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Nadhim Zahawi’s lawyer is vulnerable to being sanctioned for making an attempt to limit a critic of the previous Conservative chancellor with intimidatory warnings.
It’s the first time a solicitor has been referred to a tribunal over an alleged ‘Slapp’ — a strategic lawsuit towards public participation.
Zahawi introduced on Thursday that he would step down from parliament on the subsequent normal election. An MP since 2010, he was sacked as Tory chair final yr after being discovered to have dedicated breaches of the ministerial code by failing to be clear about his tax affairs.
The Solicitors Regulation Authority this week determined to refer Zahawi’s lawyer to the Solicitors Disciplinary Tribunal for allegedly telling tax skilled Dan Neidle that Neidle couldn’t reveal that he had obtained a requirement to retract an allegation he had printed concerning the MP, in keeping with two individuals briefed on the transfer.
The accomplice at legislation agency Osborne Clarke wrote to Neidle in 2022 telling Neidle that the demand he had obtained from the lawyer — on behalf of Zahawi — was “with out prejudice” and confidential, and warned him towards publishing and even referring to it, saying it might be a “severe matter”.
The SRA thought of the lawyer’s conduct might quantity to a Slapp — an strategy employed by attorneys to attempt to intimidate and shut down reporting.
The apply has come beneath better scrutiny lately over issues that notably Russian oligarchs and different highly effective people weaponised litigation to defend themselves from scrutiny.
The SRA has investigated a number of situations of alleged Slapps, however the case involving Zahawi’s lawyer is the primary time the regulator has referred the alleged use of such conduct to the SDT.
It’s as much as the SDT to determine on whether or not to carry prices towards the lawyer. Its choice is predicted within the coming months.
The SRA in 2022 issued steerage describing Slapps as “the misuse of the authorized system, and the bringing or threatening of proceedings, as a way to discourage public criticism or motion”.
It later warned attorneys towards any inappropriate labelling of correspondence with phrases corresponding to ‘not for publication’ and ‘confidential’, “when the circumstances for utilizing these phrases are usually not fulfilled”.
The SRA notes on its web site that it often solely refers instances to the SDT when its “view is that the misconduct is so severe it requires a solicitor to be prevented from practising”.
Solely the SDT can droop and strike off solicitors and it additionally has limitless fining powers, whereas the SRA can solely wonderful people as much as £25,000.
Zahawi paid £5mn to HM Income & Customs, together with a £1mn penalty, to succeed in a settlement with the UK tax authority whereas he was chancellor in the summertime of 2022.
Earlier than getting into politics, Zahawi had made his estimated £100mn fortune as co-founder of YouGov, the polling firm.
Balshore Investments, a Gibraltar-based firm, described in YouGov annual studies as “the household belief of Nadhim Zahawi”, held a 40 per cent stake within the enterprise that was value greater than £20mn earlier than it was offered down by 2018.
Neidle, founding father of think-tank Tax Coverage Associates and previously head of tax at Clifford Likelihood, claimed that if the sale had been chargeable for capital features tax within the UK, it might have offered £3.7mn to authorities coffers.
Zahawi mentioned in 2022 that he had by no means had an curiosity in Balshore Investments, or any belief related to it, and that neither he nor his spouse, or their kids, have been beneficiaries.
A spokesperson for the MP mentioned his father Hareth Zahawi, who lives overseas, owned Balshore.
However Neidle’s investigation into Nadhim Zahawi’s tax affairs discovered that the previous minister had obtained a fee of £99,000 from Balshore Investments in 2005, opposite to his claims that he had by no means benefited instantly from the belief.
A spokesperson for Osborne Clarke mentioned: “We’re disillusioned with the SRA’s choice to refer this matter to the tribunal, and we disagree with the idea and reasoning for the referral.
“We have now rigorously thought of and investigated the matter with exterior advisers and are assured that the accomplice acted throughout the established legislation and apply on this space.”
“We take into account that the accomplice involved behaved pretty and appropriately in his communications with the third celebration and didn’t search to mislead or take unfair benefit in any approach,” they added.
Zahawi didn’t reply to a request for remark.
Neidle mentioned: “SRA investigations are confidential, and so I gained’t be commenting till the present processes are full.”
