Westwood: Holistic approach needed
New requirements on legal regulators to strengthen ethical standards from the start of lawyers’ careers have been proposed today.
But the Legal Services Board (LSB) said it recognised that this was not a job for regulation alone.
“It must form part of a holistic approach that will transform workplace and leadership culture,” said chief executive Craig Westwood.
“Equally importantly, our evidence highlights that lawyers need an environment in which they feel supported and empowered to maintain these duties, particularly in the face of competing pressures.
“This includes fostering strong professional support systems that help practitioners navigate complex ethical decisions.”
The LSB has published a draft statutory statement of policy for consultation in response to substantial evidence of conduct “that fall short of public expectations of lawyers to uphold professional ethical duties”.
These ranged from “unintentional behaviour through to more severe, intentional and even criminal conduct, and include misleading courts and compromised independence, as well as more high-profile examples such as the misuse of non-disclosure agreements and the use of strategic lawsuits against public participation (SLAPPs)” – and, of course, the Post Office scandal.
The oversight regulator’s professional ethics and the rule of law project has been gathering evidence for three years and identified three underlying drivers for poor conduct:
- A lack of understanding and/or due regard to the significance of what upholding professional ethical duties means in practice, and how to prioritise different duties when they come into conflict with each other;
- A disproportionate focus on the duty to act in the best interests of the client to the detriment of other professional ethical duties; and
- A lack of empowerment and support to enable authorised persons to maintain their professional ethical duties in the face of commercial pressures and powerful clients, including for those working in an in-house capacity.
The consultation paper noted that, beyond standards set through codes of conduct and guidance, there was “limited bespoke education and training and regulatory support, both at the point of qualification and throughout an authorised person’s career, to help them understand and maintain their professional ethical duties”.
Codes of conduct were “too prescriptive”, and did not teach aspiring lawyers about the overarching role they played in society and how to prioritise different duties in practice.
To address this, the statement of policy sets five outcomes and accompanying expectations for regulators to meet.
Outcome 1 requires regulators to ensure lawyers have the right knowledge and skills on professional ethical duties, both at the point of qualification and throughout their career.
Outcome 2 says regulators must have in place a framework of rules, regulations, guidance and other resources which put ethical duties at the heart of how lawyers are expected to behave.
The LSB said there has until now been little discussion of the environments in which lawyers work, but its research “strongly highlighted the significance of workplace culture and the role of leaders in modelling and incentivising professional ethical conduct”.
Regulation could play a role in reducing the impact of poor culture, “by setting out clear expectations of what good looks like, and cultivating an open, ‘speaking-up’ culture with protection for whistleblowers”.
Outcome 3 therefore says regulators must ensure lawyers are “supported and empowered” to uphold their ethical duties when they are challenged.
This would mean setting “clear reporting expectations” within firms “to facilitate an environment of openness and speaking up” and also establish “a clear line of accountability”.
The regulators will have to show that they can meet these outcomes within 18 months of the final statement being published.
The other two outcomes are that regulators must ensure they are properly monitoring, supervising and, where necessary, taking action to address non-compliance, and that they regularly evaluate the impact of all these new measures.
These will be tested within two years of the regulators meeting the first three outcomes.
The consultation acknowledged that this all may result in an increased burden on lawyers and firms, but said it would be “outweighed by the benefits to consumers and the wider public”.
Mr Westwood said: “Recent events have highlighted that we cannot take professional ethics for granted. The challenges facing legal professionals are complex and evolving, from serving commercial interests and powerful clients to technological disruption.
“These pressures can test even the most principled practitioners, making it crucial that we create a working environment that supports and empowers ethical decision-making.”
It is hard to think of my regulator’s Code of Practice (not conduct) as “too prescriptive ” and “without practical examples” – when it is not obligatory (our rules say we must have regard to it only) and it contains practical examples as positive and negative indicators.