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FREE BOOK CHAPTER from 'A Practical Guide to the SRA Principles, Individual and Law Firm Codes of Conduct 2019 - What Every Law Firm Needs to Know' by Paul Bennett

Chapter Two - Legal Ethics: Back To the Future?

The language and underlying philosophy of legal regulation has, over recent decades, moved from an ethical starting point, from say 1920 onwards, using the language of compliance and the compliance agenda of other regulatory frameworks. The SRA Handbook 2011 owed much to the financial services model then in vogue but which of course had been under intense scrutiny and reform itself following the 2008 financial crisis. The SRA adopted a model which was already behind the curve in 2011.

Compliance is a concept which is based around having and using a set of rules and thereafter putting in place systems and processes to ensure the regulated professional or professionals comply with those rules. Under compliance based regulatory model it is not necessary for the individual professional to understand why the rules exist so long as they simply follow them. You could suggest that this model is one of black and white rules which should be applied irrespective of personal judgement.

By contrast ethical application requires judgment and value decision making.

In the 1980s cult film ‘Back to the Future’ the main character, Marty McFly, struggled with the unintended consequences of his actions when travelling back to the 1950s. The SRA seek to take us from a compliance model towards an ethical decision model. What will the unintended consequences be? Time will tell.

Since at least Roman times lawyers have been regulated, and not unsurprisingly, the manner of that regulation has evolved and developed over the intervening period. Until the SRA introduced Outcomes Focused Regulations (OFR) on the 6th October 2011 it was arguable that in addition to the regulatory framework there was also an underlying concept which practitioners needed to apply of not just following the rules, but looking beyond the rules and understanding why those rules existed, and thus ensuring they applied them having understood the ethical concept which underpin their role and behaviour as a solicitor.

In fairness to the SRA, the SRA Principles 2011 were clearly intended to underpin, by way of an ethical approach, this concept through the 10 simple rules known as Principles. In a press release from the SRA dated the 13th June 2017 their Chief Executive, Paul Phillip, stated:

Clear, high professional standards are at the heart of public confidence and solicitors, law firms and a modern legal sector. Our consultation confirmed that a shorter, clearer Handbook, with a sharp focus on professional standards, is the way forward.”

The SRA’s language for ethics continues to be “professional standards”, but practitioners approaching the new SRA Principles and the Code of Conduct for Individual Solicitors and the Code of Conduct for Law Firms should not misinterpret the use of the SRA’s language of professional standards as to be anything other than professional ethics.

A Little History

It could be argued as recently as 1960, and arguably still today, that there is a very simple formula to regulating any of the professions, whether that be the legal profession, or indeed any other profession. The Secretary-General of the Law Society of England & Wales, Sir Thomas Lund, wrote in the Guide to the Professional Conduct and Etiquette of Solicitors 1960 as follows:

You may well ask for a short summary of solicitors’ duties. I suppose, really, it is the old principle:

Do unto others as you would they should do unto you.”.”1

The SRA’s 2010 consultation on OFR2 indicated that the SRA’s thinking could be summarised as thus in 2010 ahead of the introduction of OFR:

Our current rulebook is detailed and prescriptive. It tends to lead to the use of resources which could be better deployed on higher risk areas and does not help us to get the best out of our relationship with the profession. Even in the current marketplace it becomes increasingly difficult for detailed rules to keep pace with change. This will be even more so with the liberalised legal landscape starting in October 2011. A rulebook needs to be fit for purpose;”

This extract from the executive summary of the 2010 document highlights that the SRA’s aims, both in 2010 with the introduction of OFR, and in the SRA Regime [2019] with the introduction of the simplified SRA Principles [2019] and the introduction of a Code of Conduct for Individuals [2019] and a Code of Conduct for Law Firms [2019], are, in effect, partly an acknowledgement that the 2011 reform aims have not been met and they need to be met in order to reflect the changing legal services market following the radical regulatory overhaul which occurred through the Legal Services Act 2007.

Ethics in Other Jurisdictions

It is not just the Romans that focused on ethics for legal regulation.

The culture of ethical practise is an integral part of much of the world’s common law legal system and whilst the statutory3 attempts to address professional regulation appear to have moved the jurisdiction in England and Wales away from legal ethics, that is not true of the rest of the world. Legal ethics is taught widely and in detail within the United States regime and is an essential part of the course. Those attending law school in America have to undertake the essential component parts of the curriculum sitting alongside traditional legal subjects, and every law school has a professor of ethics. In England and Wales the briefest of mentions arises on the Legal Practice Course (LPC) and legal ethics are not a core research activity (with some very notable voluntary academic exceptions).

Why are Ethics Back in Fashion?

The move under the SRA’s OFR regime to prosecute individual solicitors for breaches of the SRA Principles 2011 as well as the substantive rules has made ethics key again, whether this is before the Solicitors Disciplinary Tribunal, or indeed to make decisions through the SRA Adjudicators in relation to certain aspects of legal practise such as being a Compliance Officer for Legal Practise (COLP) or Compliance Officer for Finance and Administration (COFA). This means that in practice in recent years the regulatory failures of the recent past are being acknowledged and are being addressed against the existing regime in a manner that was not envisaged and sometimes enforcement is unnecessarily difficult. For that reason the underlying ethos when reading the new SRA Principles [2019] and the new Code of Conduct for Individuals [2019] and new Code of Conduct for Law Firms [2019] stems from principles that Sir Thomas Lund would have recognised back in 1960.

Ethics is a concept which works more effectively when dealing with individual solicitors and their conduct. By contrast, the Outcomes Focused Regulation regime was aimed at introducing an entity based regulatory system (i.e. the firm was responsible for the actions of those within it). It is an approach which has ultimately failed and the revised approach with its separate codes for individuals and firms acknowledges this.

Unethical Shift?

The focus now under the forthcoming regime is to ensure that individual solicitors and also those managing law firms understand that as a member of their profession they have to behave ethically because their work has wider consequences than the individual matter in which they are working. Put simply, the SRA has determined that framing behaviours around ethical rules rather than black and white compliance rules will achieve better outcomes: they are almost certainly right.

Since the SRA started its consultations in relation to the new Handbook in 2016 there has been an explosion of articles, books and webinars focused on ethical practise as a solicitor. Why? The absence of ethics from compulsory academic degree level teachings during the LLB degree and the absence of ethics as the dominant force in practise for many years means that when the SRA first published its proposals, those of us working in the regulatory field immediately recognised the re-emergence of ethics.

The guidance that Sir Thomas Lund gave in 1960, other than its old fashioned language and its inappropriate use of “he” in a profession now dominated by “she”, does, however, hold true, and those reading the Principles and the Individual/Firm Code of Conduct moving forward would want to keep these ethical principles at the forefront of their mind. As Sir Thomas Lund put it:

If I had to advise, very briefly, a young solicitor on the guiding principles of conduct when he comes into the profession, I think I should say to him that it is clear that only the very highest conduct is consistent with membership of this profession of ours. Your clients’ interests are paramount – that seems to be clear except that you should never do, or agree to do, anything dishonest or dishonourable, even in a client’s interests or even under pressure from your best and most valued client; you had better lose them…you should refuse to take any personal part in anything which you yourself think is dishonourable; you should withdraw and cease to act for that client, even if he presses you to go on. So far as you possibly can, consistently with not actually letting your client down, you should be completely frank in all of our dealings with the court, with your brother solicitors and with members of the public generally. Finally, I think I would say that where your word has been pledged, either by yourself or by a member of your staff, you should honour that word, even at financial cost to yourself, because his reputation is the greatest asset a solicitor can have, and when you damage your reputation you damage the reputation of the whole body of this very ancient and honourable profession of ours.”4

Those guiding principles which set out an ethical basis for putting the clients’ interests first except where they conflict with public interest and duties to the court remain the same in the SRA Principles and Codes [2019] as the SRA introduce its new ethical code book. Make use of those basic and guiding principles in light of your practise, and your practise will never be too far from appropriate.

Ethics are back. Like the previously mentioned cult film ‘Back to Future’ the SRA’s approach intended or not is changing history by moving away from mere compliance and restoring ethical judgment to prominence.

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1A guide to the professional conduct and etiquette of solicitors by Sir Thomas Lund, Law Society, 1960 in the Introduction.

2Outcomes Focused Regulation transferring the SRA’s regulation of legal services 28th July 2010

3The Legal Services Act 2007 Section 1 (1) merely states “(h) promoting and maintaining adherence to the professional principles” the details of ethics, standards and professional principles are left by legislators to the regulatory bodies.

4Ibid.

Image: cc flickr.com/photos/alexfrance/3194662301