Compliance and upholding the rule of law
It is ok not to comply with a client’s instructions, if it otherwise means disregarding your professional duties, says Tracey Calvert
The phrase of the season is, for obvious reasons which I’ve chosen not to be distracted by, ‘the rule of law’. Let’s just say that some might argue it is overused and loosely interpreted in some circles. Lawyers are familiar with the phrase. We also overuse it (together with other familiar words and phrases like integrity, public interest and best interests), without truly reflecting on the magnitude of these bold expressions. Rather than intending to write an article on the meaning of the rule of law, I want to consider its significance to the compliance culture, strategies and operations in our workplaces and beyond. Anyone feeling short-changed should head straight to their legal bookshop where they will find plenty of long, academic responses on the subject. Instead, I will set the scene with a quote from Simon Davis, immediate past president of the Law Society, who wrote in 2018: “The fabric of society is built around legal rights and obligations. Getting a job, buying a home, driving a car, getting married, getting divorced, running a business, employing, being employed, and often most life changing of all: being sued or threatened with prison – all depend on legal rights and obligations being validly created and effectively enforced. In short, civilised society depends on the rule of law being enforced, not the law of the jungle or the rule of the mob. And at the heart of upholding the rule of law is the solicitor”.
For the purposes of any compliance professional, the starting point is the Solicitors Regulation Authority (SRA) principles which set the mood for our relationship with our regulatory body, by describing the fundamental tenets of ethical behaviour. Principle 1 is often overlooked before we dive into a deeper consideration of principles relating to, for example, honesty and integrity. This is risky because principle 1 is a significant statement. By way of reminder, the requirement in this first principle is that we act in a way that upholds the constitutional principle of the rule of law and the proper administration of justice. This is a public interest duty, ie it is designed to ensure that we consider the interests of the public at large when fulfilling our duties as regulated individuals. This means that our actions cannot always be motivated by selfinterest, or even the interests of our clients, but by this higher objective. In practical terms, there are three strands to this which compliance professionals must factor into their thinking: 1 Principle 1 and life outside the office. 2 Principle 1 and professional duties. 3 Principle 1 and its impact on law firm management.
LIFE OUTSIDE THE OFFICE
There is no downtime with the SRA principles; they apply all the time, to all people in an SRA-authorised law firm. This means it’s important that everyone understands that this might trigger the need to self-report matters which have occurred outside of the workplace. The SRA is concerned with any act or behaviour which suggests a serious disregard for the rule of law or the concept that the law applies to everyone. The obvious area of interest is criminal convictions, but the SRA goes further. The wording in paragraph 7.6 of the SRA code of conduct for solicitors (repeated in the code for firms) requires prompt notification to the SRA if you are subject to any criminal charge, conviction or caution (subject to the Rehabilitation of Offenders Act 1974). The firm is brought into this notification process with a further duty in paragraph 7.12 of the solicitors’ code (again repeated in the firms’ code) that the individual reporting notification is satisfied through providing information to the firm’s compliance officer for legal practice (COLP) or compliance officer for finance and administration ( COFA) on the understanding they will make the necessary report.
The compliance checklist should include:
— Training so that everyone understands the SRA principles and notification expectations.
— A whistleblowing and or internal notification process.
— Using SRA resources, such as the enforcement strategy and the topic guide on criminal convictions, outside of practice to inform the firm’s response.
Moving into the professional environment – and the position about upholding the rule of law and the proper administration of justice are immediately evident. No one, for example, can have failed to notice the SRA’s concern that the courts are used only for legitimate and lawful purposes. Here, principle 1 is supported by the duties described in chapter 2 of the solicitors’ code (mirrored in the firm code) so that the solicitor’s role as an officer of the court is not compromised. This means that the starting point must be understanding individual regulatory duties. It is sometimes convenient to forget that public interest principles take precedence over individual duties owed to clients. The phrase, ‘acting in my client’s best interests’, is overused as a justification for breaching principles such as the duty to uphold the rule of law. Such is the importance of understanding that there is a pecking order: the SRA gives guidance on this by saying that should the principles come into conflict, those which safeguard the wider public interest take precedence over an individual client’s interests. In other words, compliance professionals and firm managers must be confident that all colleagues understand that it is sometimes ok – even imperative – to not act on client instructions. Anything less than action based on what is legal and ethical means that the solicitor’s behaviours might be questioned. Being able to say ‘No’ is essential. No client should be able to persuade an individual to disregard their own professional duties. The SRA describes this dilemma by saying that we are not ‘hired guns’ whose only duty is to the client. In addition, the SRA has raised alarm bells over improper and abusive litigation: predatory litigation against third parties, abuse of the litigation process, taking unfair advantage of the opponent or witnesses, misleading the court and excessive litigation.
Compliance checklist suggestions include:
— Ensuring that colleagues are empowered to say ‘No’.
— Training on regulatory and ethical duties.
— Supervisory oversight.
— Use of SRA guidance and warning notices.
To counter client coercion, many firms sensibly include unequivocal statements in terms of business so that clients are made aware that duties to the court and other professional duties will outweigh duties to them. This can be a useful starting point for difficult conversations. More widely, though, it is important that the message is delivered in such a way that colleagues are confident that they can say no. The tone from the top should be firm and collaborative (some colleagues might need help with difficult conversations); and supervisors should monitor that this message is not ignored. Drilling down into the SRA codes of conduct, there is a need to monitor for compliance of the duties designed to address specific obligations to the courts. The difficulty is that these imbue a personal responsibility to do the right thing – for example, to make sure that acts or omissions are brought to the court’s attention and to only put forward properly arguable submissions. These are behaviours which are hard to put into procedures. Training on ethics is the answer: not only for the fee-earners, in terms of the personal professional conduct duties; but also for supervisors, so that they can provide support and an extra pair of eyes and ears for the compliance function. Ideally, training should leave a lasting impression so while a reminder of the content of the SRA standards and regulations cannot be ignored, adding examples of regulatory decision is an invaluable way of demonstrating what happens if poor choices are made.
Compliance checklist suggestions include:
— Evidence of managerial ownership of the risks.
— Individual training.
— Supervisory oversight
Tracey Calvert is a consultant at Oakalls Consultancy Limited oakallsconsultancy.co.uk