Civil Fraud Quarterly Round-Up: Q1 2021
This article was first published by The Times on 25 March 2021 which you can read in full by clicking here (subscription required).
The solicitors’ watchdog is right to take charge of misconduct cases but it needs firmer guidance to succeed .
Compared with other watchdogs, the Solicitors Regulation Authority (SRA) has been one of the most vocal and active on so-called #MeToo issues.
However, its approach is still a jumble after Ryan Beckwith, a former partner at Freshfields Bruckhaus Deringer, last November overturned a disciplinary tribunal for misconduct. As a result, the profession urgently needs clarity.
The authority has rightly formed the view that sexual misconduct in law firms is a regulatory matter. This move was critical to bolster and support its role in encouraging and enforcing diversity and equality.
But however justified that stance, it came in an area where there were no existing principles that indicated what the parameters of any misconduct would be. This arena was, and still is, such new territory that a policy view would have been helpful at the outset, setting out the SRA’s position on what behaviour should be categorised as misconduct, where the line falls in respect of public and private life and what distinguishes serious and less serious cases.
The SRA has produced warning notices on various closely linked topics including the use of non-disclosure agreements. It is not clear why it has not done so in relation to sexual misconduct in the workplace.
If guidance had been issued and cases strategically selected to illuminate the boundaries, then policy from the SRA coupled with subsequent disciplinary tribunal decisions would have provided clarity.
The SRA has still not issued any detailed policy guidance and the cases it has brought have not brought clarity. While some cases have succeeded, Beckwith clearly did not and the High Court ruling in November muddied the water further.
Three key areas were engaged by the facts of the case: consent, the private life boundary and abuse of power. On consent, the SRA did not, for reasons that are not entirely clear, allege any wrongdoing. As to abuse of power, no evidence was advanced. As a consequence of this approach, the High Court clearly was reluctant to find professional misconduct without a sound basis.
The decision in Beckwith, the first to reach the High Court on this important topic, did not take the issues any further forward and if anything is a backward step for the SRA. But anyone that thinks it will stop the regulator from investigating and referring matters to the tribunal is mistaken.
Firms and individuals need to understand where the boundaries lie so that they can make informed decisions on reporting obligations. Understanding the boundaries will also help drive forward the cultural change that is necessary in some parts of the profession.
The SRA must consider the lessons from the cases it has brought, as well as those it has not, and share that learning with the profession.
Iain Miller is a Partner in the Regulatory department and specialises in advising law firms and the legal professionals on legal ethics, investigations, and public law matters. He is General Editor of the leading textbook on legal services regulation, Cordery on Legal Services as well as Chair of the Association of Regulatory and Disciplinary Lawyers.
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