England: Solicitor guidance on reporting serious misconduct is legally deficient

England: Solicitor guidance on reporting serious misconduct is legally deficient

Current guidance for solicitors on reporting serious misconduct is legally deficient and lacks clarity, experts have warned.

Researchers have written to the Solicitors Regulation Authority (SRA), calling for improved guidance on when and how lawyers need to internally and externally report or disclose wrongdoing by their clients.

They say the SRA’s existing guidance fails to deal with a number of relevant issues germane to practice. There is a particular failure to deal with issues of reporting up and out when dealing with organisational clients.

Three industry experts – Professor Richard Moorhead, Graeme Johnston, and Jenifer Swallow – are calling for improved guidance on when and how lawyers need to report and sometime disclose wrongdoing.

Their discussions with lawyers in private practice and in-house suggest the boundaries and issues when they face ethical pressures are not clearly understood. This means issues are not always effectively dealt with, as well as damage to the public interest in the administration of justice, and acute, sometimes irreparable, harm to the mental health and careers of the lawyers concerned.

The experts believe there are currently significant misunderstandings around the handling of legal professional privilege. This leads to solicitors sometimes inappropriately asserting confidentiality and privilege to protect reputation and wrongdoing.

They believe current SRA guidance is inadequate because it understates the right or duty of disclosure in various specific ways; it sometimes appears to get the law wrong; it lacks appropriate clarity; and it often nudges the reader towards non-disclosure rather than stating the position more neutrally.

Improved guidance would provide valuable support to lawyers faced with conflicts between overweening clients (or executives within clients) and their obligations as a solicitor. The SRA can help address these problems through better guidance and support as well as hosting workshops developing and then rolling out new guidance.

The guidance does not address lawyers’ obligation to report up within organisational clients when faced with evidence of potential ‘iniquity’. Professor Moorhead, Mr Johnston and Ms Swallow say lawyers when faced with these problems have a less strong grasp of reporting up obligations than they should.

Specific problems identified with the guidance by the experts include:

  • The guidance appears to be wrong in law in insisting that solicitors must have information which ‘is sufficiently detailed or compelling enough for you to form an opinion that a serious criminal offence will occur.’
  • Ongoing wrongdoing is not addressed. This is particularly relevant in commercial work.
  • There is an absence of realistic commercial examples. This is likely to give the impression that the issue does not really arise in commercial work.
  • The guidance is confusing on the centrality of confidentiality to the law of privilege and does not adequately address privilege and its waiver.
  • Public interest disclosures need to be more carefully addressed.
  • The guidance is unbalanced on data protection and likely to chill disclosure.
  • There is no mention of whistleblower protections

Ms Swallow said: “Client confidentiality is, rightly, a core principle of legal practice. However, misconceptions around it abound and it can be misused. Clarity is needed. This is something on which the SRA and other legal services regulators can lead, in the interests of supporting the efficacy, tenor and pace at which issues and wrongdoing inside organisations are alerted and addressed.”

Professor Moorhead commented: “We can point to a number of serious scandals where wrongdoing by a client is ignored or finessed away by their lawyers rather than being properly dealt by the proper decision-making bodies of those organisations. The SRA can better support lawyers in some of the trickiest dilemmas of their professional lives by providing clearer guidance which deals not only with the nuclear option of disclosure of wrongdoing but how to manage the process of reporting up within organisations. Having discussed key examples with many lawyers, I am convinced that better more commercially focused guidance here would help. And new guidance would enable the SRA to work with practice to lead a debate on a crucial governance issue.”

Mr Johnston said: “The current SRA guidance doesn’t adequately articulate the circumstances in which lawyers may or must report concerns. It significantly misstates the law on some important points. It also tends to minimise the situations in which reporting is appropriate.”

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