The FCA – Transformation to Assertive Supervision
As the legal profession returns to the office after many months ensconced in home offices, many will be looking forward to the increase in social interaction and in-person activities which will inevitably follow. Alongside this, legal services regulators appear to be gearing up for a commensurate rise in bullying and harassment complaints. With developments apace in this area among the UK regulators and further afield, what are we likely to see next from the Solicitors Regulatory Authority (SRA)?
In May 2019, the International Bar Association’s (IBA) research report Us Too? Bullying and Sexual Harassment in the Legal Profession identified bullying and sexual harassment as being ‘rife in legal workplaces’. In particular, younger members of the legal profession were noted to be disproportionately affected, and excessive alcohol consumption was often cited as a contributing factor. A growing number of recent cases before the Solicitors Disciplinary Tribunal (SDT) serve to reinforce this link, most notably, the case of Beckwith v SRA  EWHC 3231 (Admin) made the headlines last year. Beckwith, as many will know, was a case involving allegations of sexual impropriety by a former Magic Circle Partner against a junior female colleague. Both were intoxicated. Although the High Court overturned the SDT’s earlier finding of professional misconduct arising from the sexual encounter, this has not deterred the SRA from continuing to take matters of sexual misconduct seriously.
The SRA’s intention to play a leading role in investigating and acting upon reports of bullying, harassment, and sexual misconduct is set out explicitly in its latest Upholding Professional Standards Report 2019/20 (the ‘SRA Standards Report’), in which sexual harassment remains a theme the SRA ‘continue[s] to see strongly represented’, for a third year running.
During 2019/20, the SRA opened 83 new matters for investigation concerning ‘harassment and inappropriate sexual behaviour in work-related environments’, with a total of 130 open investigations reported as of February 2021. Compared to the previous year, the number of new reports concerning sexual harassment rose by 22.9 per cent (64 new matters were opened during 2018/19). In addition to this, the SRA received an influx of reports citing workplace bullying and harassment as a reason for alleged breaches of its Standards and Regulations, with approximately 140 such matters currently being investigated. The impact of lockdown was fairly limited as many of the complaints received concerned historical incidents.
Sexual misconduct in the barristers’ profession has also made recent headline news. Particular concerns here have centred on ostensibly lenient sanctions being imposed on barristers for sexual impropriety. In response, the Bar Adjudication and Tribunal Service (BTAS) issued a consultation to review its Sanctions Guidance, recommending increasing the sanction range for sexual misconduct, workplace bullying, discrimination, and non-sexual harassment, to include disbarment.
The BTAS’ consultation was triggered in part by the seemingly inconsistent approach being taken by the Bar Standards Board (BSB) and BTAS against barristers, compared to that adopted by the SRA and SDT in relation to solicitors. The Legal Services Board (LSB) has also recently begun working on developing a statement of agreed common principles, which the approved legal regulators and tribunals will adopt when considering allegations of sexual misconduct, bullying and harassment.
These developments are not unique to the United Kingdom. On the other side of the world, regulators in Australia and New Zealand have also been particularly active in seeking to address inappropriate behaviour within their professions. In Australia, a major research project by the Victorian Legal Services Board & Commissioner, and findings of sexual harassment by former High Court Justice Dyson Heydon while he was on the bench, have propelled a range of initiatives. The NSW Legal Services Commissioner has recently introduced an online platform for informal reporting, while the Law Council of Australia has promulgated a National Action Plan to Reduce Sexual Harassment in the Legal Profession. One significant development is reform of the Australian Solicitors Conduct Rules. Rule 42 prohibits discrimination, sexual harassment or workplace bullying “in the course of practice”, giving rise to concerns that this may leave a gap of regulatory coverage for conduct that occurs at social events. A reformulated rule is presently being finalised.
In some respects, New Zealand has been ground zero for the legal profession’s response to the #MeToo movement. In early 2018, coverage of incidents at a high profile New Zealand law firm rocked the local profession, with front-page news reporting a public protest by young lawyers and law students and discussion of the issue in Parliament. The New Zealand Law Society responded with several reviews and working groups, ultimately leading to substantial reform of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. Among the new rules, which took effect in July this year, are clearer definitions of sexual harassment and bullying and mandatory reporting obligations on law firms. Regulated entities are obliged to implement anti-harassment policies and report annually to the Law Society.
In June, one of the incidents that gave rise to the initial push for change came to a conclusion in National Standards Committee No 1 v Gardner-Hopkins  NZLCDT 21, with findings of professional misconduct. The Disciplinary Tribunal concluded its decision by noting:
The Tribunal would not want this decision to be read as one which prevents enjoyable or even warm interactions between practitioners. Or to be read as enforcing a humourless, rigid code of behaviour on the legal profession, which is already a stress-laden one. A careful reading of the evidence recorded in this case, and understanding of the relevance of power imbalances, will reveal the stark differences between healthy collegiality and what happened here: 
The SRA Standards and Regulations are far less prescriptive than the requirements recently adopted in New Zealand. Specific prohibited behaviours are not set out; rather, allegations of inappropriate sexual behaviour and other forms of bullying and harassment may comprise breaches of Principles 2 (upholding public trust and confidence) and 6 (encouraging equality, diversity and inclusion) and paragraph 1.2 of the SRA Code of Conduct for individuals (abuse of position by taking unfair advantage). Definitions for ‘bullying’, ‘harassment’, and ‘inappropriate sexual behaviour’ are also absent, and the obligation to report to the SRA is more broadly stated (paragraphs 7.7 and 7.8 of the SRA Code of Conduct for Solicitors, RELs and RFLs).
However, prescribed definitions within specific guidance may not be too far off the horizon. The SRA Standards Report already provides examples of what the SRA considers amounts to ‘sexual harassment’: “[a]llegations of sexual harassment can include sending inappropriate messages, making inappropriate comments, non-consensual physical contact and serious sexual assault.” The report also suggests that the SRA will be publishing new guidance later this year on ‘workplace culture and a healthy working environment’, and our view is this guidance will likely provide more detailed definitions, as well as examples or case studies, the SRA’s expectations and the approach it will take, in respect of bullying and harassment, both sexual and non-sexual.
Another potential avenue we might see the SRA take would be to update its Enforcement Strategy, to include more detail around the approach it will take on matters concerning bullying, harassment and sexual misconduct. This document underpins the Codes and Principles, and importantly sets out the SRA’s views on issues it considers to be serious.
Additionally and finally, where issues are considered particularly high risk, the SRA can also issue warnings to the profession. Over the past couple of years, it has revised its warning notices in respect of the two other recurrent themes noted in the SRA Standards Report, namely money laundering and dubious investment schemes. While the SRA’s warning notice relating to Non-Disclosure Agreements (NDAs) was revised in response to the #MeToo movement, a warning notice dealing specifically with inappropriate sexual behaviour and other counter-inclusive conduct is not inconceivable owing to the on-going nature of these issues in our profession.
This article was first published in The Solicitors Journal on 2 October 2021 and can be found here.
Julie Norris is a partner in the Regulatory Team. She predominantly acts in the professional services sector, advising lawyers, accountants and built environment professionals on regulatory compliance, investigations, adjudication, enforcement and prosecutions. Julie is top-ranked in both major legal directories for her work in this field. She is recognised as a leader in her field.
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