Yesterday, Nadhim Zahawi responded to an innocuous tweet with a libel threat. He refuses to answer any of the many, many questions about his tax affairs. The inevitable conclusion I and many others will reach is that he has something to hide.
UPDATE 31 January 2023: when I received the email below forcibly denying that Zahawi was the subject of an HMRC investigation, I had no idea that Zahawi was not only fully aware of an HMRC investigation, but had recently settled it and paid a large penalty. It seems most unlikely his lawyers knew that. Zahawi probably lied to them. The whole episode is extraordinary.
During the two-hour window between knowing Kwasi Kwarteng had been fired as Chancellor, and knowing Jeremy Hunt had been appointed as his successor, there was some speculation that Nadhim Zahawi was about to be appointed. I posted this tweet:
Fortunately I was right, and she wasn’t. But two hours later, I received this email:
When I was a trainee lawyer, assisting in some long-running piece of litigation, I drafted a response to the other side. I said I was “astonished” at some point they were asserting. The senior partner supervising me was not impressed. “We are never surprised, astonished, perplexed, amazed, stunned or shocked”, he said. Lesson learned.
Well, I am surprised, astonished, perplexed, amazed, stunned and shocked at this email.
The story that Zahawi was under investigation by the NCA was first reported by the Independent. The Guardian then ran another story, apparently independently sourced, that the Cabinet Office’s propriety and ethics team alerted Boris Johnson to an HMRC “flag” over Zahawi before his appointment. The Times then reported that HMRC launched an enquiry after being passed information by the NCA. This has all been widely covered elsewhere. It is surprising, astonishing, perplexing, amazing, stunning and shocking that Zahawi or his lawyers think it can possibly be defamatory to refer to these reports. All the more so when, so far as I am aware, he has taken no action against any of the newspapers involved.
It is also wrong in law1I am not a defamation specialist. I spoken to lawyers who are (for which: many thanks). This is one of the many reasons why making baseless legal threats to senior lawyers is not the greatest idea. A statement is only defamatory if it causes “serious harm” to the reputation of the claimant. These newspaper allegations may well have caused “serious harm” to Mr Zahawi. My repeating them does not – it is a drop in the ocean of harm that Mr Zahawi’s reputation has suffered.
Furthermore, there is a clear and compelling public interest in allegations that a former Chancellor (and current rather less important Chancellor) is under criminal investigation. Before the Defamation Act 2013, tough luck – public interest was no defence to a defamation claim. But, unless my watch has stopped, it is not 2013, and it is.
And my view that Mr Zahawi is almost certainly under investigation by HMRC is informed by my experience as a senior tax lawyer, and head of UK tax for one of the largest law firms in the world, as well as the discussions I’ve had with other tax experts and retired HMRC officials. This is far from being wild speculation. If media reports are correct, then HMRC already had an investigation running at the point I and others started writing about Mr Zahawi’s tax affairs. If the reports are not correct, then HMRC would almost certainly have started an investigation at some point around July 2022 (as if there are credible public reports that a wealthy and high-profile individual may have avoided or evaded tax, then HMRC will normally commence an investigation). There is no reason Mr Zahawi would know about it. An “investigation” is not a formal legal step: it happens behind closed doors, and the taxpayer is not informed. At some point, HMRC would often (but not always) write to the taxpayer raising any questions that the investigation has raised (but would normally not use the word “investigation”). If HMRC then concludes they have enough to launch a formal enquiry then it’s at that point Mr Zahawi would be informed, with the word “enquiry” likely used – and the way that HMRC deadlines work mean that it’s likely they would do so in December 2022 or January 2023.
So I cannot be certain, as a strictly factual matter, that Mr Zahawi is under HMRC investigation – nobody outside HMRC can be. It is, however, my expert and informed opinion that he is almost certainly under investigation (whether he knows it or not). And that is absolutely a matter of public interest. And, unless it is 2013, “honest opinion” and “public interest” are both defences to defamation.
All this means that the email from Mr Zahawi’s lawyers asserts, rather aggressively, legal claims that are baseless, and which a few minutes’ research would have shown to be baseless. These arguments are not particularly obscure or difficult to identify. A couple of good Google searches would have done the trick. But I don’t think Mr Zahawi or his lawyers cared – the point of the email was not to assert a legitimate legal claim, but to stifle public discussion of his affairs. It was, in other words, a SLAPP – a “strategic lawsuit against public participation”. Here’s an excellent summary of what that means:
Strategic Lawsuits Against Public Protection, or SLAPPs, are a growing threat to freedom of speech and a free press – fundamental liberties that are the lifeblood of our democracy.
Typically used by the super-rich, SLAPPs stifle legitimate reporting and debate. They are at their most pernicious before cases ever reach a courtroom, with seemingly endless legal letters that threaten our journalists, academics, and campaigners with sky-high costs and damages.
SLAPPs pile on the pressure until investigations into corruption are shut down, and some individuals or corporations are regarded as ‘no go’ zones, because of the risk of legal retaliation.
That’s courtesy of the government, of which Mr Zahawi formed part, as part of its laudable initiative to stamp out SLAPPs. Mr Zahawi should look in the mirror.
It is unethical and improper for ACK Media Law LLP to write emails of this kind, making baseless legal threats. At a time when the Solicitors Regulation Authority has taken a strong stance against SLAPPs, it is also extremely unwise. I have therefore invited them to withdraw; if they do not, I will refer them to the SRA:
I will continue to write about Mr Zahawi, and others should too. It is in the public interest and, post-2013, it is in practice almost impossible for a senior politician to win a defamation claim on a matter of public interest. When Zahawi refuses to answer any of the many, many questions about his tax affairs, and responds to innocuous tweets with libel threats, the inevitable conclusion I and many others will reach is that he has something to hide.
- 1I am not a defamation specialist. I spoken to lawyers who are (for which: many thanks). This is one of the many reasons why making baseless legal threats to senior lawyers is not the greatest idea