A leading law firm has been found "in contempt" of the Commons after threatening an MP with legal proceedings if he made allegations about one of its clients in the House.
The Standards and Privileges Committee criticised Withers LLP for failing to realise that John Hemming, a Liberal Democrat backbencher, was protected by Parliamentary privilege.
The firm of solicitors had urged the MP to withdraw what they called "defamatory" claims about property developer Jeremy Knight Adams.
They later sought an assurance that he would not repeat the allegations in the Commons, saying that without it they would issue proceedings.
Mr Hemming refused to give the undertaking and advised that the firm's actions might be regarded as contempt of Parliament. Withers dismissed his warning as "inappropriate".
Only after consulting counsel, following a further warning from Clerk of the House Malcolm Jack, did Withers accept it had been "mistaken" and apologised to the Commons and Mr Hemming.
After an inquiry into the row, the Standards and Privileges Committee said today it was "surprised" it took Withers so long to recognise the position.
"We conclude that Withers LLP were in contempt of the House when on 4 August 2009 they threatened Mr Hemming with legal proceedings in respect of statements he had made outside the House concerning their client's behaviour, were he to repeat those statements in the House," it said in a report.
"The contempt was repeated and compounded on subsequent dates, notably on 11 August.
"An opportunity in October to withdraw was not taken by Withers LLP; and the contempt was denied by them even once the matter had been placed before the House.
"We are surprised that a firm of the standing of Withers LLP should have taken so long to understand the scope of Parliamentary privilege.
"It was only when they sought advice from counsel that Withers LLP accepted they had erred and they apologised unreservedly to the House and to Mr Hemming."
The exchange between Withers and the MP concerned a dispute over the planned development of a shopping centre in Mr Hemming's Birmingham Yardley constituency.
In a debate in the Commons in January, Mr Hemming claimed that senior citizens were "suffering from living in a building site" because of the stalled Asda proposals.
He said that Mr Knight Adams owned some land there and was objecting to a compulsory purchase order on it.
"A developer trying to ransom a plot of land is using spoiling tactics to stop me talking about the matter," he told MPs.
The principle of Parliamentary privilege is set down in article nine of the 1689 Bill of Rights, which says: "The freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament."
In a memorandum to the Standards and Privileges Committee, Mr Jack said: "Any omission which interferes or appears to interfere with either House in the performance of its duties may be treated as a contempt.
"It is important that the House act in cases where contempts are committed in order to safeguard their ability to perform their parliamentary functions effectively."
He said that possible sanctions for contempt could include a fine, although the last time one was imposed was in 1666.
The Speaker of the Commons also has the power to issue a warrant to take somebody into custody or, in less serious cases, call the offender to the Bar of the House to be reprimanded.
The last non-MP to be reprimanded at the Bar of the Commons was John Junor, the then editor of the Sunday Express, in 1957. It concerned remarks the paper made about MPs and petrol rationing in the aftermath of the Suez affair.
In the case of Withers, the Standards and Privileges Committee said today it was accepted now that the Commons "should assert its privileges sparingly".
"In the light of the apology the House has received, we make no recommendation for further action on the matter referred to us," it added.
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