New SRA Guidance on Sham Litigation

Last month the SRA published new Guidance on sham litigation. You will find it here.

The Guidance explains what the SRA mean by the term ‘sham litigation’ and the tell-tale signs of it, including:

• unusual client information
• unusual or unexpected knowledge of law firm processes
• geographical distance from the firm’s office
• unsolicited contact
• unusual payment preferences
• clients chasing old debts; and
• irregular appointment attendance

Litigation is not within the ambit of the anti-money laundering rules, but there are broad parallels in the fabrication of disputes, followed by judgement or award, followed by payment through a solicitor’s client account.

The Guidance gives the example of Ms Nina Tiara, who fabricated disputes with her brother, and who was convicted and sentenced to imprisonment. She is perhaps better known as the country’s most notorious retail refunds thief, stealing stock and then obtaining a fake refund.

The Henry Jackson Society (a charity devoted to advancing democracy and human rights) has long cautioned about Russian influence in the UK – for example, see Russian influence and undermining European judicial systems. However, beyond this, examples of sham litigation are difficult to find. I am unaware of any statistics on sham litigation in the English courts. In family law, sham marriage or sham civil partnerships are a known and recognised risk.

In my experience, civil litigation lawyers are highly aware of the dangers in sham litigation and ask appropriate (and searching) questions. They know what to look for. However the SRA appears to consider this a sufficiently dangerous area for Guidance.