‘Libel tourism’ knocked back by UK court
Wednesday, October 16, 2013 at 1:18AM
Richard L. Cassin in Hermitage Capital, Hermitage Capital Management, Magnitsky Act, Pavel Karpov, Russia, Sergei Magnitsky, William Browder

Two rulings Monday from the U.K. High Court will make it harder for foreign litigants to use libel tourism -- a practice known to pose a serious threat to press freedom and free speech far beyond Britain.

The High Court dismissed a libel suit against William Browder and his company brought by a former Russian police officer. Browder, left, a U.K. citizen who lives in London, had accused Pavel Karpov of being one of several corrupt officials complicit in the detention and death of Sergei Magnitsky, a Russian lawyer who worked in Moscow for Browder and his company, Hermitage Capital Management.

Judge Peregrine Simon said Karpov had insufficient links to the U.K. ‘There is a degree of artificiality about his seeking to protect his reputation in this country,’ the judge said.

A second libel case unrelated to Browder's was also thrown out by the High Court Monday. Serbian tobacco tycoon Stanko Subotic had sued banker Ratko Knezevic for libel. Knezevic had accused Subotic of murder, drug smuggling, and undergoing plastic surgery to hide his identify. Only one copy of the newspaper that carried the allegations, Politika, was found in Britain.

The court ruled that Subotic had suffered no damage in England even though there had been ‘minimal’ internet publication.

Libel tourism became widely known and feared after American writer Rachel Ehrenfeld was ordered to pay damages of £30,000 to a Saudi businessman she accused of funding terrorism. Only 23 copies of her offending book were sold in Britian, all through internet sales.

(A well-known white collar crime expert warned the FCPA Blog a few years ago about libel tourism; she said the practice was having a noticeable chilling effect on journalists and academics.)

In response to the Ehrenfeld judgment, the United States enacted a free-speech law in 2010 barring U.S. federal courts from enforcing libel judgments issued in foreign courts against U.S. residents, if the speech would not be libelous under American law. California enacted a law against libel tourism law in 2009; New York, Illinois, and Florida have adopted similar laws.

After his court victory Monday, Browder, who has led a global campaign to hold Russian officials accountable for Magnitsky's death, said: ‘I think this is a precedent-setting case. If you are a dubious foreign character, this precedent makes it much less likely you will succeed in the libel courts.’

Magnitsky died in a Moscow jail in 2009 after a year in detention. He was held after uncovering evidence that Russian officials were behind a $230 million tax fraud against the Russian treasury. In detention, Magnitsky was denied medical care for pancreatitis and died at age 37.

Karpov, who sued Browder for libel, is among 18 Russians named by the United States under the Magnitsky Act, a U.S. law Browder lobbied for. It requires the State Department to deny visas to those involved in Magnitsky's death or who benefited from the crimes he uncovered. The law also gives the DOJ the power to seize property in the U.S. owned or controlled by those named.

Earlier this year, the U.K. Parliament moved to limit libel tourism. It enacted a law requiring plaintiffs who bring libel actions against defendants who live outside Europe to show that the U.K courts are the best forum for the case. The law requires claimants to show serious harm to their reputation. And it created a good-faith defense based on a belief the statement was in the public interest.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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