29 September 2020
What has the decision of the leader of the Labour party to make an out of court settlement and an unreserved apology to the Panorama claimants got to do with the news that Starmer is now sending personalised letters to wealthy former major Labour donors who stopped donating under Corbyn?
The connection is accountability and democracy. The libel settlement was a surprise to many party members. Much of this surprise was centred around the way in which it was done. Members of Cardiff North Labour party were probably not alone in expressing disquiet about the process. After discussing and passing the following motion on 5th August, it was sent to the leader’s office on 8th August.
Cardiff North motion passed on 5th August 2020
Cardiff North CLP notes the recent decision of the party leader to avoid a court judgement and settle a claim of libel brought by the journalist John Ware and seven former party officials that has reportedly cost the party over £600,000.
We regret that such action
- appears to contradict legal advice received by the party that NEC members understood to indicate that the party had a winnable case;
- pre-empts the Forde Inquiry’s investigation into the circumstances and contents of the report entitled “The work of the Labour Party’s Governance and Legal Unit in relation to antisemitism, 2014-2019”, which features many of the people represented in the legal action above;
- has been taken without any explanation made to the NEC (still less to the wider membership) as to the content of the presumably new and different legal advice received by the leader’s office, detailing where it differed from the original advice that suggested Labour had a winnable case.
We call on the leader of the party to
- confirm that no further major legal decisions are made without prior discussion with the NEC as the elected representatives of the membership (whose subscriptions go to fund any such actions or settlements);
- agree that the NEC is provided with a full outline of the legal reasoning behind any proposed action;
- ensure that (within the confines of the legal process) as full an outline as possible of any legal advice and explanation for any proposed action is communicated to the membership.
Who knows whether this (or any similar initiatives from other CLPs) prompted the general secretary to write to CLPs. But on 12th August, David Evans the new general secretary of the Labour party wrote to all CLP secretaries and chairs setting out some instructions following the party’s out of court settlements with the Panorama claimants. Evans wrote:
…These settlements included an unreserved apology and a withdrawal of the allegations previously made by the party about those individuals. The withdrawal and the apology are binding on the party and any motions which seek to undermine or contradict them will create a risk of further legal proceedings for both the national party and local parties. As such, motions relating to these settlements and the circumstances behind them are not competent business for discussion by local parties.
… We therefore take this opportunity to reiterate to local Labour parties and officers that they should be aware of the potential liabilities to them should the allegations that have now been withdrawn by the national Party be repeated.
Unsurprisingly this was a controversial move and criticised by many in the party as an unwarranted attempt to shut down debate. The point however is that it is possible to discuss the leader’s decision to settle this case without a court judgement, while avoiding making any defamatory statements. Whether or not one agrees with one side or the other in this dispute, the manner of concluding it is a separate issue and a perfectly legitimate area for CLP discussion. It is a question of accountability to the membership and transparency of behaviour of the leadership in spending hundreds of thousands of pounds of members’ money.
We can all agree that there is no place for anti-Semitism in the Labour party and the sooner that any anti-Semites are expelled, the better. But it is also important that there is scrutiny, transparency and accountability in the way that the party deals with its finances. In fact, the greater the level of accountability and transparency, the more likely it is that the party will make good decisions that will have the support of the membership – not just in relation to finance but to everything else as well.
So, the initial surprise that the leader of the party had decided not to contest the claims for libel brought by the journalist John Ware and seven former party employees, was deepened on hearing the reports of the costs incurred by the party in settling these claims. Depending on which news organisation you listened to, the settlement cost the party anything between £600K and £800K.
Given the scale of this, and the fact that both the previous leader, Corbyn and the Unite general secretary and NEC member Len McCluskey are on record as saying that the party had received legal advice that it had a winnable case, we might have expected an explanation from the party. Instead party members got nothing. The party website carried two press releases relating to the two separate cases settled, but
- there is no explanation as to how the decision to settle in this way was taken, who was involved in the decision and on what legal advice;
- there is no definitive declaration of how much all this has cost the party;
- there is no indication of whether the Party asked for these costs to be scrutinised by the court (which raises a further question, if not, why not?);
The statements mention the importance of being open and transparent without being so in relation to these cases. As the House of Commons Culture, Media and Sport Select Committee has noted in the past: ‘Defamation has traditionally been labelled a ‘rich man’s tort’ as libel cases are notoriously expensive and public funding, through legal aid, is not available.’ Therefore, it is important to make a sound judgement about whether or not to contest any particular case. If the legal advice obtained suggested that there was a strong risk of losing the case, then there was a good argument for an out of court settlement – regardless of the merits of the case – on the basis of cost. If however, legal advice had been received that suggested that it was winnable, then the assumption would be to contest the case.
If, in this particular case, there was new legal advice or the legal advice changed for whatever reason, then it seems reasonable that this should have been shared with the NEC so that they could examine whether it was likely to be a good use of a significant sum of members’ money. But the NEC was not informed of any new advice and, when questioned specifically on this on Channel 4 News on 14th August, the leader’s responses were very interesting:
Liz Bates, C4 political correspondent: You settled recently the court case on anti-Semitism. You were criticised for that by among others, Jeremy Corbyn, who suggested that you were advised that you didn’t need to settle that case because the Labour party could have won it.
Keir Starmer: Well, Jeremy Corbyn will have his own views. I am utterly focused on what I said which is that I’d root out anti-Semitism in the Labour party and that I will be judged by my actions.
Bates: Were you advised on that court case that the party could have won it, and so it was a political decision?
Starmer: Look, I’m not going to go into the confidential advice that we’ve had on ongoing cases and you wouldn’t expect me to do so but all of the
Bates: I’m just trying to figure out whether it was a political decision rather than a sort of, legal necessity.
Starmer: It was the right decision to make in that case and it was part of my absolute determination to root out anti-Semitism in the Labour party…
What is most noticeable here is that Starmer doesn’t answer the question, and instead twice mentions his determination ‘to root out anti-Semitism in the party’ (laudable but not relevant to whether the legal advice suggested the case was winnable) and then throws in the red herring of not being able ‘to go into the confidential advice that we’ve had on ongoing cases’. Obviously, nobody is going to publish legal advice either before a case is concluded or while it is still taking place (presumably why the party did not publish the legal advice referred to by Corbyn and McCluskey). But first, it isn’t an ‘ongoing case’ – that’s the point, he settled. And second, Bates asked him only whether the party had received legal advice that the party could have won the case. This required a simple yes or no answer but he refused to say, offering only the judgement that it was the ‘right decision’, which wasn’t the question. If the party did receive new advice that contradicted the earlier advice that they could have won it, it is very surprising that he declined to mention this when pressed on this question. The existence of such new advice would be a powerful reason for settling and avoiding possible even greater expense.
Another argument used by both Starmer and Rayner is that this settlement ‘draws a line’ under the controversy. But if they thought that, it seems they were seriously mistaken. Almost as soon as the settlement was agreed, the lawyer involved announced that there were a further 32 former Labour officials, including the former general secretary Iain McNicol, who will be suing the party for data breaches and libel within the leaked report.
Other sources (e.g. the Campaign Against Anti-semitism) suggest that there are 50 other individuals (mostly former officials) who are preparing to sue the Labour party for libel. According to the Daily Express, ex-party staff said they would drop the legal action if Corbyn was expelled from the party. The Times went further with an opinion piece from one of its leader writers, demanding the ‘rooting out of Corbynism and Corbynistas’. And Panorama journalist John Ware announced that he intended to pursue Jeremy Corbyn and others for defamation.
Mark Lewis the solicitor who represented the recent claimants has said in relation to additional possible cases:
“If this bankrupts the Labour party or individuals, so be it. Actions have consequences.”
Does this constitute ‘drawing a line under it’?
The settlement also pre-empts the Forde Inquiry’s investigation into the circumstances and contents of the report entitled “The work of the Labour Party’s Governance and Legal Unit in relation to antisemitism, 2014-2019”, which features many of the people represented in the legal action. The settlement statement says that it
has no impact or in any way binds the independent panel of investigation being conducted under the chair of Martin Forde
But obviously it does, because the settlement statement also offers ‘an unreserved apology’ to the former members of staff’ and says:
We acknowledge the many years of dedicated and committed service… given to the Labour Party as members and as staff. We appreciate their valuable contribution at all levels of the Party.
We unreservedly withdraw all allegations of bad faith, malice and lying.
If that isn’t pre-empting, then the word is meaningless. This presents the Forde Inquiry in particular and Labour more generally with a problem, and it is a problem that can only be resolved by transparency and accountability.
Both individual members and affiliated unions expect to be involved in important party discussions. They expect transparency and accountability. They don’t expect to be balloted on every single decision that has to be made but they do expect that their elected representatives on the NEC will be party to decision-making. If they are ignored it simply stores up problems.
Len McCluskey, the general secretary of Unite (Labour’s most important union supporter) has already said that there is ‘no doubt’ Unite’s executive committee will now want to review the huge sums it gives to Labour – more than £7m since the start of 2019. McCluskey warned:
It would be a mistake if anybody took Unite for granted.
This warning, together with reports of membership loss, appears to have been taken to heart by Starmer’s team. Of course, there have always been some on the right of the Parliamentary Labour Party who would like to cut loose from any reliance on the unions. These are usually the same people who think that members have too much influence in decision-making. But their problem is that in the absence of state funding of political parties, their only other option is to go cap in hand to wealthy individuals. Judging by his actions, Starmer seems to think that the revival of passing the begging bowl round to ‘high net worth individuals’ (rich people), rather than relying on membership subs and union donations is the way to go, with an offer of ‘invite-only strategy updates’ to wealthy donors.
He may wish to look back at the last time this was the way Labour raised money. It didn’t end well. It was the favoured approach of Blair and Mandelson and they increased the numbers of rich donors contributing and then got around the rules on publicly declaring donations by agreeing secret ‘loans’ of £14million from wealthy supporters.
By sheer coincidence, several of these individuals were nominated for seats in the House of Lords. The idea was that these loans would be quietly written off at a later date but this blew up into the ‘Cash for Honours’ scandal in 2006.
The party then had to repay millions and was plunged into debt for almost a decade. In 2014 Labour still had a net debt of £5.7m and the debts were only paid off with the huge increase in membership from 2015 and the election of Corbyn as leader. At last year’s annual conference, the party treasurer, Diana Holland, was able to announce that for the 3rd year in a row Labour was debt-free.
The reason that this is important in the context of the libel claim settlement is that decisions on finance which are taken secretly and keep both the NEC and the membership in the dark are likely to backfire. In terms of party funding, Labour was the cleanest party in Britain. Almost all of Labour’s funding came from the half a million members’ subscriptions and from the affiliation fees and donations from trade unions’ political funds that are themselves regularly subject to democratic mandate.
We had some early signals of a change when Starmer relied heavily on large donations from wealthy donors in his leadership campaign so this is perhaps no surprise. Unlike the other leadership candidates, Starmer did not name his financial backers during the campaign. After he was elected, he revealed that among the large donations he received were two of £100K, one of £95K, one of £50K, four of £25K, and one of £20K from wealthy individuals or companies.
There are obvious reasons why this matters. We all know the old saying: ‘He who pays the piper calls the tune’, and rich individuals rarely part with large sums of their money without an expectation. We could say the same for small donors and that would be true too. But the difference is that a party that overwhelmingly relies on small donations, membership fees or contributions to union political funds has to be able to inspire millions of people to support it financially. That means it has to be seen to be far closer to its electoral support, is not beholden to a small group of rich individuals and must reflect – to an extent at least – the needs and ambitions of its supporters. In short, small donations from the many lean towards democracy, large donations from the few lean towards oligarchy.
To keep Labour’s handling of its finances clean, we need accountability and transparency, and this case is no exception. After the libel settlement, the least we should demand from the leader of the party is that he make commitments that
- no further major legal decisions are made without prior discussion with the NEC as the elected representatives of the membership (whose subscriptions go to fund any such actions or settlements);
- the NEC is provided with a full outline of the legal reasoning behind any proposed action;
- and that (within the confines of the legal process) as full an outline as possible of any legal advice and explanation for any proposed action is communicated to the membership.
But this nowhere near enough. With the news of the return to reliance on wealthy donors, the emphasis on accountability and democracy is all the more urgent. So the launch of a new Labour Campaign for Clean Money is very welcome. It’s call for a rule change so that the party sets a maximum of £1000 per annum in donations from any individual or organisation (except for trade unions and cooperative societies; for which the allowed amount is unlimited) should be supported by every local Labour party and affiliated trade union. Money talks and Labour needs to talk on behalf of the many not the few.
 Of course, whether or not they pursue the case, we shall have to wait and see. It may be relevant to whether Corbyn is individually sued or not that a fighting fund set up for his legal defence produced donations of over £300,000 in double quick time.