ECCTA Incoming...SLAPP Happy?

Strategic Lawsuits Against Public Participation (commonly known as “SLAPPs”) are legal actions initiated with the purpose of silencing or intimidating vocal critics by burdening them with costly and time-consuming litigation which moves them away from being able to concentrate on whatever it is they oppose or wish to draw attention to. 

Often disguised as claims for defamation or similar civil wrongs, SLAPPs threaten freedom of expression and undermine public participation on issues of public interest. 

Recent legislative and regulatory measures have sought to curtail the significant effect of these lawsuits and within England and Wales the Economic Crime and Corporate Transparency Act 2023 (“ECCTA”), which, while primarily concerned with economic crime, has notable implications for SLAPPs due to its provisions around transparency, accountability and legal procedure.

Understanding SLAPPs and Their Effects

SLAPPs are legal actions typically brought by powerful individuals, corporations, or entities against journalists, whistleblowers, activists or ordinary citizens who speak out on matters of public concern. 

The goal of SLAPPs litigation is rarely, if ever, to win on the legal merits of the argument they seek to push forward; rather, the purpose is to intimidate critics, exhaust their resources, distract them, occupy their time and deter others from coming forward in alliance. 

SLAPPs impose significant financial costs on targets, they take time to defend, and they can stifle public debates on topics such as corruption, environmental harm, workplace misconduct, or political accountability.

While much coverage of ECCTA has focused on its objectives involving financial crime and fraud there is a broader emphasis to ECCTA which seeks to advance corporate transparency and accountability and consequently this has an indirect ramification for legal manoeuvring, including the deployment of SLAPPs.

SLAPPs and ECCTA

ECCTA fundamentally alters the environment in which SLAPPs are initiated and contested by making several changes to corporate and financial transparency:

• By mandating greater disclosure of beneficial ownership and enhancing reporting requirements for companies, ECCTA makes it more difficult for bad actors to use anonymous shell corporations as vehicles for SLAPPs. This transparency makes it easier to identify who (or indeed, what) is behind such litigation and it discourages the use of legal intimidation to shield or distract from corrupt or unlawful activities.
• ECCTA strengthens the hand of investigative journalists and other pressure organisations by ensuring better access to more reliable corporate information. Historically, journalists and activists have been the targets of SLAPPs precisely because these parties are those who seek to expose economic crimes or corruption. With improved access to accurate data, journalists, activists and the like can better substantiate their reporting, defend themselves in court, and deter frivolous claims.
• By increasing regulatory scrutiny and bolstering the enforcement powers of agencies such as Companies House and law enforcement, ECCTA provides additional mechanisms for spotting and addressing abuses of the legal system. If a company is found to be weaponising litigation to silence critics, regulators may have greater authority to investigate and act.

Limitations and Ongoing Challenges

Despite the positive developments ECCTA brings into play, its introduction is not going to result in the end of SLAPPs. 

ECCTA does not introduce specific procedural safeguards or dedicated anti-SLAPP legislation such as early dismissal mechanisms or cost-shifting provisions which do exist in other jurisdictions. 

Consequently, even once ECCTA is in effect individuals facing SLAPPs may still have to endure lengthy and expensive legal battles even when the underlying claim is frivolous.

Furthermore, while increased transparency makes it harder for litigants to hide behind anonymity, determined parties may still find ways to exploit the legal system. 

In relation to SLAPPs, ECCTA’s benefits are best viewed as complementary to, rather than substitutes for, specialised anti-SLAPP reforms.

Comment

Georgie Collins, partner specialising in issues of reputation and crisis management, comments:

“The introduction of ECCTA provides valuable side effects in the battle against SLAPPs. 

“By lifting the veil of corporate secrecy and providing more tools for enforcement, ECCTA helps to narrow the avenues available to those seeking to misuse the courts to stifle criticism. 

“The impact of ECCTA is, however, only going to be maximised when coupled with specific legal protections for those exercising their rights to free speech and public participation. 

“The challenge now is for lawmakers to build on ECCTA’s foundations and ensure that the law both exposes economic wrongdoing and protects the voices who bring it to light.”