Under pressure

Neil Rose looks at how the Post Office scandal has highlighted growing concerns about the legal profession’s ethics

Thanks to ITV’s Mr Bates vs The Post Office, the country is now up to speed with the Post Office Horizon scandal and many of the high-profile alleged culprits. But behind them stood a host of lawyers, on whom the harsh light of the public inquiry chaired by former High Court judge Sir Wyn Williams is now being trained.

Few appear to be coming out of it well, although we wait to hear Sir Wyn’s verdict later this year.

Richard Moorhead, a professor of law and legal ethics at Exeter University, is leading the Post Office project being run by Exeter’s Evidence-based Justice Lab to examine the lessons from it in relation to corporate governance, criminal justice, professional regulation and public accountability. He also sits on the Horizon Compensation Advisory Board.

Speaking at a Westminster Legal Policy Forum event on ethics in February, he predicted that some lawyers involved in the scandal would eventually be struck off, and one or two face criminal prosecution.

“Business as usual means more moments like the Post Office scandal, moments buried away without the scrutiny that this extraordinary case has had”

He continued: “That decisions ranging between the merely questionable and the clearly outrageous should be sprinkled across so many years, within and outside the Post Office, in-house and private practice, Bar and solicitor, junior and very, very senior, suggests professional ethics is something about which practitioners are insufficiently interested, or complacent about, or insufficiently accountable for.”

He said the business of law was “too often” about how aggressive a lawyer could be in pursuit of their client’s case, “rather than truth, justice, or (for prosecutors) fairness”, adding: “Business as usual means more moments like the Post Office scandal, moments buried away without the scrutiny that this extraordinary case has had.”

The pressing question for legal regulators, Professor Moorhead concluded, was how they were going to move from business as usual to making ethics a priority.

Looking for regulatory holes

But while the Post Office is exhibit number one, there have been other issues bothering those overseeing the legal profession, the highest-profile of which are the misuse of non-disclosure agreements (NDAs) and enabling so-called SLAPPs (strategic lawsuits against public participation), an aggressive form of litigation used to curb public criticism. They have proven particularly popular among Russian oligarchs and so the Ukraine war has pushed them near the top of the political agenda.

There was also last summer’s Daily Mail undercover sting that showed lawyers seeming to suggest ways in which a potential client could game the immigration system. The Solicitors Regulation Authority (SRA) shut down three law firms as a result.

All of these issues are being considered by the Legal Services Board (LSB) as part of its professional ethics and the rule of law work programme, which for the past 18 months has been gathering evidence of behaviour that falls short of the standards expected by the public.

The LSB has found examples of potentially legal but unethical acts concealed by NDAs

According to a paper before its main board in January, the oversight regulator has identified six categories of conduct that are of concern, but it does not have sufficient evidence on how prevalent they are.

The six areas are: silencing those with valid legal claims and preventing victims from speaking out; abusing or taking unfair advantage through ‘excessive’ conduct; other case-handling tactics, such as “misleading the court or others by making false or weak claims, distorting interpretation of evidence and misrepresenting facts”; managing conflicts of interest and independence; “creative compliance” with the law; and “client association (and disassociation)”.

By the latter, it meant “representing clients in ways that assist (or likely assist) their continued wrongdoing such as repeated drafting of NDAs for an abusive client, or disassociation with clients, for example, discriminating against potential clients such as asylum seekers, prevents access to justice and undermines trust and confidence in rule of law principles”.

The LSB has now begun exploring the extent to which legal regulators’ existing rules and codes of conduct are capable of addressing professional ethical misconduct and where the holes are, and considering whether regulatory intervention may be necessary.

The paper said the evidence had already highlighted specific areas where regulation may need to be strengthened, such as around NDAs.

This has been an area of particular concern for the LSB and last year it conducted a call for evidence that that found examples of potentially legal but unethical acts concealed by NDAs – such as bullying, and settlements over consumer products – as well as alleged illegal activity.

The findings indicated that lawyers could be complicit in this: “For example, there were accounts where individuals reported feeling pressured into signing agreements, where an imbalance of power led to a detrimental outcome for an individual and where individuals in vulnerable circumstances felt this was exploited to the benefit of the other party.”

Lawyers as enablers

These concerns extend beyond the confines of the profession. Last autumn, the Institute of Business Ethics launched a taskforce on the legal profession, a heavy hitting group of City lawyers and anti-corruption experts tasked with examining the ethics of solicitors providing civil legal services to overseas oligarchs and kleptocrats.

It said the move reflected long-standing concerns by the UK, EU and US governments that lawyers may be playing a role in enabling overseas corruption.

It is chaired by former Allen & Overy senior partner Guy Beringer, who said the right to representation in civil matters was not clearly established like it was in criminal law.

In a subsequent interview, Mr Beringer explained that commercial law firms must be prepared to publicly justify acting for controversial clients and not hide behind professional arguments like access to justice.

“Some firms still argue that it’s a matter of access to justice and the rule of law if an extraordinarily wealthy person can get representation to buy a superyacht. We’re thinking, ‘we haven’t been able to find that principle’.”

That did not mean they should not take on such clients, but they had to acknowledge that this was a commercial decision first and foremost.

The taskforce’s deputy chair, Robert Barrington, professor of anti-corruption practice at Centre for the Study of Corruption at Sussex University, argued earlier last year that there was “a group of clients who should not be represented by lawyers” and the profession should be discussing where to draw the line.

“Civil society representatives have warned that UK legal services are too accessible to corrupt capital, while members of the legal profession have warned of the risks of undermining core principles such as the right to representation, access to justice, and the principle of not associating the lawyer with the client.”

Dr Ian Peters, director of the Institute of Business Ethics, adds: “There are increasing examples of oligarchs using or looking to use our courts and UK-based firms for their civil proceedings and commercial transactions.

“This means practitioners are walking a tightrope between professional obligations to provide representation and commercial considerations on one side, and the ethics of representing such individuals and what that means for public perceptions of their firms on the other.”

Culture over rules

Because, of course, legal ethics do not occur in a vacuum – it’s about how lawyers deal with the pressures from clients and employers when put into a tricky situation. Indeed, SRA research last year found that, while most in-house lawyers were generally able to withstand pressures on their independence, a minority reported demands to act unethically – 10% of the 1,200 surveyed said their regulatory obligations had been ‘compromised’.

A further 5% said they had faced pressure to ‘suppress or ignore’ information which could conflict with their professional obligations, while the same proportion said they had experienced pressure from colleagues not to disclose information that was not in the best interests of the client.

This all goes to the wider issue that, aside from rules, law firms and others employing them need to adopt cultures setting out values and standards, and where lawyers can admit and learn from mistakes.

This is particularly important at a time when the younger generation of lawyers, combined with an ever-greater focus on law firms’ approach to ESG (environmental, social and governance) issues, are turning up the heat on law firm leaders.

According to a survey by Obelisk Support as part of its report, World in Motion: why the legal profession cannot stand still, junior lawyers want the right to refuse to work on certain matters for ethical reasons, but few firms currently provide it.

The report identified four pillars that it said would help drive the change the profession needed to see: a balance of purpose and profit, being actively climate conscious, enhancing accessibility to the profession, and a stronger focus on professional ethics.

“Nearly three-quarters of young lawyers polled agreed or strongly agreed that they would not join an organisation whose values did not match with their own, even if they were offering more money”

Nearly three-quarters of young lawyers polled agreed or strongly agreed that they would not join an organisation whose values did not match with their own, even if they were offering more money. An even higher proportion (86%) said they were looking to effect positive change in society through their work as a lawyer.

While nearly two-thirds said employers should allow them to refuse to work on certain matters for ethical reasons, only 18% could say their current employer did this. Just over half said they would feel able to challenge management if they believed they were being asked to do something they saw as unethical.

This is a new dynamic for law firm leaders. While some employers are genuinely committed to ESG, plenty are still paying lip service – almost all survey respondents agreed that some organisations were guilty of window dressing when it came to tackling diversity and other ethical issues.

And yet half said their own employer has a purpose beyond profitability, reflected perhaps in the small but growing number of law firms becoming B Corps – whose goal is exactly that – and also employee owned.

Obelisk chief executive Dana Denis-Smith says: “The next generation of lawyers is expecting the legal profession to shift to a business model that prioritises sustainability beyond profitability. Legal businesses that reflect the core principles of purpose, equality and environmental awareness will be the trusted partners of clients.

“Mindful of their own responsibilities, clients are pressing for their supply chains to reflect these new priorities.

“Businesses are now in an era of ‘show, not tell’ and law firms are not immune from scrutiny. It is not enough to draft the policies and send out the press releases – they have to prove they mean something. This will create the platform for motivated staff to deliver for their clients.”

A lack of energy

Undoubtedly, the pressure on the profession is growing. Speaking at the same Westminster Legal Policy Forum conference, LSB chief executive Matthew Hill said regulators and leaders of the profession needed to accept that “there may – indeed is likely to be – a strategic failing with current approaches to regulation”.

He explained: “While we have seen some moves by regulators to reflect public concern – for example the warning notices issued by the SRA on SLAPPs and NDAs – it has been slower and less extensive than I think any reasonable observer would now consider justified.

“I do have some sympathy for the regulators in this respect. They frequently face stiff and concerted opposition to attempts to make regulatory interventions.

“But it seems to me that public concern is now so widespread that a continued lack of energy from the regulators and indeed the professions themselves to grapple meaningfully with the issues is starting to look stark and indeed mildly ridiculous.”

Mr Hill stressed that he was not talking about individual cases. “What I am talking about is asking the question ‘how are these things happening despite our system of regulation?'”

He added that he has stopped using the disclaimer that “the vast majority of lawyers behave perfectly ethically all of the time”. This was “not because I do not believe it to be true”, he explained, “but more because I don’t think anyone can actually demonstrate that it is. It has become an article of faith, which to my mind has no place in a rational debate about the future of legal ethics”.

“Instead I am going to say that I think there are two statements that I think are almost certainly false. The first is that ‘all lawyers are crooks’. The other is ‘it’s just a few bad apples’. In between those two statements, however, lies a very complicated landscape, and one about which we probably ought to be more honest with ourselves if we are to drive the sorts of improvements that I think the public deserve.”

The risk of not addressing these problems was spelt out by Professor Barrington: “The concern must be that if the legal profession does not get its own house in order, there will be an unwanted alternative such as heavy-handed legislation or some form of international blacklisting.”

What does it mean for lawyers to uphold the rule of law?

As part of its professional ethics and rule of law programme, the Legal Services Board commissioned a report, What does it mean for lawyers to uphold the rule of law?, from Professor Richard Moorhead of Exeter University and Professor Steven Vaughan and doctoral student Kenta Tsuda, both of University College London.

This warned that lawyers can sometimes be “too inclined” to act unethically or use a “mistaken” adherence to an overly narrow view of the rule of law to justify questionable conduct. Such a view leads them to conclude that, just because something is in their client’s interests or is not forbidden by a law or rule, it is not unethical. This “must be wrong”, the study said.

There needed to be a “contextual view” that meant “some means of advancing a client’s interests, even if not clearly prohibited, can offend shared understandings about fair play or the actual meaning of a law”.

But the study’s analysis of ethical risks suggested that lawyers “are sometimes too inclined to engage in professionally questionable, and potentially even illegal, actions without fully reflecting on the legal rules and interests engaged”.

It found the potential for the rule of law to be challenged by certain forms of lawyer conduct was “widespread and significant”, and that lawyers have a “mistaken and frequent adherence to the narrow view of the rule of law when falling into error, and that is where many of the more borderline (and problematic) situations arise”.

“Many of the examples that we explore involve divided loyalties: on one hand, obligations to a particular client; and, on the other, duties to the collective (to the court, to the administration of justice, to the wider public interest),” they said.

“The particular social role of lawyers requires them to act in the best interests of their clients and as agents of the rule of law.”

But while it was generally agreed that lawyers were of “critical importance” to the rule of law, there has been little effort to explain how, they said.

“The rule of law is foundational to a healthy society and lawyers foundational to that health. Lawyer independence and integrity in striking the balances that a healthy society needs is foundational to that too.”