Incendiary instructions: a salutary tale
By Gideon Habel
Poor ethical thinking while under pressure can have serious consequences, as Gideon Habel explains
The proposed shift in emphasis in the Solicitors Regulation Authority’s (SRA) regulatory approach from outcomes focused regulation to one of ethical decision-making was front and centre of the changes brought about with the introduction of the standards and regulations (STARs) in 2019.
As the introduction to the code of conduct explains, its provisions “comprise a framework for ethical and competent practice” and require solicitors to “exercise your judgement in applying these standards to the situations you are in and deciding on a course of action”.
A Court of Appeal case earlier this year, in which a solicitor found himself defending an application for permission to commit him for contempt of court, shone a light on the challenges of maintaining a focus on ethical decision-making in situations of high stress.
The events in question took place in July 2019, before the move to the STARs. However, the issues raised around ethical decision-making are as relevant under outcomes focused regulation as they are today, and are worth considering through today’s regulatory lens.
It is important to emphasise at the outset that the outcomes of both the substantive matters before the court and any SRA investigation (if indeed one is on foot) remain to be determined.
However, it is fair to say that the established (and admitted) facts allow for interesting consideration of the importance – and, at times, difficulty – of ethical decision-making under duress.
The events in this unusual case unfolded as part of a dispute between Ocado and one its founders, Jonathan Faiman, and one of his business associates.
Faiman had explored the possibility of a deal with Marks & Spencer which would see him create an online food business but Ocado believed confidential information belonging to it had been misappropriated. It obtained a search of premises and preservation of evidence order.
RM, then a partner at Jones Day, was instructed by Faiman and/or a corporate entity he controlled. In addition to being his legal advisor, RM also described Faiman as a friend.
On being notified of the imminent sweep of various premises, RM gave instructions to his client’s IT manager to "burn" a private messaging app. The manager deleted the app, making any messages irretrievable.
Ocado sought permission to apply to commit RM for contempt of court under the Civil Procedure Rules (CPR) 81, alleging his conduct was intended to interfere with the due administration of justice. It alleged the intentional destruction of documentary material relevant to Ocado’s claim, seeking (among other things) injunctions restraining the use of confidential information relating to its business.
Setting the stall out
RM’s explanation for sending the instruction to burn the app was, essentially, that he did not know “what the search order related to or what in practice it meant”, but that he feared the app’s disclosure to others because it had the potential to cause embarrassment to his wife.
She was, at that time, running for election as a member of the European Parliament. Her name had been used by one of the defendants to Ocado’s claim (apparently without RM’s consent) as a pseudonym on the app. RM also stated that “it truly did not occur to me at the time that what (sic) I was asking him to do anything might represent a breach of the terms of the order”.
He stated: “My gut reaction was to try to protect [my wife] and my sole concern was to avoid having my wife dragged into a potentially embarrassing, high-profile investigation, where her name had been used without her consent and without her knowledge. I was concerned about the reputational harm it could cause her. I panicked, and in the heat of the moment committed a serious lapse of judgement.”
The judge at first instance refused permission on the basis that no sufficient prima facie case of contempt had been made out. If he had found a prima facie case, he considered that the application would have been in the public interest.
The Court of Appeal disagreed that there was no sufficient prima facie case. When considering RM’s role in matters, it made the following findings as to the public interest question: “Here, on the allegations made as to the intended interference with the due administration of justice, a solicitor has ordered the destruction of documentation, knowing of the existence of proceedings and of a search order, with a view to that documentation being unavailable for examination by the claimants in those proceedings.
“I consider that that scenario of itself, in the circumstances, means that the committal application is in the public interest.”
It is hard not to have some sympathy with RM’s apparent motivations, but his decision to self-report to the SRA – made after the IT manager explained to an assistant solicitor at Jones Day what RM had instructed him to do – reflects the potential regulatory and ethical difficulty with how those then influenced his decision-making.
On RM’s own case, questions of personal interest came to influence his actions as a solicitor. Those actions resulted in him taking steps now found by the Court of Appeal to be in breach of a court order aimed at the preservation of documentation, including documents he directed be deleted.
It is readily apparent that the SRA might take issue with this, were it to look at matters under the current regime, applying rules 2.1 and 2.5 relating respectively to the handling of evidence and compliance with court orders.
What is more, the “burn” instruction – on the basis of the court’s summary, given without instruction by his client (potentially in breach of rule 3.1) – potentially took place in a situation of “own interest” conflict (under rule 6.1). This ostensibly put his client in a position where it was no longer able to comply with the court’s order.
Finally, while it may to some degree explain RM’s decision-making, ignorance of the content and significance of the search order would be unlikely to assist in excusing what happened before the SRA. Rule 3.3 requires solicitors to “maintain your competence” and “keep your professional knowledge and skills up to date”.
Indeed, it is not unusual for the SRA to frame conduct in the context of such ignorance as recklessness, bringing with it suggestions of a lack of integrity (principle 5).
Also, were findings of contempt of court to be made, allegations relating to whether the actions upheld the proper administration of justice (principle 1) or public trust and confidence in the profession (principle 2) might also arise.
On any view, these are potentially serious consequences of actions taken in an apparently fraught situation in which, in a short space of time, it appears many decisions had to be made – with many considerations ostensibly at play.
It is, in short, the sort of situation where ethical decision-making is put under the most intense pressure.
RM has already accepted that he made a bad decision. When the instruction to burn the app came to light, he apologised and referred himself to the SRA.
The high court will now decide whether what is alleged amounted to a contempt of court. It is also virtually certain that the SRA will, in due course, look at matters itself (if it is not already doing so).
While any finding of contempt by the court will require proof to the criminal standard, any potential action by the SRA on the same set of facts requires proof only to the civil standard.
While there is no escaping the potential jeopardy, RM could walk away from both processes unscathed.
The damage already done to his professional reputation is, however, clear. It is, if ever there was one, an example of the importance of ethical thinking under pressure.
Gideon Habel is a partner and head of Leigh Day’s regulatory and disciplinary team leighday.co.uk