Former CC partner writes to SRA over Zahawi ‘threat’ letter

The Solicitors Regulatory Authority must take action to prevent lawyers making ‘misleading’ claims that pre-action libel letters cannot be published, a former magic circle tax partner has urged.

Dan Neidle, previously Clifford Chance’s head of tax in London, has raised concerns about the ‘common tactic’ of solicitors stating that a letter before claim is confidential and threatening ‘serious consequences’ if it is published or even its existence is disclosed, which he says is ‘improper’.

He has called on the SRA to update its recent guidance on SLAPPs – strategic litigation against public participation – to ‘specifically refer to the practice of attempting to prevent the publication (or mentioning) of letters asserting potential libel claims’.

Neidle has also asked the SRA to warn firms about ‘assertions of confidentiality or “without prejudice” which do not have a firm legal basis’, in a letter sent to SRA chief executive Paul Philip today.

He wrote to the SRA after City firm Osborne Clarke contacted him on behalf of the chancellor of the exchequer Nadhim Zahawi in response to blog posts questioning whether Zahawi had avoided tax through an offshore family trust. Zahawi denies any such suggestion. 

Osborne Clarke sent Neidle a letter marked ‘confidential and without prejudice’ followed by a second which the firm said was ‘not for publication’. But Neidle – the founder of Tax Policy Associates, set up 'to improve the tax system and the public understanding of tax' – has published his communications with the firm and separately written to the SRA, saying that an assertion of confidentiality ‘does not make it so’.

He also emphasised that the without prejudice doctrine only applies to ‘negotiations genuinely aimed at settlement … it does not apply to correspondence which simply sets out a client’s case’.

‘An assertion that a letter is confidential, when it is not, is misleading,’ he wrote. ‘An incorrect assertion of “without prejudice” is misleading, as is the (also incorrect) assertion that the “without prejudice” doctrine prevents communication of correspondence to third parties.

‘And it is certainly misleading to claim there is any rule of law that prevents disclosure of even the existence of the correspondence. It is therefore improper for a solicitor to make these assertions.

‘There is a more fundamental point: the solicitors’ profession should uphold the rule of law with independence, honesty, and integrity. Intimidating potential defendants into not publicising the very fact they are potential defendants goes directly against these principles.’

He said that he did ‘not wish to make a complaint about Osborne Clarke or the individual solicitors involved in the correspondence to which I refer’, but that his ‘sole intention is to change future behaviour.’

Osborne Clarke declined to comment. A spokesman for Zahawi previously told The Times: ‘Nadhim sent a polite, confidential letter through his solicitors to Mr Neidle to correct a few inaccuracies and ask that he reconsider his allegation of dishonesty [about Zahawi’s initial explanation]. The letter did not ask for a reply.’