UK laws abetting organized crime

TALLINN - Organized criminals, businessmen and politicians, particularly from Eastern Europe, are heading to the UK courts to file libel cases to punish and scare off journalists who ask too many awkward questions, and this is beginning to threaten the very existence of publications in the East that engage in investigative journalism, reports LETA. English and Welsh courts, where the burden of proof is borne by the accused rather than the complainant, have become the jurisdiction of choice for oligarchs and organized criminal groups.

Under UK law, the journalist is guilty until proven innocent, claims a report by the editor with the Center for Investigative Reporting in Bosnia-Herzegovina (CIN), Drew Sullivan. “By publishing online, a media organization faces the risk of libel and defamation suits in just about every jurisdiction in the world,” says the report. “[The UK’s] plaintiff-friendly laws, high defamation awards, strong willingness of British courts to accept jurisdiction, and the exorbitant cost of legal fees make the United Kingdom perfect for oligarchs, organized crime figures, and wealthy businessmen.”

Ireland and France too are increasingly popular stopovers on the libel tourism trail, although Paris is attractive not because of the size of the awards (which are capped at 12,000 euros), but because libel is still considered a criminal case. “From press accounts and parliamentary testimony, we know that in the UK there are even lawyers who will read the newspapers just to identify possible cases, call the people involved and suggest a suit in order to drum up business,” said Sullivan. “It’s a sort of libel ambulance chasing.”

One example, from June 2008, shows Ukrainian billionaire Rinat Akhmetov suing Ukraine’s Kyiv Post newspaper and Obozrevatel, a news Web site, over stories about him, reports news portal bbn.ee. The Kyiv Post had only about 100 subscribers in Britain, but its worries about the likelihood of losing the case were such that the Post quickly settled and apologized. Obozrevatel, which had almost no visitors from the UK and published only in the Ukrainian language, could not afford to defend itself so Akhmetov easily won a default judgment of 44,000 euros.

Sullivan’s own civil society ‘start-up’ at the CIN, the Organized Crime and Corruption Reporting Project, regularly feels the heat from the subjects of its investigations, requiring the publication to have a British lawyer kept on retainer. “For our work, we are investigating organized crime figures, politicians, businessmen of fairly high standing in the community. In the 1990s in Russia, say, they would just send some guys to beat us up, but this is a bit harder to do now, so they are using the legal route to do basically the same thing. It’s been very effective in Eastern Europe.”

He said that the OCCRP is considering shutting off access to the UK to put an end to the lawsuits. “We have maybe two percent of our readership there, but the UK is causing 97 percent of our risk.”
Media lawyer Mark Stephens, who specializes in battling the libel ‘tourists,’ explains that things “really started off [in the 1950s], with Liberace suing over accusations that he was a homosexual, which he won. This opened the floodgates to a large number of celebrities doing the same thing, for many years. This died away more recently when they began to realize that it was cheaper and more effective to spend a million on a PR man than a team of lawyers, and with much less reputational damage.”

He continues that “The claimant lawyers then moved on to Russian oligarchs, Gulf billionaires, multinationals and heads of totalitarian states, making London in recent years the libel capital of the world.”
But the problem is not limited to the East, he says. In 2007, the Icelandic investment bank Kaupthing sued Ekstra Bladet, a Danish newspaper, after a reporter wrote articles critical of the bank’s handling of tax shelters for the wealthy. While Ekstra Bladet stories were republished in English on a Danish Web site that gets few or no visitors from the UK, British courts accepted jurisdiction after the bank argued that London was a major banking center, and Kaupthing’s chief executive resided in Britain. Fearing the huge costs of the case, the paper sought a settlement from the beginning and eventually paid Kaupthing’s legal fees and additional damages, along with an apology.

In December 2009, Kaupthing, one of the institutions at the heart of the collapse of the Icelandic economy, nevertheless became the subject of an investigation by the UK’s Serious Fraud Office into the bank’s practices.