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Monday, February 6, 2023

London Lawfare: how legal professionals helped Russia’s super-rich

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For Russian oligarchs looking for to silence opponents, the English authorized system has been likened to “the biggest, hardest bat you can pick up and swing”.

For prime London legal professionals and their companies, circumstances introduced by Russian billionaires, usually coping with points akin to alleged libel or knowledge safety, have translated into fats income.

But the equation has modified within the wake of Vladimir Putin’s invasion of Ukraine.

The imposition of sanctions on dozens of rich Russians by the UK has made it far harder for them to pursue authorized actions in British courts or to make use of UK regulation companies, which now require a particular authorities licence to characterize such shoppers.

In current months, there has additionally been a authorities shift away from welcoming courtroom motion by oligarchs to denouncing “Lawfare” — the abuse of authorized proceedings to grind down opponents.

Since the struggle began, the work performed by companies akin to CMS, Harbottle & Lewis and Carter-Ruck for Russian billionaires has come underneath growing scrutiny by legislators, each within the US and the UK. And the companies themselves have gotten extra circumspect about taking up new shoppers, in some circumstances closing down enterprise with Russia.

Bill Browder, a number one investor in Russia turned Kremlin critic, has been fierce and constant in his feedback on previous authorized actions in London that he says amounted to undue stress by the Russian state — a view the UK authorities itself now endorses.

Activist Bill Browder says actions in London amounted to undue stress by Moscow © Tolga Akmen/AFP/Getty Images

“For the oligarchs and the super-rich who can afford these sky-high costs, the threat of legal action has become a new kind of Lawfare,” British prime minister Boris Johnson declared in March. “We must put a stop to its chilling effect.”

Johnson’s phrases marked a dramatic distinction with feedback he made in 2012, when he wooed Russia’s super-rich, saying: “If one oligarch feels defamed by another oligarch — it is London’s lawyers who apply the necessary balm to the ego.” 

Silencing Kremlin critics

Over the previous decade, London has drawn in rich Russians and Kremlin allies to launch authorized motion in opposition to critics of Vladimir Putin — notably Browder, as soon as the largest international investor in Russia. In 2013, he was sued for libel by Pavel Karpov, a former Russian policeman, represented by the regulation agency Olswang, now a part of CMS.

Browder had fallen foul of Moscow after his auditor, Sergei Magnitsky, uncovered a large tax fraud by Russian officers — solely to be arrested and die in a Russian jail in 2009.

Karpov claimed that Browder’s web site instructed he was complicit within the “torture and death” of Magnitsky, however Mr Justice Peregrine Simon threw out the lawsuit in 2013 after ruling that Karpov didn’t have a status in Britain to defend.

Browder depicted the authorized motion as a part of a broader push by the Kremlin to discredit him and human rights laws handed in Magnitsky’s title within the US and finally many different jurisdictions. “I have no doubt this was a Russian intelligence operation to attack me and the Magnitsky act,” he stated.

In 2017, Browder confronted a second civil lawsuit in London, with CMS appearing for Nogotkov Kirill Olegovich, a Russian liquidator who sued him over the insolvency of a Russian firm as soon as related to him.

Browder’s legal professionals claimed that this was “part of a concerted retaliatory campaign by the Russian state”. Sir Geoffrey Vos threw out the case saying it was “inexcusable” that the liquidator had did not “alert the court to . . . the political background”.

Another Kremlin critic, former British spy Christopher Steele, was sued within the High Court in 2020 by Russian billionaire Mikhail Fridman and his associates Petr Aven and German Khan.

Former British spy Christopher Steele was sued within the High Court © Victoria Jones/PA

The case centred round allegations in regards to the males in a 2016 file that detailed Donald Trump’s purported ties to Russia and was produced by Steele’s firm, Orbis Business Intelligence.

Again, CMS had a central position within the proceedings. The three males, who had been suggested by Geraldine Proudler of CMS and barrister Hugh Tomlinson QC, received the case after the High Court discovered that the file contained inaccurate private knowledge.

Silencing journalists

Russia’s billionaires have additionally sought to make use of Britain’s libel, privateness and knowledge safety legal guidelines to forestall journalists from shedding gentle on their actions. Critics say their claims usually quantity to what are termed “strategic lawsuits against public participation” or SLAPPs — makes an attempt to intimidate critics by costly litigation.

A flurry of lawsuits adopted final yr’s publication of Putin’s People, an investigation by former Financial Times journalist Catherine Belton of the Russian president’s regime and rise to energy.

Fridman and Aven turned to CMS, which launched a libel and knowledge safety declare in opposition to the ebook’s writer HarperCollins. Roman Abramovich, the billionaire who would even be hit with sanctions this yr, lodged a libel lawsuit of his personal in opposition to the writer and Belton, hiring Tomlinson and Harbottle & Lewis.

Catherine Belton, author of ‘Putin’s People’ © Parliamentlive.television

Russian state oil firm Rosneft, represented by regulation agency Carter-Ruck, introduced a separate libel lawsuit in opposition to Belton and HarperCollins. Belton informed a parliamentary committee in March that there had been a “lengthy stand-off” with Carter-Ruck over mentions of Gennady Timchenko, a Putin ally now positioned underneath sanctions, that delayed the ebook’s publication by six months.

All the claims have now been settled or withdrawn.

Jessica Ni Mhainin, on the Index on Censorship, which campaigns for freedom of speech, says circumstances like Belton’s are “the tip of the iceberg”, with many lawsuits not making it to courtroom.

Mhainin stated the specter of countless litigation and big authorized prices can be utilized by the super-rich to press campaigners, lecturers or journalists, who can face monetary damage in the event that they defend a libel case.

Settling scores

Billionaire oligarchs have additionally used London’s prime regulation companies to settle scores with one another within the capital’s High Court.

In 2011, the late Boris Berezovsky, represented by Addleshaw Goddard — which says it has by no means acted for some other Russian oligarch — unsuccessfully sued Roman Abramovich, represented by regulation agency Skadden Arps, in a $6.5bn High Court trial that shone an unflattering highlight on Russia’s “wild east” capitalism within the Nineties.

Boris Berezovsky unsuccessfully sued Roman Abramovich © Warrick Page/Getty Images

Berezovsky alleged that Abramovich had intimidated him into promoting shares in oil and gasoline corporations at under their true price. Abramovich denied the claims and testified that he paid $2.3bn to Berezovsky as political safety cash.

Oleg Deripaska, the Russian metals tycoon positioned underneath sanctions by the UK in March, has additionally been lively in London’s High Court. In 2018, Rusal, then managed by Deripaska, was embroiled in a courtroom battle with billionaire Vladimir Potanin, who is just not underneath sanctions by the UK or US, as a part of a battle for management of Norilsk Nickel, a nickel and palladium producer.

Rusal sought to dam Abramovich from promoting his stake in Norilsk to Potanin’s firm.

New order?

Some legislators have singled out legal professionals and companies they are saying have helped Kremlin allies. UK Conservative MP Bob Seely used parliamentary privilege in March to call specialist media regulation companies Harbottle & Lewis, Carter-Ruck and CMS, in addition to Tomlinson, the outstanding barrister.

Last month, US senator Steve Cohen urged the Biden administration to put US journey bans on senior British legal professionals he claimed had been “foreign enablers of Russian oligarchs”. Among others, Cohen named Tomlinson, Nigel Tait of Carter Ruck, John Kelly of Harbottle & Lewis and Proudler, head of CMS’s Reputation and Media Litigation follow.

Since the Ukraine struggle started, Proudler has resigned from the Scott Trust, which adjudicates editorial complaints at The Guardian newspaper, the board of The Guardian Foundation, the media group’s charitable arm, and as chair of the board of governors of Middlesex college.

Bob Seely MP talking within the House of Commons © Parliamentlive.television

Many within the authorized occupation argue that they’ve been unfairly criticised, stating that legal professionals are closely regulated and that the courts have safeguards in opposition to unmeritorious lawsuits.

“We cannot have a situation where lawyers are reluctant to give advice to individuals, whether or not they have done anything wrong,” stated Jonathan Fisher QC, barrister at Red Lion Chambers.

CMS says it has decided that its media litigation course of was compliant with all skilled laws in addition to its wider duties on the time, including: “We strongly reject the recent allegations of impropriety that have been made against CMS and in particular Geraldine Proudler.”

Tomlinson has stated he had at all times acted correctly in accordance with the principles and “never acted as Mr Cohen suggests”, whereas Harbottle & Lewis has stated it acted in accordance with its authorized obligations.

Carter-Ruck stated it has acted for only a few Russian shoppers through the years, and doesn’t act for any entity linked to Putin’s regime. It stated it was false to recommend that, by defending shoppers’ countervailing rights, it set out improperly to censor the media or intimidate journalists.

Nevertheless, the backdrop is altering. CMS, for instance, now not accepts directions from Russia-based entities.

“This was a trend that was already happening even before the Russian invasion because of changes in society,” stated Tony Williams, a former managing associate of Clifford Chance, who added that enormous companies’ income had been way more reliant on areas akin to actual property and M&A than on Russian litigation.

“Law firms were already dealing with the ESG [environmental, social and governance] agenda and the issue of reputation management as they think more about the sort of clients and the type of work that they do.”

Meanwhile, Dominic Raab, Britain’s deputy prime minister and justice secretary, has launched a session on reform of the nation’s libel regulation, usually criticised as being so plaintiff-friendly that it inhibits free speech. It closed on May 19.

The Solicitors Regulation Authority, which governs the occupation’s conduct, has already up to date steerage to regulation companies, warning in March in opposition to pursuing litigation for improper functions and making allegations with out benefit — which it says “might arise because of a conflict with the solicitor’s own interest in generating fee income”.

Trevor Clark, lecturer within the authorized occupation at Leeds college, emphasises that whereas legal professionals ought to act within the pursuits of their shoppers, they “also have a duty under their professional code to act with integrity and not take advantage of third parties”. 

One instance he offers is that if there’s “an inequality of resources” — akin to circumstances which pit oligarchs in opposition to individuals for whom authorized motion could imply damage.

Geraldine Proudler

Partner and head of status and media litigation at CMS. Former director of The Guardian Foundation, which helps media underneath risk, and a former trustee of English PEN, the human rights organisation. Chambers and Partners 2022 authorized rankings information describe her as a “senior statesperson” and as giving “very sound advice”. 

Nigel Tait

Managing associate at Carter-Ruck, leads the agency’s defamation and media regulation division. According to his firm profile, he has “prevented the publication of many articles about clients, often by means of a phone call or letter”. These embrace pop stars and media personalities in addition to corporations. The Chambers and Partners information describes him as a “star individual” who’s “very focused on getting the best result for clients”.

John Kelly

Media and knowledge lawyer at Harbottle & Lewis, beforehand associate at Schillings and at Kelly & Co, a regulation agency in South Australia. His shoppers have included former US first girl Melania Trump, in addition to celebrities. He additionally acts within the discipline of sport regulation. The Chambers and Partners 2022 information describes him as having a “strategic robustness that gets results”.

Hugh Tomlinson, QC

Barrister at Matrix Chambers and a specialist in media and knowledge regulation. He has appeared in quite a few high-profile circumstances together with representing victims within the News of the World cellphone hacking litigation. A board chair of Hacked Off, the group which campaigns for a free and accountable press, he’s described as a “star individual” and having an “encyclopedic knowledge of the law” within the Chambers and Partners information.

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