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In the course of acting for clients in civil disputes, clients sometimes ask their solicitor to consider using against an opponent the threat of what might be termed ‘collateral’ damage - for example, the prospect of the opponent facing a regulatory or even a criminal investigation if they do not agree to a settlement of the dispute in question.
One of the many ‘alarm bells’ rung by this issue concerns the risk that making such a threat could constitute the criminal offence of blackmail. In addition to regulatory concerns for a solicitor engaging in this conduct, the maximum penalty for anyone convicted of blackmail is 14 years' imprisonment.
Blackmail is a criminal offence contrary to section 21(1) of the Theft Act 1968. Without getting too technical, the defection concerns the making an “unwarranted demand with menaces”.
A “demand” is simply a request of any sort; “with menaces” means doing so in such a way that pressurises or influences the ‘target’ / recipient to give in to the demand unwillingly.
Although the offence of blackmail is a criminal law matter, the issue has come up in a number of recent civil court cases. In these cases, the court has been asked to consider whether threats made by lawyers are not only improper but might even be regarded as blackmail. Because these were civil court cases, rather than criminal trials for blackmail, the court declined to reach conclusions on whether criminal offences had been committed but the courts did sound very serious warnings for lawyers who are asked to impose pressure in this way.
In the 2019 case of SOJ –v- JAO [2019] Mr Justice Pepperall had to consider the scenario where A was paid $1,000,000 under a confidentiality agreement by which A was to keep confidential details of her sexual relationship with B. When B accused A of discussing those details in breach of the Agreement and demanded an injunction against A to enforce the Agreement, A’s lawyer was said to have sent out a warning to B that he might not be able to "hide behind" the settlement agreement and that he would face cross examination about his sexual history if he did proceed with his proposed legal action. In this case, the court considered that there may well be “a credible basis” for contending that B has been the victim of blackmail.
In the 2016 case of Ferster –v- Ferster, the Court of Appeal considered the situation where an offer to settle legal proceedings for £X was withdrawn by a Claimant’s solicitor and was replaced with a revised offer asking for payment of a much higher sum. The reason given for demanding a higher settlement amount was that the Claimant claimed to have discovered “wrongdoing” by the opponent, namely that the opponent had allegedly lied in earlier evidence. The threat was that unless the revised (higher) payment was agreed, the opponent would face likely criminal action, his livelihood would be destroyed as well as there being serious consequences for his partner.
Both the original judge and, on appeal, the Court of Appeal took the view in principle that the elements necessary to constitute blackmail were present.
The moral is that, whilst it may be tempting to threaten an opponent everything that you have against them, you need to be very careful that both you and your advisors do not inadvertently place yourselves in the dock.
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