me more confident I was on the right track.” One company dispensed with the lawyers altogether, instead posting a public notice on the London Stock Exchange accusing the paper of “fake news”.

Such measures form part of what are called Slapps – strategic lawsuits against public participation – in which wealthy individuals use vexatious claims of defamation to prevent further questions being asked. The intention is not for the case to actually end up in court, but to threaten the prodigious expense of a legal battle, and to force an editor or publisher to decide that the truth is in this case simply too expensive.

The UK is particularly bad for this. A report published last year by the freedom of speech organisation Article 19 found the UK is “by far the most frequent international country of origin” for Slapps, and pointed to a “steady number” of cases going through UK courts. Some actions that Article 19 has called Slapps, including those taken against the journalists Catherine Belton and Tom Burgis, have been aimed against people reporting on Russian oligarchs in the UK (some of these actions were in the end settled in court). Others, such as one used by a Swedish businessman based in Monaco, use the British legal system but are intended to prevent reporting in other countries.

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Neidle’s reporting has prompted the Solicitors Regulation Authority to issue a warning to lawyers who try to cover their threats with a “without prejudice” notice (which, Neidle says, is meaningless except in the context of negotiations in good faith). And last year Dominic Raab, the Justice Secretary, revealed plans for a “three-stage test” to reduce the number of malicious lawsuits targeted at journalists and campaigners. But this legislation has yet to arrive, and ministers have more recently rejected MPs’ appeals to include such measures in the Economic Crime Bill. As Zahawi’s behaviour shows, not everyone in government supports the open scrutiny of their affairs, or recognises the importance of responding to legitimate questioning quickly, frankly and without threat.

[See also: Rishi Sunak must sack Nadhim Zahawi to retain any credibility]

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