A lawyer acting for former chancellor Nadhim Zahawi has denied improperly restricting a British Journalism Awards winner from discussing communications regarding the politician’s failure to pay tax.
Ashley Hurst, of law firm Osborne Clarke, faces a solicitors disciplinary tribunal over allegations that he sent an email and letter to Dan Neidle, founder of Tax Policy Associates, in which he “improperly attempted to restrict Mr Neidle’s right to publish that correspondence and/or discuss its contents”.
The communications asked Neidle to retract claims he had published that Zahawi lied about failing to pay £3.7m in tax, and also not to publish the correspondence.
Neidle picked up the Investigation of the Year prize at the British Journalism Awards 2023 for his coverage of Zahawi’s business dealings on his website.
The Solicitors Regulation Authority (SRA) alleges Hurst breached its code of conduct.
The email, sent on 16 July 2022 and marked “confidential and without prejudice”, said Zahawi considered Neidle “overstepped the mark today by accusing him of lying to the media and the public” and conveyed an opportunity for Neidle to “retract your allegation of lies in relation to our client”.
It also said: “I have marked this email without prejudice because it is a confidential and genuine attempt to resolve a dispute with you before further damage is caused.
“It is up to you whether you respond to this email but you are not entitled to publish it or refer to it other than for the purposes of seeking legal advice.
“That would be a serious matter, as you know. We recommend that you seek advice from [a] libel lawyer if you have not done already.”
Dan Neidle: From tax lawyer to journalism superhero
Giving evidence on Tuesday, Hurst said he drafted the email on his phone at his sister-in-law’s flat as he did not have his laptop with him.
He had been with his family, but dealt with the situation from a quiet place, he added.
The lawyer said the strategy would not have changed had he had his laptop, particularly given the “considerable amount of time pressure” as a result of publication deadlines for Sunday papers.
David Price KC, for the SRA, put to Hurst that the email improperly attempted to restrict Neidle because it had gone beyond prohibiting him from publishing the details of the email on his blog or Twitter account, and also forbade him from discussing it with a third party such as a family member or close colleague.
Hurst said “it was not my intention to impose undue restriction on Mr Neidle”.
He added that he would have accepted the request “had [Neidle] come back and said ‘this is an undue restriction, you’re telling me I can only speak to my lawyer about it, I want to speak to my wife about it under the conditions of confidentiality’”.
He added that he would have rejected a request from Neidle to speak to an MP or journalist given the risk that details would then be publicised.
Adding the word “publicly” after the phrase “entitled to publish it or refer to it” would not make sense “as a matter of English”, Hurst said, before accepting that the wording gave rise to the interpretation that Neidle could not mention the email to third parties.
He added: “I would say it’s a little ambiguous. It’s not my best piece of drafting I have to admit.”
Asked if he was “threatening” Neidle in the email by raising it as a “serious matter”, Hurst said: “I think I don’t want to be lawyer about every answer, the word threaten has a normal meaning and a more legal meaning.
“In a sense, of course, my email, which sets out the nature of a legal claim, can be interpreted as carrying a degree of threat, the obvious one being that if a letter is not responded to or engaged with then legal proceedings can potentially follow.”
He said he “was not trying to be threatening”, adding that any legal correspondence that intimates a claim and discusses the reservation of rights “carries an element of threat”.
The email had also said: “Our client reserves his rights in relation to what you have published to date.”
Hurst told the panel: “I don’t think I made any mistake on the law. I, looking back as I have done many times, thought about whether I could have expressed myself more clearly in the event, particularly to explain the without prejudice principle.”
He said he was presenting the opportunity to start without prejudice proceedings, and added: “There are ways in which I could criticise my own email and [how I could have done] a job that might not land me in this position. But that doesn’t mean I accept I was wrong.
“I did not, in my view, make a mistake of law. I did not make a mistake in relation to fact, in relation to where I was at that particular time.”
Dan Neidle: I thought email was ‘shocking’
Giving evidence to the disciplinary panel on Monday, Neidle said he took the email to mean that he could not publish the fact that he received a message from the then-chancellor’s lawyers ordering him to retract the claim and that “there would be serious consequences if I did”.
“I thought that was shocking,” he said, adding that he was not sure if it was a threat of civil proceedings on the basis of breach of confidence or a threat to take it to the SRA or both but he “knew it was a threat”.
Neidle eventually published both the email and the letter from Hurst, crediting those publications with bringing a “great deal” of attention to Zahawi’s tax affairs.
“Ultimately (it) led to Mr Zahawi’s undoing when the fact of his secret settlement became public,” he said.
“If I had not been able to publish, Mr Zahawi would still be in politics and might even be prime minister.”
Neidle called the email a “request that Mr Zahawi gets exactly what he wants and I get nothing” and said he did not read it as an attempt to settle.
He added that he did not believe “the mere fact that a letter is labelled ‘without prejudice’ makes it confidential”.
“There was nothing in this letter that was confidential,” he told the panel. “The idea that it was improper to refer to it seemed indefensible.
“If made by someone worth less than £100m I would not have taken it seriously for a millisecond but I had to take it seriously.”
He said he was “concerned” about financial consequences.
On 19 July 2022, Hurst also sent a letter to Mr Neidle which was headed “private and confidential” and marked “not for publication”.
The letter said: “Please also do not misrepresent the nature of this letter. It is not a threat to sue for libel. It is a request that you reconsider what you have published and adopt a fair and balanced approach to your investigations.”
Neidle labelled the letter “weak” and told the hearing that he concluded Mr Zahawi was “bluffing” after receiving it.
He said that “if you are facing someone with £100m and sufficient political incentive” you “have to worry about the prospect that they would bring legal action” no matter how weak their case might be.
“It was only when I concluded that he could not afford to bring legal action because it would be a calamity for him that the threat went away,” Neidle added.
Email was ‘implicit defamation threat’
David Price KC, for the SRA, said in written argument that the email Hurst sent Neidle implicitly threatened a defamation claim.
“The Chancellor of the Exchequer is one of the four Great Offices of State,” Price said. “Defamation claims by holders of these offices are extremely rare.
“The Chancellor has ultimate responsibility for HMRC and for ensuring that taxpayers are not avoiding taxes by, among other ways, the use of offshore structures, especially when tax burdens are high for those who cannot afford to put such structures in place.
“Any tax avoidance of this kind and/or related HMRC investigation is fundamentally incompatible with the office of Chancellor.
“The fact that Nadhim Zahawi was threatening a defamation claim in relation to an allegation of multimillion-pound tax avoidance is itself a matter of strong public interest.”
Price said the warnings in the email that Neidle is not entitled to publish or refer to the correspondence, and that that would be a serious matter, “sought to prevent any scrutiny of Nadhim Zahawi’s decision to threaten the defamation claim, potentially indefinitely”.
Hurst denies the allegations against him.
Ben Hubble KC, for Hurst, said in written submissions: “Mr Hurst acted appropriately at all times”.
Hubble also said the case does not bear “any of the hallmarks of a SLAPP (strategic lawsuit against public participation)” – a legal action that aims to harass, intimidate and financially and psychologically exhaust the other party in relation to matters of public interest.
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