Privilege ruling puts SRA’s SLAPP efforts under pressure

The High Court has ruled that the SRA cannot use its statutory investigation powers to force law firms to disclose privileged documents, dealing a blow to its efforts to investigate instances of alleged abusive litigation.

Mr Justice Butcher ruled on Monday that section 44B of the Solicitors Act 1974 does not authorise the regulator to compel disclosure unless the client waives privilege.

Defamation firm Carter-Ruck and its client, businessman Mohamed Amersi, brought the challenge over demands for material from his files.

Why it matters

The ruling limits the evidence the SRA can demand, particularly in investigations into alleged strategic lawsuits against public participation, or SLAPPs.

The regulator argued that privileged communications can be essential to establishing whether solicitors pursued meritless claims or helped clients use litigation for improper purposes.

The judge accepted that some investigations could become more difficult or less effective, but that did not mean Parliament had authorised the SRA to override clients’ privilege, and legal regulators enjoyed no special exception.

“That is not enough to override the fundamental right of LPP [legal professional privilege],” he said of the provision’s potentially ambiguous wording.

The ruling does not affect the SRA’s separate intervention powers, which can require access to privileged files. Whether it should be able to compel disclosure during investigations was ultimately a matter for Parliament, the judge said.

The dispute behind the ruling

The SRA has been investigating Carter-Ruck since September 2023 over data protection and defamation claims brought or threatened for Amersi in 2021/22. The firm and Amersi deny any wrongdoing.

Amersi brought a defamation claim against former Conservative MP Charlotte Leslie and the Conservative Middle East Council. It ended in June 2023 after the High Court dismissed the case.

Monday's ruling concerns the SRA’s access to privileged material, not whether Carter-Ruck committed misconduct. The SRA is seeking permission to appeal.

What they said

Jonathan Peddie, the SRA’s executive director for investigations, enforcement and litigation, said access to all relevant evidence was vital to protecting the public and upholding professional standards.

“Our ability to get to the truth of many matters may be compromised if we can no longer access information protected by legal professional privilege," he said.

Campaign group Spotlight on Corruption urged Parliament to “urgently” put the powers beyond challenge.

Dr Helen Taylor, deputy director, added: “This ruling is a major blow for the SRA - and for the public interest - in holding lawyers to account, and leaves the legal regulator little more than a paper tiger. The SRA simply cannot do its job if the inner workings of a law firm are a black box.”

A Carter-Ruck spokesperson said: “This is clearly a landmark decision for the legal profession and its clients but at its heart is a simple but fundamental principle - namely that, in the absence of an express statutory requirement to the contrary and with very few exceptions, a client’s legal professional privilege is sacrosanct.”

SLAPP setbacks

The decision follows other setbacks for the SRA over alleged SLAPP-related conduct, including the clearance of Osborne Clarke partner Ashley Hurst earlier this year over his representation of former chancellor Nadhim Zahawi.

Misconduct proceedings against a Carter-Ruck partner over her work for OneCoin founder Ruja Ignatova were also dismissed, leaving the regulator potentially facing up to £700,000 in costs.