How loud, and when, should lawyers be shouting about the rule of

law?

Master’s lecture, City of London Solicitors’ Company, 5 June 2023

Dan Neidle
When lawyer friends heard I was being asked to give a lecture about the rule of law, they
had two reactions. Half of them said: “you should read Tom Bingham”. The other half said:
“you pretentious git”. Both were good advice.

I’m not a legal philosopher. Unlike many of you, I never studied the theory of law. I studied
physics as an undergraduate and then did a law conversion. Which is an aside, by way of an
excuse, that I am not going be talking very much about the theory of the rule of law.

That traditional discussion of the rule of law has been focused on the power of the executive
to usurp the legal system.

In the 19th century, Dicey worried about arbitrary exercise of authority by officials.

In the 1920s Lord Hewart worried about statutes that gave absolute unchallengeable
discretion to ministers.

In the 1970s, Lord Hailsham worried about the practical subservience of parliament to the
executive, and that this created an elective dictatorship for a government elected on a
minority of the vote

Tom Bingham’s excellent book is on the same theme. These issues are hugely significant, and
sometimes vitally important to the entire future of the UK. Let’s call them “macro” rule of
law problems.

And I’m not going to discuss them.

I am interested in much more mundane matters.

My concern is that there are areas of law in which legal rights and liabilities are resolved by
arbitrary acts – not of the executive, but of lawyers. Let’s call these “micro” rule of law
problems.

That will be my focus. How I think the rule of law is usually strengthened by the day-to-day
behaviour of lawyers, but sometimes imperilled by it. And that the key differences between
these two cases are the incentives applying to the individual lawyers. The answer: change
the incentives.

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I’m going to talk in particular about three examples where I have personal experience,
where I feel lawyers have damaged, even perverted, the rule of law:

• Libel law.
• The Post Office scandal.
• And KCs providing opinions on tax avoidance schemes.

I’m sure there are others, but these are where I have some personal experience, and that’s
where I’ll focus.

And while the actions are on a micro level, compared to the British constitution and to grand
affairs of state, they are where the boring, day-to-day actions of lawyers have cost the
country millions of pounds, silenced criticism of the powerful, and destroyed thousands of
lives.

Before I talk about where lawyers have failed, I want to talk about where lawyers succeed.
The largely unsung role of lawyers, in the cynical, everyday world of commercial practice, of
upholding the role of law, and why it is they do that.

Only then can we identify where lawyers fail, why they fail, and how to stop it.

When I was in practice, the staple diet of the tax lawyer was being called, often at antisocial
hours, by a colleague somewhere in the world, trying to close complicated transaction and
who has realised – at the last minute – that someone is demanding a UK tax opinion before
the deal will close.

There could easily be billions of dollars riding on the deal, but it can now only close if the tax
lawyer says the tax works. For extra fun and games, the deal has to close within x hours or
the deal is off. Forever. And for bonus points, the poor tax lawyer didn’t have the slightest
idea the transaction existed before being woken up at 4am by a call from Dubai.

At this point, the easiest thing in the world is for the tax lawyer to give it a quick look, say
the transaction is fine and that the tax opinion can be given. Then go back to bed.

They will be beloved by their colleagues, and by the client. The firm will, of course, be paid a
large amount of fees, some of which will be allocated to the tax department. And probably
everything is technically fine. And the lawyer will get some sleep.

If by some freakish chance there is a tax problem that the lawyer’s quick look missed, the
chance of HMRC ever finding it is infinitesimally small. HMRC don’t have the time, resources
or inclination to hunt through random international deals for obscure technical points – ones
so obscure that they were missed by the tax lawyer’s quick review.

On the other hand, if the lawyer devotes serious brainpower to the tax analysis, and spends
time looking at it, holding everything up, they are likely to be unpopular. But that is as
nothing compared to what will happen if they find that there is in fact a subtle tax problem
with the transaction which would have been trivial to remedy two months ago, but now, in

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the early hours of the morning, means that the transaction cannot happen. Everything will
then turn to chocolate.

The other side will blame the client. The client will blame the lawyer’s firm. And everyone
will blame the tax lawyer. Potentially millions of fees owed to the firm will not be paid. They
will not be instructed again by anyone involved.

The lawyer was, in the lingo, “uncommercial” because he or she was taking a technical view
on a legal point which is in practice a non-issue.

So what will the tax lawyer do? In my experience, without fail, they will do the full analysis
and call out the transaction if it doesn’t work.

Why?

I worked as a tax lawyer for almost 25 years.

I loved my job. A few journalists have described me as someone who changed sides, or even
that I’m a whistleblower.

Actually, I don’t think I took a single position as a tax lawyer I’m ashamed of now. I don’t
want this to be a party political broadcast on behalf of the Clifford Chance party, but the tax
partners who trained me were, brilliant, technical lawyers, but also focused on doing the
right thing. The slightest element of impropriety, and they were very clear: we must run, not
walk, in the opposite direction. We must never say the law says x, when in fact it says y,
regardless of how inconvenient that may be to the client and regardless of the commercial
pressure on us.

Again, why?

Let’s dismiss the explanation that my hypothetical 3am tax lawyer is a saint, with an almost
fanatical devotion to the rule of law. I can assure you that the Clifford Chance partnership is
not made up of saints.

Nor are these people who have some rare psychological condition which makes them unable
to permit a law to be broken, even if it falls in a forest so large that it does not make a sound.

I think the explanation isn’t found in legal theory, but in economics 101.

it’s all about the incentives.

If our tax lawyer makes a fuss about a tax problem that could sink the deal, then there is a
large, very obvious and very immediate downside

But tax lawyers are cautious creatures who think in the long-term. The client who is
desperate to ignore the legal hiccup today, would view things completely differently if, in five
years’ time that same legal hiccup results in a tax catastrophe.

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Then there’s that ineffable thing called “culture”. Lawyers are social animals.

Our tax lawyer is surrounded by other tax lawyers who spend their time on technical points
that normal people may regard as obscure or irrelevant. Those tax lawyers will probably
admire the tax lawyer for sticking their heels in.

On the other hand, they’d be appalled if they thought our tax lawyer deliberately overlooked
the point in the interests of convenience. And the most likely people to eventually spot the
mistake, are not HMRC, it’s her colleagues, and other tax lawyers, looking at the same
transaction for some other reason, at some later date.

Or, if you’re more cynical, if people stop taking irrelevant, technical points seriously, then tax
lawyers become a lot less important. And less well paid.

Either way, I conclude that here the rule of law isn’t upheld by a single saintly tax lawyer, but
by a rational human being operating under very real incentives. The positive incentives that
their career only exists because of insane technical points. And the negative incentive that if
they make mistakes, bad things will happen.

I ran a draft of this speech past an eminent professor of law, and he scoffed at this. Those
potential costs of ignoring the law? He thought them far too remote to affect the lawyer’s
incentives. But the funny thing is, that in practice they do. I felt it powerfully myself.

The vital thing is that these costs, and these incentives are – happily – aligned with
upholding the rule of law on a boring “micro”, day-to-day basis.

And this selfishly saintly behaviour is of course not limited to tax law. In my time in practice, I
would, almost every day, see lawyers gently restraining their clients’ desire to ignore
“inconvenient” legal results.

Anyway, what I learned as a trainee was that the difference between a “commercial” and
“uncommercial” lawyer was not that the commercial lawyer accedes to clients breaking the
law. It’s that the commercial lawyer can break the news to the client in a way which is
palatable and come up with solutions more quickly than the client can lose their patience.

That is what a “commercial” lawyer should be, and what I believe most “commercial”
lawyers are. A lawyer who facilitates the breaking of law by a client is not really
“commercial” – any more than Saul Goodman is commercial.

So, I don’t think enough is made of the vital – boring – role in upholding the rule of law that
is undertaken by selfishly –saintly – commercial lawyers. And, to be fair, often accountants
and others as well.

Regulators, company registrars, environmental agencies, and the tax authorities, see a tiny
fraction of what companies do on a day-to-day basis. Mostly, these companies fully comply
with the law. The reason they do that is because of the lawyers advising them. Even when –

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particularly when – it becomes commercially imperative in the minds of the business for an
inconvenient law to be ignored.

So this is my general view of how lawyers advise. We don’t need good people. We need
good incentives. Then, even the worst, cynical, selfish lawyer may behave like a good lawyer.
Even a Saul Goodman.

Like all general rules, it has exceptions, and the exceptions are interesting.

If I’m right about the role of incentives, then lawyer behaviour will worsen, and the rule of
law would put at risk, where incentives like those I’ve just described do not exist.

Where a lawyer’s mistake will not come back to bite them in the form of disappointed
colleagues, or an angry client. Where the lawyer’s economic interest pushes them to
overlook lawbreaking, or even to facilitate it.

And where other lawyers, colleagues and the surrounding culture will not restrain them.

At that point, a bad person will be entirely enabled to be a bad lawyer. What’s much worse,
is that a good person may, and perhaps will, find themselves becoming a bad lawyer.

One obvious place where the incentives are different is litigation.

Now I need to say at this point that my personal experience of litigation was rather special.
Tax litigation is different. You are not opposing an equal party, you’re opposing a state, with
a playing field that is decidedly unbalanced one way in terms of immediate resources (we
have more), another way in terms of long-term resources (the state obviously has rather
more), and yet another way in terms of the rules, under which the litigation will be fought
(HMRC has numerous very serious structural advantages).

You also have the complexity of the client and the lawyers all having an ongoing relationship
with HMRC that cannot end – much as the client might like it to. So, I need to be careful not
to extrapolate my experience of tax litigation to the wider litigation world.

Despite that large caveat, I nevertheless believe that incentives for lawyers to further the
rule of law, and not subvert it, are inevitably weaker in litigation.

If you run meritless points in litigation, it is probably unlikely to render you negligent to your
client, particularly if – as a wise lawyer should – you tell the client it’s a bit of a try-on.
Similarly, if you intentionally break rules on disclosure –- very bad behaviour indeed – your
client may applaud rather than berate you.

And the standard view of a lawyer is as a “zealous advocate” for their client’s position. The
“duty of partisanship” as they rather cutely put it in the US.

In principle, it’s subject to our ethical obligations. But the SRA understandably has limited
resources and can’t be looking over every lawyer’s shoulder.

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So, in theory, some of the practical restraints on the behaviour of a transactional lawyer will
not bind a litigator.

But.

You do face the scrutiny of the courts.

That will be some distance in the future – but it remains real, with practical and reputational
consequences for behaviour which in retrospect may be judged unacceptable. Lawyers don’t
break disclosure rules. Clients may accidentally drop phones in the ocean; lawyers tend not
to.

So, I would say that the incentives enforcing good behaviour are weaker in litigation
scenarios, but still somewhat constrained. I know some litigators who experienced these
constraints at first hand, and they did not enjoy the experience.

So, on this view the rule of law may be somewhat stressed in litigation, but will actually
become imperilled only in litigation scenarios where lawyers are not worried about the
scrutiny of the courts.

I am going to focus today on three particular scenarios where lawyers were indeed not
worried about the scrutiny of the courts, and that had, and continues to have, very bad
consequences.

You probably won’t be surprised to hear that the first scenario involves defamation law.

I’d never been much interested in defamation law, until defamation law suddenly became
interested in me.

And then, one sunny day last July, it hit me with an awful clarity: the problem with
defamation law isn’t the law. It’s the maths.

What I mean by this is: let’s say a wealthy man accuses me of defamation and demands that
I retract. I am sure I am right. But I’m equally sure that he will pursue the matter to court.

My best case scenario? I win, and recover perhaps two-thirds of my legal costs, leaving me
at least £100,000 out of pocket – and I would have lost months of my life fighting the case.

My worst case scenario? I lose, waste months of my life on it, I have to pay all my legal fees,
two-thirds of his legal fees, and damages – a bill that could easily exceed £1 million.

Now I think I’m right, but it would be naïve to think that rightness guarantees a win in court.
So, I can’t discount that £1 million scenario. Perhaps financial ruin.

There is sadly only one rational course of action for me to take, and that is to retract.

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That’s certainly true if I’m a small-time blogger. I won’t feel able to spend even £1000 on
legal advice, much less six-figure sums.

It’s also true if I’m working for a large media corporation. I as an individual journalist may be
convinced of the justness of my cause and want to fight it, but it would take an unusually
principled editor and owner to want to defy what I would describe as the inexorable
mathematics of libel.

Now legal cost awards are of course not unique to defamation.

Defamation is somewhat unusual in the fact that legal costs can easily be ten times the
damages claimed. Over 30 times, in the Cadwalladr case.

But what is more unusual – even unique to defamation - is that some of the cases with the
strongest public interest will involve extremely wealthy claimants and impecunious
defendants.

Fear of costs is, in commercial litigation, a good thing. It discourages frivolous litigation and
encourages settlement. But in the context of a defamation claim – when the claimant is very
wealthy, and can litigate frivolously, and the defendant is not, and cannot, in my view it rises
to a threat to the rule of law.

At this point, you might be wondering if I have rebutted my own argument. You might ask
why, if the only rational move is to capitulate, I did not capitulate to Mr Zahawi.

One possibility – and you shouldn’t discount it – is that I’m not rational.

Another is that I have an unhealthy love of litigation. You certainly shouldn’t discount that.

And yet another is that I had probably the largest legal and tax team I’d ever worked with,
supporting me for free. The mathematics favoured Zahawi less than he thought.

But no – the real reason is that I was certain in my mind that Mr Zahawi was bluffing, and
that, in reality, he would never run the risk of providing disclosure of his tax affairs, and then
being cross-examined on those tax affairs. (I had no idea quite how much he was bluffing)

The point is that the Zahawi scenario was unusual. I was a particularly bad person to sue,
and he was a particularly bad claimant. No serious analysis of libel law should take my case
as typical.

In the typical case, the mathematics of libel law are a serious problem. And a threat to the
rule of law for two reasons.

First, because a dispute is being resolved not by law at all but by the power of money.

Second, because the lawyers writing the legal threat will fully understand that they are
creating an incentive to capitulate. And if the defendant turns out to be tougher than

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expected, they will simply stop sending letters. The prospect of future court oversight is
therefore exceedingly dim. They have every incentive to go past what is proper and nothing
holding them back.

The absolute epitome of this was Yevgeniy Prigozhin’s 2021 libel claim against Eliot Higgins,
the investigative journalist. Higgins had said that Prigozhin was the founder and leader of
the Wagner group. Prigozhin’s lawyers, Discreet Law, filed a defamation claim saying this was
untrue. That was a surprising claim given that there had been extensive reporting of the
links between Prigozhin and Wagner, detailed hearings on the subject in front of the US
House of Representatives, and that Prigozhin had been sanctioned by the US and UK for his
links with Wagner. On what basis could a lawyer send a letter asserting the contrary?

The Prigozhin case was an example of lawyers relaying a lie, which they should have known
was a lie. When lawyers use the force of law to try to silence someone, and it’s based on a
lie, then that is absolutely a threat to the rule of law.

Not a constitutional crisis – a “macro” threat. But a micro threat to the rule of law which, if
the client is a powerful figure, may be rather more than micro.

There is another way in which, until recently, almost all claimant libel lawyers would lie. In
almost every case.

I remember back at law school, our first land law lecture, being told about the “wooden lie”
– “trespassers will be prosecuted”. No, they won’t, because trespassing isn’t a criminal
offence.

Libel lawyers indulged in the “paper lie”. Sending libel letters demanding retractions, headed
“confidential” and “without prejudice”, and with dire strictures warning against publication.
These claims were almost always false.

I experienced the “paper lie” first hand. Osborne Clarke, Zahawi’s lawyers, wrote me a letter
which purported to be “without prejudice” and confidential. To make matters worse, they
said it would be a “very serious matter” if I published it.

Well, wishing something to be confidential, doesn’t make it confidential. “Without

prejudice” is a rule of evidence for settlement discussions, not a rule of confidentiality. And a
demand to retract an allegation is not a settlement offer.

So, I published the letter. And it was a serious matter – but only for Zahawi and Osborne
Clarke.

What I didn’t understand at the time, is how common this “paper lie” was. It appears to
have been absolutely standard practice in the libel world.

I heard from over a dozen people who had blogged or tweeted about the wealthy and
powerful, and received correspondence ordering them to retract their statements. And this
correspondence stated that it was confidential and could not be published. Now, these

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individuals did not have the legal background to know that this claim was false. They did not
have the resources to hire a defamation lawyer. In fact, they assumed that, if a lawyer said it,
it must be true. So, their response had simply been to delete their comments.

Thus, a lie about the legal status of a letter succeeded in overcoming someone's freedom of
speech. Lawyers achieved a pseudo-legal result by deceiving unrepresented individuals
about the law. No concept of zealous advocacy should cover that.

You would think the “paper lie” would be less effective when sent to a newspaper, with in-
house lawyers, and the resources to afford capable external lawyers. But strangely, that‘s not
entirely the case.

I spoke to several in-house lawyers at major media organisation, who told me that whilst
they accepted that these claims of confidentiality were probably false, they did not feel it
was prudent for the newspaper to run the risk of breaching confidentiality and publishing
the letters. In-house lawyers have their own incentives, and risk may be more important to
them than high principles. Commercial media organisations certainly have their own
incentives, and are not immune from the mathematics of libel.

The effect of the "paper lie" is, therefore to subvert the rule of law, and achieve a pseudo-
legal result in the shadows, with no public scrutiny of how the law is being applied.

Why did the claimant lawyers lie?

That’s obvious. Because it is a highly successful strategy. It maximised the likelihood of

retraction, particularly by an unrepresented individual. It minimised the risk of the so-called
“Streisand effect” – that the attempt to seek of attraction becomes widely publicised, and
draws more publicity to the original allegation.

The tiny downside that it involved an untruth likely played no role in the lawyers’ thinking,
because that untruth would attract no sanction, and likely never be remarked upon.

Incentives to lie. No incentives not to lie.

The Solicitors Regulation Authority has now made clear that It is not acceptable to claim a
letter is confidential or “without prejudice” unless it really is. That is great – but, of itself, is
unlikely to change behaviour.

I understand many libel lawyers are continuing merrily, exactly as before, but with a covering
file note, which executes an intricate limbo dance to establish some semblance of an
argument that the letter really is confidential.

No, changing behaviour requires changing incentives. That requires the SRA to pursue
sanctions against lawyers who adopt so unethical an approach.

And it has to mean changing the mathematics of libel law. I’ll talk about how later.

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The Post Office

Most of you will know the details of the Post Office scandal.

The essence is this: In the 2000s, the Post Office falsely accused thousands of postmasters of
theft. 900 were prosecuted. 700 were convicted. Those that weren’t prosecuted were forced
to return the money they had “stolen” – which they hadn’t actually stolen at all.

Many had their assets seized and their reputations shredded.

Marriages and livelihoods were destroyed, and at least 61 have now died, most never
receiving an apology or recompense.

These prosecutions were on the basis of financial discrepancies reported by a computer

accounting system called Horizon. The Post Office knew from the start that there were
serious problems with the Horizon system, but I think it’s clear they covered it up, and
proceeded with aggressive prosecutions based on unreliable data.

It gets worse. Prosecutions ended in 2013, probably because the Post Office couldn’t find
any expert willing to testify that Horizon was robust. But as late as 2015, the CEO of the Post
Office told a Parliamentary Select Committee and a Government Minister that there was no
evidence of miscarriages of justice.

It gets worse. The Post Office then spent years fighting compensation claims in the courts,
using every trick in the book to draw things out as long as possible. At one point they filed a
completely meritless application for Mr Justice Fraser to recuse himself on the basis he was
biased. They then appealed the recusal to the Court of Appeal, which was deeply unamused,
describing the arguments as "without substance", "fatally flawed" and "absurd".

The Post Office did this, I’m convinced, to to exhaust the resources of the postmasters
making the claims, and the terrible thing is that they succeeded. The postmasters received
next-to-nothing.

It gets worse. Finally, there are compensation schemes which should be fully compensating
the postmasters for their loss. But the largest scheme has been designed in such a way that
unrepresented elderly and vulnerable postmasters are required to complete lengthy legal
documentation just to start the claim. One was so confused that he submitted a claim for
£15.75.

And worse. When the post office considered a compensation application, and sent an offer
to a postmaster, it claimed the offer was “without prejudice” and therefore confidential, and
could not be shared with anyone except a lawyer.

It’s the “paper lie” again. Inaccurate, misleading, untrue. And it did real damage.

Because 90% of the postmasters receiving these offers didn’t have a lawyer. They weren’t
able to compare compensation terms with each other. They weren’t able to speak to family

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or friends (who might have suggested they speak to a lawyer). They weren’t able to speak to
their union or the postmasters’ campaign. And they weren’t able to go public about the way
they were being treated.

Now, this is probably the most obvious point I will ever make in my life, but it is an affront to
the rule of law that a company owned by the state proceeded with hundreds of false
prosecutions and thousands of false allegations, destroyed peoples’ lives, covered it up,
cynically abused the court process and to this day resists paying full compensation.

And nobody has been held accountable. Not one executive. Not one lawyer.

Professor Richard Moorhead of Exeter University has written extensively about the actions
of the lawyers involved. And it’s something the Sir Wyn Williams Inquiry will focus on.

Two things seem clear.

First, everyone involved at the Post Office seems to have been caught up in what was either
a criminal conspiracy or a collective delusion – some kind of disastrous folie à deux. I don’t
know which. Possibly a mixture of the two.

And it also seems clear that none of the lawyers involved – at the Post Office, their external
law firms or the QCs they engaged – demonstrated the proper independence. Instead,
objectively (as a good Marxist would say) they became part of the conspiracy.

A big question: how do we change the incentives to prevent lawyers ever acting that way
again? I’ll return to that last.

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Tax avoidance

For my final example, I’m afraid I’m going to turn back where I started, with tax law.

Back in the day, tax avoidance schemes were intricately lawyered creations of Talmudic
beauty, full of dubious morals but remarkable legal rigour.

Today, they are very much not. 2023’s tax avoidance schemes are really no more than scams.
Feeble legal arguments that wouldn’t survive 30 seconds in a tax tribunal.

So why do punters buy these schemes? A key element is a “KC opinion”.

Some “tax boutique” – normally neither lawyers, nor regulated accountants – comes up with
a scheme. They approach a KC for an opinion the scheme works. The KC says it does; as they
knew he would because this is not their first rodeo.

Armed with the KC’s opinion, the promoter goes to taxpayers to flog the scheme. They’re
confident the scheme works, because – after all – it’s blessed by an independent KC.

How does this play out?

Let’s say – hypothetically – the scheme is a pile of junk. In that case, HMRC pursues the
taxpayers for the tax, plus interest and penalties. The promoters get to keep their fee and
will likely wind up their company and perhaps even move abroad. So good luck to any
taxpayers trying to recover their loss.

No taxpayer can sue the KC because the taxpayers were not the KC’s client.

And HMRC certainly wasn’t the KC’s client, so have no prospect of suing him.

So here’s how the incentives work in this case. If the KC says the scheme doesn’t work, he
won’t get paid and will get no more instructions from these promoters. If he says the
scheme works and he’s wrong – and he almost always will be wrong – then he still gets his
fee, and there is zero prospect of it coming back to bite him.

What kind of KC opinions do you think will emerge from these incentives?

Well, I have one here. This is an opinion from █████ █████ KC on a tax avoidance
scheme so blatant, and so doomed, that it took my breath away. Concerning a “scheme”
that was, in HMRC’s view and mine, in reality a fraud. Did █████ know that? I don’t know
if he knew about the precise way in which the structure was implemented but in my view he
should have seen what, to me, were obvious fraud red flags. And, as a tax technical matter,
his opinion had several elements which I find impossible to understand.

I’m awaiting comment on this from Mr █████. When I get it, unless he can demonstrate I
am mistaken I will be publicly naming him and publishing the full text of his opinion,
together with our analysis as to why I think it was so outrageous.

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I can’t believe he knew the implementation of the scheme would be fraudulent but, given it
was, his opinion is not privileged and I believe there is a clear public interest in publishing it.

So: this is an example of a lawyer, failing the critical test of independence, which the rule of
law requires. In this case I believe the scheme cost the country £50m. The promoters are
long gone – the scheme was in 2016. And HMRC have no practical recourse against █████.

The █████ opinion is now history. But I know for a fact that opinions like this continue to
be issued today by a variety of KCs. The incentives are wrong, and we need to fix that.

So: three very different examples. All involving behaviour by lawyers that I regard as
unethical. All of which subverted the rule of law, by replacing the correct application of law
by a court, with the incorrect application of law by a lawyer, in circumstances where they
thought no court would ever become involved.

And all, I think, are down to bad incentives. We can’t fix them by hoping that people change.
We can only fix them by changing the incentives.

I have three tentative suggestions.

Let’s start with libel.

We need to end the inexorable mathematics of libel law so that it’s rational for defendants
to stand their ground.

There are many ways that we could reform libel law in a modern and sustainable way. We
could introduce an American-style rule: Public figures can only sue for defamation where
they can establish malice on the part of the writer.

We could reverse the burden of proof, so claimants need to demonstrate the falsehood of an
allegation. One libel lawyer said to me – “but that would create a really serious barrier to
libel claims”. Yes.

Or, and this is my favoured approach, we could enact the proposal of the writer and
journalist, Edward Lucas and create a form of informal small claims court for defamation
cases, where lawyers were not expected to attend, there would be no legal costs coverage.
The usual outcome would be a requirement to apologise, with damages only awarded in
unusual cases. Michelle Stanistreet, the head of the National Union of Journalist, has also
talked about “low-cost arbitration solutions”.

But I freely concede, all of this would be complicated and require significant thought and
parliamentary time.

So, I have a much simpler fix, involving one line of legislation: to cap any award of costs for
defamation actions at £25,000 – or the amount of damages actually awarded if lower.

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Let’s change the mathematics of libel threats, so that a rational defendant can stand and
fight. And so a rational claimant may think twice about picking that fight.

And what about the tax advisers?

One answer is regulation. I’m unconvinced.

I’d favour a different approach. A statutory standard for tax advice.

How about this for drafting?

A tax practitioner must base all written advice on reasonable factual and legal
assumptions, and consider all relevant facts that the practitioner knows or should
know.

It's rather brilliant.

It’s not written by me – it’s from Circular 230 of the IRS, in the United States.

Copying it not even my idea. An obscure barrister called Jolyon Maugham, who none of you
will have heard of, wrote about this almost ten years ago. Nothing has changed. But it could.

We could enact a rule like Circular 230 here, with HMRC and clients – direct and indirect –
empowered to apply to a tax tribunal for penalties if a barrister, solicitor, accountant or
indeed anyone purporting to be a tax adviser fails to meet the standard. With penalties
geared to the amount of tax at stake.

And, so the rule can be applied, we should expand the existing crime-fraud exception to
legal privilege. So it also applies to tax avoidance schemes that fail the “double
reasonableness test” – meaning that no reasonable person would regard them as a
reasonable course of action. Irresponsible KC opinions currently hide being privilege, and
that should end.

All of this would change the incentives. Create some downside. And end the well-
remunerated whitewashing of bad law by King’s Counsel.

And then the Post Office

Here we need to change the incentives so nothing like this ever happens again, and
demonstrate to everybody the consequences of so horrifying an abuse of the legal system.

That means three things:

• Prosecutions for those involved at the Post Office and Fujitsu, right up to board level.

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 • The Post Office itself should be prosecuted as a corporate.

• Where criminal liability cannot be established, the government require the Post
Office to sue its previous executives for negligence, given the stupendous losses
which their actions caused the Post Office. The word “negligent” feels inadequate.

The lawyers involved should face the most serious sanctions, including striking off.

This needs an extreme degree of focus by the prosecuting authorities because the Post
Office scandal is I think the single greatest challenge to the rule of law this country has
faced. A government-owned company using the legal system to destroy lives, doing so on
the basis of lies and deception and covering up its wrongdoing for a decade.

And then the Post Office should itself suffer the ultimate penalty, and be ended in its current
form. No privately owned business would ever have survived this, and it’s wrong that the
Post Office’s current status means that it has.

The business we all know and rely on should be given to past, current and future
postmasters, and run as a mutual, with continuing government support where necessary.
The remainder of the business should continue for the sole purpose of compensating
postmasters.

A price needs to be put on malfeasance on this appalling scale, and that price should be
high.

So those are my tentative conclusions for the future.

As for now, very few of us will ever be involved in upholding the rule of law on a
constitutional level.

All of us have a role in upholding in the rule of law on a boring, micro, day-to-day level. And
I’m convinced almost all of us do that – not because we are saints, but because we are
fortunate enough to operate in an environment where the personal, cultural and financial
incentives push us to do the right thing. What we can do is look out for areas of the law
where the incentives are broken and that behaviour is rewarded.

Finding those areas is easy.

Fixing the incentives is hard.

But I think we should try.

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