New EU legislation targets strategic lawsuits seeking to curtail public participation

The Directive 2024/1069 of 11 April 2024 on protecting persons who engage in public participation from manifestly unfounded or abusive court proceedings (so-called “strategic lawsuits against public participation directive” or “SLAPPs Directive”; the “Directive”) was published in the Official Journal of the EU on 16 April 2024.

In the context of rising litigation seeking to curtail ESG activism (see our previous blog post), the Directive provides safeguards against manifestly unfounded claims or abusive court proceedings brought against natural and legal persons due to their involvement in public participation. This includes journalists, publishers, media organisations, whistleblowers and human rights defenders, as well as civil society organisations, NGOs, trade unions, artists, researchers and academics.

The Directive will enter into force twenty days after its publication, i.e. on 6 May 2024. EU Member States, including Ireland but excluding Denmark, will have to transpose the minimum requirements foreseen in the Directive into their national law within two years from the date of its entry into force, i.e. by 7 May 2026. The Directive will be applicable as from this date.

1.  Scope of application

The Directive provides specific protections, summarised in the next section, for persons engaged in public participation. More precisely, it applies to (i) abusive court proceedings (ii) in civil matters (iii) with cross-border implications (iv) against public participation (v) related to matters of public interest. We review these concepts sequentially.

1.1.  Public participation

“Public participation” is defined as the making of any statement or the carrying out of any activity by a natural or legal person in the exercise of fundamental rights such as freedom of expression and information, freedom of the arts and sciences, or freedom of assembly and association, and concerning a matter of current or future public interest. 

Public participation can also include activities related to the exercise of academic and artistic freedom, the right to freedom of association and peaceful assembly, including organising or participating in lobbying activities, demonstrations and protests or activities resulting from the right to good administration and the right to an effective remedy, such as litigation or involvement in public hearings. 

Public participation also includes preparatory, supportive or assisting actions that have a direct and inherent link to the statement or activity targeted by the Directive to suppress public participation (for example, legal actions against the internet platform where a journalist or human rights defenders publish their work or against the company that prints a text are also included). 

1.2  Matter of public interest

A “matter of public interest” includes any issue that affects the public to a degree that justifies public engagement, in areas such as: 

• fundamental rights, public health, safety, the environment or climate; 
• the activities of natural or legal persons that are public figures in the public or private sector; 
•  matters under the scrutiny of legislative, executive, or judicial bodies, or any other official proceedings; 
• allegations of corruption, fraud, or any other criminal offence, or of administrative offences related to such issues; 
• efforts to uphold the values embedded in Article 2 of the Treaty on European Union, especially protecting democratic processes from improper interference, such as combatting disinformation.

1.3  Abusive court proceedings against public participation

A purely individual dispute between a consumer and a manufacturer or service provider about a product or service falls under the category of public interest only when the issue includes a public interest element, for instance where a product or service fails to comply with environmental or safety standards.

“Abusive court proceedings against public participation” are defined as court proceedings which are not brought to genuinely assert or exercise a right, but have as their main purpose the prevention, restriction or penalisation of public participation, frequently exploiting an imbalance of power between the parties, and which pursue unfounded claims. 

Indicators of such a purpose include, for example: 

• the disproportionate, excessive, or unreasonable nature of the claim or part thereof, including an excessive dispute value;
• the initiation of multiple proceedings by the claimant or associated parties regarding similar matters; 
• intimidation, harassment, or threats by the claimant or their representatives, before or during the proceedings, as well as similar conduct by the claimant in similar or concurrent cases; 
• the bad faith employment of procedural tactics, such as delaying proceedings, fraudulent or abusive forum shopping, or the insincere discontinuation of cases at an advance stage of the proceedings.

1.4  In-scope procedures

Claims made in abusive court proceedings against public participation can be either entirely or partially unfounded. This means that a claim does not have to be wholly without merit for the proceedings to be considered abusive. For example, even a minor violation of personal rights that could lead to a modest compensation claim under applicable law can still be deemed abusive, if a manifestly excessive amount or remedy is claimed. On the other hand, if the claimant pursues well-founded claims, such proceedings should not be regarded as abusive under this Directive.

The Directive applies to procedures of a civil or commercial nature brought in civil proceedings, including procedures for interim and precautionary measures and counteractions, regardless of the court’s nature. It does not extend, in particular, to revenue, customs or administrative matters or the liability of the state for acts and omissions in the exercise of state authority. The Directive does not apply to criminal matters or arbitration and shall be without prejudice to criminal procedural law.

1.5  Cross-border nature

The Directive applies only on cases with cross-border implications. This is not the case if both parties reside in the same Member State as the court seised and all other relevant elements are also within that Member State. 

2.  Protections offered to persons engaged in public participation

2.1  Procedural safeguards

Persons engaged in public participation may seek procedural safeguards from the courts, that have to be treated in an accelerated manner. Any changes to the claims or arguments made by the claimant, including the withdrawal of claims, should not prevent the defendant from applying for remedies.

Security to cover the costs of the proceedings

The court may order the claimant to provide security to cover the estimated costs of the proceedings, which may include the defendant’s legal representation costs, and, if provided for in national law, the estimated damages. 

Providing security does not pre-judge the case’s merits but serves as a precautionary measure to safeguard the effects of a final decision that finds an abuse of procedure, and to cover the costs and, if allowed by national law, the potential damage caused to the defendant, especially where there is a risk of irreparable harm. 

Early dismissal of manifestly unfounded claims

Courts may dismiss, after a proper examination, claims against public participation as manifestly unfounded at the earliest possible stage of the proceedings, in accordance with national law. The burden of proving that the claim is well-founded rests with the claimant. A decision granting early dismissal should be subject to appeal. 

Remedies against abusive court proceedings against public participation

If the court identified the proceedings as abusive, it may include all types of costs that can be awarded under national law in the remedy, encompassing the full costs of legal representation incurred by the defendant unless deemed excessive. If national law does not allow for the full reimbursement of legal representation costs beyond statutory fee scales, Member States should ensure the claimant fully bears such (non-excessive) costs through other means available under national law.

Courts may impose effective, proportionate and dissuasive penalties or other equally effective appropriate measures, including ordering compensation for damages or the publication of the court decision, as provided by national law, on the party who initiated the abusive proceedings. At a minimum, Member States should publish judgments of national courts of appeal or of the highest instance.

2.2  Support for the defendant in court proceedings 

In addition to these procedural safeguards, the Directive provides that courts may permit associations, organisations, trade unions and other entities which have a legitimate interest in protecting or promoting the rights of those engaging in public participation, to (i) provide information in the proceedings and (ii) with the defendant approval, support them.

2.3  Protection against third-country judgments 

Finally, the Directive also mandates that EU courts must refuse to recognise and enforce a judgement from a non-EU country in court proceedings against public participation by an EU resident if those proceedings are considered manifestly unfounded or abusive under the law of the Member State where recognition or enforcement is sought.

Should abusive court proceedings be initiated by a claimant residing outside the EU in a third-country court against an EU resident, the affected person may seek compensation for the damage and costs related to the proceedings in the courts of their home Member State. Member States may limit the exercise of jurisdiction while such proceedings are ongoing in the third country.

3.  Entry into application

As indicated, the Directive was published in the Official Journal of the EU on 16 April 2024 and will enter into force on 6 May 2024. EU Member States, including Ireland but excluding Denmark, are required to transpose the minimum requirements foreseen in the Directive into their national laws within two years, by 7 May 2026. The Directive will become applicable from this date.