Ethics and regulation: Pointing the finger

Ethics is high of thoughts for authorized regulators within the mild of legal professionals’ involvement within the Publish Workplace scandal, high-profile SLAPPs (strategic lawsuits towards public participation) and alleged misuse of non-disclosure agreements (NDAs). A trial of alleged fraud at collapsed agency Axiom Ince has been listed for February 2027.

All of this raises questions on the place the duty for regulating ethics lies. Are regulators offering adequate steerage and assist, in addition to well timed enforcement to uphold requirements and foster public belief within the career?

Moral conduct isn’t voluntary. It’s a part of the principles {of professional} apply for solicitors and barristers. Solicitors must adjust to seven SRA rules which, along with upholding the regulation and public belief within the career, require them to behave with independence, honesty and integrity, and in the perfect pursuits of their purchasers.

The Bar Requirements Board guidelines embody a code of conduct, which covers barristers’ behaviour of their skilled and non-professional lives.

The Legislation Society is engaged on an moral apply framework for in-house solicitors, which will likely be adopted by a framework for legal professionals in non-public apply subsequent yr. Legislation Society president Richard Atkinson says: ‘On the Legislation Society we’re always searching for methods we are able to higher assist the career to stick to excessive moral requirements. That is why we began our three-year ethics programme, in an effort to assist the career navigate the notably advanced and altering panorama through which authorized providers are supplied.’

In relation to regulatory duty for ethics, he observes: ‘Nobody particular person or lawyer has general duty for ethics. Ethics are the duty of each solicitor and each regulation agency, in addition to each compliance officer for authorized apply (COLP), compliance officer for finance and administration (COFA), each in-house lawyer and basic counsel.’

LSB session

Final month, the Authorized Companies Board introduced a session on Upholding Skilled Moral Duties, which is open till 29 Could. It acknowledges the significance of ‘a working surroundings that helps and empowers moral decision-making’. The session additionally proposes 5 outcomes on how efficient regulation, along with ongoing schooling and coaching, can assist make sure that legal professionals perceive and uphold their moral duties and duties all through their careers.

Whereas efficient regulation is a crucial driver {of professional} ethics, the LSB’s newest regulatory efficiency evaluation criticises the SRA and the BSB on their management, efficient method to regulation and operational supply. That is important as a result of the SRA and the BSB collectively cowl over 90% of regulated authorized professionals (the SRA regulates 164,936 practitioners, and the BSB 17,483). Whereas this was the primary yr through which operational supply was assessed, the SRA and the BSB had been the one two regulators beneath the LSB’s oversight that scored ‘inadequate’.

The report referred particularly to the SRA’s authorisation, supervision and enforcement processes, stating: ‘This follows our evaluation into the regulatory occasions main as much as the SRA’s intervention into Axiom Ince, which [included] a failure to place in place correct mechanisms to oversee corporations which pose a better danger to shoppers, and a failure to correctly defend shopper funds.’ In relation to the BSB, the report raised ‘critical issues in regards to the tempo of reform and the effectiveness of its board in holding the chief to account for the mandatory enhancements’.

Criticisms have additionally been fabricated from the LSB itself. Towards this background, how can frontline regulators guarantee practitioners resolve moral dilemmas that they themselves are failing to handle?

Name to motion

Richard Moorhead, professor of regulation {and professional} ethics on the College of Exeter, is a long-time campaigner for improved skilled ethics. Moorhead’s evaluation of the Publish Workplace scandal led to his appointment to the Horizon Compensation Advisory Board. Final October and November, he delivered the annual Hamlyn lectures. His third was a name for motion in respect of lawyer ethics, citing three central issues:

Extreme aggression in authorized work – suggesting issues are authorized which can be doubtless not authorized, together with deceptive and abusive dealing with of authorized issues;
Mutually irresponsible administration of authorized choices between legal professionals and purchasers – usually aided by legal professionals; and,
Abuse of confidentiality and authorized skilled privilege.

Moorhead mooted a brand new impartial fee centered on ethics, and ‘extra succesful, higher resourced and extra revered regulators capable of pretty however robustly implement their rulebook towards highly effective gamers’, supported by clearer skilled steerage and codes of conduct. These could be complemented by ongoing schooling, coaching and competence critiques for all legal professionals. However is the reply one more regulator?

Paul Bennett, a associate at Bennett Briegal who specialises in authorized regulation and partnership, thinks there needs to be fewer fairly than extra regulators. He just lately wrote within the Gazette that the LSB needs to be abolished, stating that ‘in criticising the SRA, the LSB was protecting its tracks and obscuring its personal systemic failings’.

Moorhead acknowledges that ‘there’s a little bit of blame-shifting occurring’. He recollects the SRA’s thematic evaluation {of professional} obligations, revealed final December, which discovered that ‘about one in 5 COLPs didn’t know their skilled reporting obligations, which is a central a part of their job.

‘That instructed that legal professionals didn’t know their very own guidelines, at the very least within the areas that the SRA checked out of their evaluation. So there are makes an attempt at measuring the issue in addition to circumstances. Clearly the Publish Workplace is an enormous instance, however there are others too, round NDAs and SLAPPs.’

He cites the Solicitors Disciplinary Tribunal discovering towards Osborne Clarke associate and head of shopper technique Ashley Hurst. Hurst’s defence was that he ‘was not knowingly sending what folks now time period as SLAPPs’ to tax lawyer and commentator Dan Neidle in relation to his public feedback about former chancellor Nadhim Zahawi.

Nonetheless, Moorhead disagrees with Bennett. ‘If we didn’t have the LSB, the regulators must be straight accountable to parliament, and that might be a retrograde step, particularly because the LSB is beginning to do some fairly smart issues on ethics.’

Coverage concerns

The Westminster Authorized Coverage Discussion board keynote seminar ‘Subsequent steps for authorized skilled ethics’, held on 3 April, included representations from the LSB, the SRA, the BSB and the Legislation Society.

LSB chief government Craig Westwood outlined the LSB’s particular duties as oversight regulator on ethics, and the rationale for the session. Richard Orpin, director, regulation and coverage on the LSB, famous that ‘regulation has a transparent position to play, but it surely isn’t a silver bullet’. The reply is for everybody concerned to work collectively ‘to allow a tradition through which it’s a lot simpler for authorized professionals to behave in accordance with their moral duties and uphold them successfully when challenged’.

Juliet Oliver, basic counsel on the SRA, referenced latest enforcement work. She famous the SRA’s thematic critiques into the independence and integrity of in-house legal professionals, and its compliance with the SLAPPs warning discover, in addition to new guidelines regarding office tradition.

Trying forward, short-term milestones embody the result of the Publish Workplace Inquiry; the SRA has over 20 reside investigations into legal professionals concerned within the affair. Oliver observes: ‘We’re presently contemplating with our board the place adjustments to the regulatory framework are wanted to strengthen moral practices, notably in litigation and disclosure.’

Individually, the SRA is engaged on steerage on generative AI, and leveraging its personal knowledge and intelligence to enhance transparency and handle danger. ‘We’re options with a wider lens,’ Oliver provides, ‘to assist professionals in balancing their obligation and to drive a tradition that helps moral consciousness and equips legal professionals to establish and navigate dangers.’

Ewen Macleod, director of technique and coverage on the BSB, defined that the board is consulting on a brand new five-year technique, and invited contributions. Whereas the BSB is reviewing its code of conduct, ‘showing in courtroom is just one ingredient of what barristers do, so are we sufficiently clear about how totally different duties work together?’ Just like the SRA, the BSB is wanting into the moral use of know-how, acknowledging that the majority barristers are self-employed, which brings challenges referring to coaching and growth, and tradition as a driver of behaviours and outcomes.

Lucy Dennett, coverage director on the Legislation Society, inspired regulatory our bodies to work collectively and likewise to look past the career, referencing the Legislation Society’s Authorized Wants Survey and the significance of bettering public confidence within the authorized sector. The Society’s Altering Moral Landscapes undertaking, and its forthcoming framework for in-house solicitors will ‘give folks very sensible instruments to assist them do the precise factor’, she observes.

Tom Hayhoe, chair of the Authorized Companies Shopper Panel, echoed the necessity to contain shoppers. ‘With out confidence in sturdy moral rules, shoppers are susceptible to not understanding the authorized system, going through exploitation and injustice and dropping confidence within the system altogether.’

Whereas the panel agreed that necessary coaching and sharing requirements and experiences throughout disciplines would enhance legal professionals’ health to practise, they didn’t deal with how the regulators’ numerous steerage will drive cultural change, or the danger of making extra confusion round moral decision-making if the varied frameworks should not completely aligned.

Chain of accountability

Moorhead factors to competence as a cultural driver. Whereas all regulated regulation corporations should have a delegated COLP, he observes that the ‘COLP position is patchy or variable and the regulators must get a grip on that’. And whereas enforcement drives behaviours, it needs to be constant throughout a number of establishments, together with the courts. ‘The regulators must dedicate extra sources to the standard of their enforcement groups and presumably the quantity of their investigation and enforcement work,’ he says.

The courts have a job to play too. ‘The courts’ tendency is to brush off ethics points as too tough…[they] must take it extra significantly and there must be a transparent chain of accountability round authorized initiatives like litigation, in order that it’s clear who takes duty for choices on disclosure, for instance, in order that it’s not a sport of cross the parcel.’

Moorhead means that ethics points run deep. ‘Somewhat than altering the principles, it’s about strengthening accountability and enforcement,’ he provides, ‘and guaranteeing that legal professionals and their corporations or chambers take ethics significantly, fairly than simply paying lip service to it. It’s fairly an enormous cultural drawback.’

Bennett highlights the necessity for regulators to current a united entrance on ethics. They might introduce a coaching requirement for authorized providers suppliers – regulation corporations, barristers’ chambers and in-house counsel – just like that for anti-money laundering. He agrees with Moorhead that there’s potential to centralise regulation agency ethics by way of the COLP position, so that everybody understands their duties.

Addressing the ethics dilemma

One other misalignment between ethics and ethical judgement is the misperception that every one moral failings are deliberate. ‘In apply, it’s extra about eager about it correctly than being a foul particular person,’ observes Moorhead.

The issue is ingrained in regulation agency and in-house tradition, stemming from inner and exterior pressures on regulation agency associates and in-house counsel to be client- and business-focused. Nonetheless, ‘they shouldn’t be solely or primarily client-focused as a result of additionally they have to concentrate to the rule of regulation and the administration of justice’, says Moorhead.

On the Westminster discussion board, strategic adviser and former basic counsel Jenifer Swallow highlighted the stress between performing within the shopper’s greatest curiosity and performing within the public curiosity. She defined that whereas ‘companies need the worth that in-house legal professionals deliver – ethics, governance, safety and HR – little to no in-house work entails a reserved exercise. Firms are more and more hiring much less skilled legal professionals and calling them basic counsel – partly as a result of they’re much less prone to push again [when it comes to acting ethically].’ Swallow requires extra assist for in-house legal professionals, particularly when they’re conflicted, and ‘extra concerted efforts between regulators and extra consistency and customary floor after we discuss ethics’ (see additionally Apply Factors, p33).

Alluding to Moorhead’s level about most moral failings being oversights, Swallow explains that in-house legal professionals particularly are anticipated to lawyer aggressively. They usually have to withstand strain from their company bosses to overstep the mark. The identical applies to junior associates in regulation corporations who might not really feel capable of problem the associate main a case. The flip facet is that there are additionally legal professionals and judges – within the Publish Workplace case, James Hartley of Freeths, who acted for 555 claimant postmasters, and Lord Justice Fraser, who refused a request from the Publish Workplace’s legal professionals to recuse himself – who’re ready to go the additional mile to realize justice.

So how can the career enhance? Bennett underlines the necessity for persevering with skilled growth. ‘Many of the career don’t have common ethics coaching, so how can we count on legal professionals to make good moral judgements?’ he asks. ‘Even the COLP and COFA programs solely embody about an hour on ethics and only a few legal professionals can recall the seven SRA rules with out wanting them up.’

For in-house legal professionals, Swallow believes in normalising early intervention. ‘You’ve to have the ability to name one thing out right away if it feels unsuitable,’ she says. ‘When you don’t do it the primary time, it appears much less dangerous the second, third and fourth time.’

Exterior recommendation (from outdoors the enterprise) can be key. ‘I trialled an initiative when volunteers from a small GC neighborhood would bounce on calls with one another after we had a problem – basically we mentored one another and mentioned what labored and what didn’t.’ Swallow believes that authorized ethics needs to be a part of a agency, chambers or authorized division’s ‘governance stack’.

She explains: ‘Traditionally, the authorized governance stack has been AML checks, battle checks and shopper cash. What we’d like now’s an ethics stack, which is successfully an independence stack. The steerage from the SRA and the Legislation Society assist to level us within the path of greatest apply, however we’re not there but.’

Like others, Swallow is anxious in regards to the disparity between the totally different regulators and steerage, and reiterates the difficulties legal professionals encounter when phoning the SRA’s ethics helpline. ‘It’d assist to make a listing of examples, however [ethics] is a bit like knowledge safety, the place we’d take into account the precept towards the very fact – every case is totally different, so there’s by no means going to be repeatable output.’

Swallow isn’t satisfied about necessary coaching. ‘Coaching by itself isn’t what makes a distinction. We’d like scenario-based sensible innovation, ethics-related conversations in group conferences, and we have to make it culturally OK for juniors to name issues out.’ Time can be an essential constraint. ‘It’s essential for in-house legal professionals to have a relationship with the board, in order that they [learn to] ask questions that produce the firebreak, as a substitute of at all times having to provide it your self.’

Framework for belief

Valuing Attorneys was the subject of the girl chief justice’s Sir Henry Brooke Lecture 2025 on the British and Irish Authorized Info Institute. Baroness Carr of Walton-on-the-Hill highlighted ethics, requirements and efficient regulation as vital success elements.

She mentioned: ‘To make sure that the career continues to be extremely valued, to minimise the danger of unethical conduct that calls into query its worth, it’s of basic significance that the precise regulatory constructions are in place and the precise method to the instructing and upkeep {of professional} ethics is in place. That’s the problem. It’s one which I’ve little doubt might be met.’

It in all probability can. However many laypeople stay to be satisfied that will probably be, or that the career is as much as the job.