{"id":12364,"date":"2023-11-07T07:50:00","date_gmt":"2023-11-07T07:50:00","guid":{"rendered":"https:\/\/www.taxpolicy.org.uk\/?p=12364"},"modified":"2024-01-21T15:35:10","modified_gmt":"2024-01-21T15:35:10","slug":"libel","status":"publish","type":"post","link":"https:\/\/heacham.neidles.com\/2023\/11\/07\/libel\/","title":{"rendered":"Zahawi, Barrowman and Mone: why libel law rewards liars, and how we could change it."},"content":{"rendered":"\n

Baroness Mone introduced a company, PPE Medpro, to the “VIP fast lane” for supplying PPE to the Government during the pandemic. There was copious evidence<\/a> that she and\/or her husband, Douglas Barrowman, ran the company. In December 2020, a lawyer instructed by Mone and Barrowman told the Guardian that<\/a> \u201cany suggestion of an association\u201d between the Tory peer and PPE Medpro would be \u201cinaccurate\u201d, \u201cmisleading\u201d and \u201cdefamatory\u201d. <\/p>\n\n\n\n

But now a representative of Mone and Barrowman has admitted<\/a> that Barrowman funded and ran PPE Medpro.<\/p>\n\n\n\n

Nadhim Zahawi said he would sue the Independent<\/a> if it reported he was under investigation by HMRC.1<\/a><\/sup>I believe similar threats were made to other newspapers; the Independent is unique in having published them<\/a>.<\/span> His lawyers accused me of defamation<\/a> for saying he was lying about his tax affairs, and claimed<\/a> that Zahawi’s taxes were “fully declared and paid in the UK”.2<\/a><\/sup>There were other false statements in my correspondence with Zahawi’s lawyers. Their first letter<\/a> made a factual claim about Zahawi’s father having provided startup capital which appears false, as the relevant document was signed much later and back-dated; the other claim about his father being heavily involved in the business was denied by the company<\/a> and has no supporting evidence. The letter also contained a statement – “Should there be any serious questions to be asked about our client’s taxes, HMRC will no doubt ask them and our client will respond accordingly” – where the use of the conditional tense can only be regarded as highly misleading (given that Zahawi knew that HMRC had already been asking him “serious questions”). And there were repeated subsequent claims that his taxes were fully declared and paid in the UK<\/span> Another firm instructed by Zahawi subsequently wrote to me and said Zahawi was not aware of any investigation by HMRC<\/a>.<\/p>\n\n\n\n

It was eventually revealed that Zahawi had been investigated by HMRC for over a year before these stories broke<\/a>. The Prime Minister’s ethics adviser concluded that Zahawi should have understood he was under investigation<\/a>.<\/p>\n\n\n\n

In both cases, a libel threat was made based upon a falsehood. <\/p>\n\n\n\n

Were they lying?<\/p>\n\n\n\n

I cannot read Mone, Barrowman or Zahawi’s minds, and it is conceptually possible that all were being honest. For example, Mone and Barrowman may have thought that Barrowman’s deep connection to PPE Medpro was not an “association”.3<\/a><\/sup>The ordinary meaning of “association” to my mind falls some way short of “provided half the money and chaired the consortium<\/a>“; the effect of the word was to deceive, and surely they knew that.<\/span> Zahawi may have not realised he was under investigation.4<\/a><\/sup>Unless his advisers were shockingly negligent they would have told him that this was an enquiry or a discovery assessment, and in ordinary English most people would describe that as an “investigation”. Sir Laurie Magnus concluded<\/a> that Zahawi should have understood he was under investigation; it follows that logically either Sir Laurie is wrong, Zahawi was incompetent in not realising he was under investigation, or Zahawi lied.<\/span> It is also possible that they were not aware of the statements being made by their lawyers.5<\/a><\/sup>It would be most surprising, and improper, if a lawyer making factual claims, supporting a serious allegation of defamation, did not do so on the basis of instructions from their client.<\/span> <\/p>\n\n\n\n

In my judgment these explanations are less likely than the alternative: Mone, Barrowman, and Zahawi intentionally instructed their lawyers to make false statements, in order to prevent people publishing unfavourable stories about them – stories they knew were substantively true. In my opinion, they likely lied.6<\/a><\/sup>An important note is that I am assuming the Guardian and Independent’s reporting of the libel threats they received is correct. That seems highly likely; surely otherwise Zahawi\/Mone\/Barrowman would have said so.<\/span><\/p>\n\n\n\n

If a libel case proceeds to court, and the claimant lies on the witness stand, then that is perjury, and prominent<\/a> people<\/a> have been prosecuted for it. But if a claimant lies in libel correspondence, directly or through their lawyers, and the matter never reaches trial, then there is no consequence. Except one: often the lie will be effective, and the story quashed, without ever seeing a courtroom.<\/p>\n\n\n\n

This is the “mathematics of libel”. <\/strong><\/p>\n\n\n\n

If you’re faced with a wealthy litigant then it’s usually rational for you to withdraw it and avoid defamation proceedings, even if you’re certain your story is true. Why? Because if you win you will devote perhaps a year of your life to the litigation, and end up out of pocket by a few \u00a3100k;7<\/a><\/sup>Whilst you may expect to get an order to cover your legal costs, the “standard basis” by which costs are awarded means you will usually end up having to pay around 1\/3 of the costs yourself<\/span> if you lose, you could be on the hook for \u00a31m or more. Or you could give up now, and hopefully pay nothing. This is the rational choice which – appallingly but inevitably – is forced on people by our defamation law.<\/p>\n\n\n\n

So if you want to stop people writing the truth about you, you just need two things: money to pay the lawyers, and the willingness to lie. The mathematics of libel will then do the rest, and force that annoying journalist to back down.8<\/a><\/sup>Even when a journalist doesn’t back down, the defamation laws have a more subtle effect. They slow down the story, requiring legal input and senior editorial involvement at every step. This can be a considerable benefit to the claimant.<\/span> And in the – usually unlikely – event they don’t, you can just walk away, free from consequence. It’s a one-way bet.<\/p>\n\n\n\n

We need to change this calculation.<\/p>\n\n\n\n

How?<\/p>\n\n\n\n