The SDT and the Chamber of Secrets

This Post is co-authored with Steven Vaughan and was originally published on 2 April 2015 as a guest blog on Richard Moorhead’s Lawyer Watch. Thanks to Steven and Richard for their agreement to my re-posting it here, and HT to Richard for the snazzy title. Steven begins…

I am doing some work on the concept of lawyer independence. I’d read the LSA, and the relevant SRA principles and guidance, and searched the SRA website to see where Principle 3 was mentioned. Principle 3 says that a solicitor must, “not allow [his/her] independence to be compromised.”

I’d then gone to look for case law, found an interesting case from the High Court on referral fees (Reed v George Marriott [2009] EWHC 1183 (Admin)) and had the Farooqi case helpfully pointed out to me by Richard Moorhead. He blogged on it here.

I then went to go search rulings by the Solicitors Disciplinary Tribunal. I’d done this for two reasons. First, the vast majority of cases involving alleged, or actual, solicitor misconduct never get appealed (and so aren’t reported in the higher courts). Second, I had seen in the SRA’s recent report on litigator’s duties a reference to a 2004 SDT ruling which mentioned independence (In the matter of Paul Francis Simms, Solicitors Disciplinary Tribunal, 2 Feburary 2004) and wondered if any other rulings had similar dicta.

The SDT website ( allows you to search judgements, or you can browse them all in one long list. If you want to search, you can do this by: (i) Case Reference; (ii) Full Name; (iii) Allegation Type (‘Breaches’; ‘Delays’; ‘Account Rules’ etc); (iv) Outcome (‘Fines’; ‘Strike Off’ etc); or (v) Date. What you cannot do is search by keyword. So, I cannot find all the judgements that consider, say, Principle 3, or the term “duty to the court”.

I emailed the SDT to ask for their help. I won’t put their reply below, as I hadn’t said I was going to publish it, but, in effect, they said this was a resources issue. I can see that. In part.

I posted my incredulity about this onto Twitter. Julian Webb was the first to respond. I’ll let him take over here…

…I can’t say I was surprised by Steven’s experience. It echoed my own from a couple of years ago when I started wondering about the uses the SDT has made of professional disrepute in its decisions, and the range of penalties imposed – a topic which, in the absence of more substantial (ie funded) research assistance, I decided to park in the too difficult box, largely because of the limits of search functionality on the website.

To be sure, what we have now is a quantum advance from the days when SDT decisions were only available on request, and, of course, the SDT is not alone. The Register of Disciplinary Action (RODA) in my new home of Victoria is similarly geared to the simplest of category-driven consumer searches. But it is hard to see why text-based and Boolean search functionality, like keyword searching, should be an issue; indeed the Scottish SSDT website already provides it.

Does it matter? It may be objected that this is a real minority concern (I did joke to Steven that we might be the only two people on the planet to consider this a significant problem; I was wrong; in the end there was six of us in the conversation…) and that the SDT is not there to facilitate research. But the issue actually deserves a better response than that, because there is a more fundamental point to be made about the relationship between accessibility of decisions (and in the digital age that must surely imply a certain threshold of functionality), public trust, accountability and education. Indeed, the Tribunal’s own publications policy makes the point for us:

Publishing Judgments is important in ensuring that the Tribunal’s processes are transparent. The content of Judgments assists in Informing and educating users of legal services and the profession. Publication enables the Tribunal’s stakeholders to be reassured that the Tribunal’s decision-making powers are being exercised proportionately and consistently, and that the Tribunal is accountable for its decisions.

These are sentiments with which we concur, but does the SDT really believe its site has the functionality to enable anyone to make assessments of ‘proportionality and consistency’ at anything but a very basic level of comparison?  In the context of increasing concerns about the accountability of professionals, and the historic evidence from a number of jurisdictions of under-enforcement of disciplinary breaches, the point should not be considered purely academic. Now back to Steven for our conclusion….

…In its 2013/2014 Annual Report, the SDT notes a 2013 running cost of £2.1m. Just under £900,000 of this is spent on employment costs. The Legal Services Act 2007 requires that the full cost of funding the SDT comes from a levy on the profession via the annual practising certificate fee. The SDT’s 2013/2014 Annual Report sets out that the proportion of total practising fee income paid to the SDT was 2% in 2013-2014. In 2013, only £9,600 was spent by the SDT on its website. That’s 0.005% of the SDT’s overal running cost. Wouldn’t it be better to spend say, a little less money on employment costs (or AGMs or Training Days or SDT Members’ fees) and a little more on making the website fit for purpose and allowing the law on solicitors’ discipline and punishment to be better known, and more open to proper evaluation?

When Facebook doesn’t ‘like’ lawyers

…it sues them. Or so it seems given the recent civil complaint filed by Facebook and its CEO Mark Zuckerberg in New York last week. The claim has been brought against DLA Piper, Lippes Mathias Wexler Friedman, Milberg LLP, and Paul Argentieri & Assoc., and a numbers of named partners in those firms.

The case arises out of an attempt, since 2010, by Paul Ceglia to establish a claim to ownersip of a substantial share of Facebook, actions which have so far led not only to the summary dismissal of Ceglia’s civil suit in 2013, but to Ceglia’s indictment before a grand jury on criminal fraud charges. (Though it should be noted both that the criminal charges have not yet come to trial, and that Ceglia has appealed the dismissal of his civil claim against Zuckerberg – the latter one assumes more in hope than expectation given the Magistrate Judge’s damning comments on the quality of Ceglia’s evidence).

The case against DLA Piper (US) and the other law firms is of interest for a number of reasons, beyond the spectator sport of a big corporation turning on ‘big law’ (what some may see as a variation on Oscar Wilde’s theme of the unspeakable in pursuit of the uneatable). It will almost certainly raise procedural-ethical issues regarding lawyer-client privilege, and, further, the lawyers’ duty not to mislead the court. In the latter context it also raises a larger meta-ethical issue for the court, as to its willingness to permit a plaintiff with deep pockets to pursue lawyers through the courts for (allegedly) just doing their job… or not.

And that will be the crux of the case. Ceglia managed to go through lawyers faster than the proverbial knife through butter before his claim was dismissed. Facebook’s full complaint (posted here by Above the Law) has been selective in choosing as its targets those that it sees as most culpable. The defendant most vulnerable in this regard is surely Paul Argentieri and his firm, since the local NY attorney Argentieri is not only the lawyer who has lasted longest by Ceglia’s side, but the one who devised the initial litigation strategy that sought to bolster the credibility of Ceglia’s claim precisely by bringing in a number of ‘blue chip’ firms like DLA Piper. It is of course this very strategy that now threatens those who bought into it with a very uncomfortable few months, and which gives Facebook’s (civil) claims of malicious prosecution and conspiracy at least a scintilla of a chance – or better.

The liability of DLA Piper, Milberg and others will likely turn on key events between the end of March 2011 and May 2012, when Milberg lawyers Dumain and Young withdrew. Ceglia’s claim was based primarily on a contract with Zuckerberg which appeared to show that the latter was engaged by Ceglia to work on “The Face Book” and another project called “StreetFax”. Around the end of March 2011 one of Ceglia’s attorneys (from Kasowitz, Benson, Torres & Friedman) found what appeared to be an original of this contract on Ceglia’s computer hard drive, but without the whole first page which made reference to Facebook. This led the Kasowitz attorneys to the conclusion that the ‘StreetFax’ contract was redrafted long after the event to include Facebook, and Ceglia’s claim was therefore fraudulent. Kasowitz immediately withdrew from representation, communicating its concerns about the apparent forgery to Argentieri. DLA Piper and Lippes Mathias continued to represent Ceglia. DLA apparently playing a significant part in amending, and bolstering Ceglia’s complaint by reference to emails (the provenance of which also came to be heavily contested) said to be between Ceglia and Zuckerberg, but which had not been mentioned in the original complaint. The Amended Complaint was filed on 11th April, and on that same day another of Ceglia’s representative firms, Connors & Vilardo withdrew their representation, being replaced by additional counsel from DLA Piper. On 13th April, attorney Marks of Kasowitz wrote to Lippes Matthias, DLA Piper and Argentieri, memorialising his earlier discoveries about the contract and prior communications with Argentieri. Marks indicated that he would not report the matter to the District Court pending an investigation promised by Dennis Vacco of Lippes Matthias. Whether there was an investigation by Vacco is moot, but it appears that DLA Piper and Lippes Matthias continued to represent Ceglia into June 2011, with both firms withdrawing only at the end of the month, and on the eve of a court hearing brought by Facebook seeking expedited discovery.  Neither of these firms (nor Kasowitz) appears to have alerted the court as to concerns as to the falsity of any facts as alleged by Ceglia. After the withdrawal of his counsel Ceglia continued to be represented by Argentieri and a San Diego sole practitioner, Jeffrey Lake (until 18th October 2011), when the lawyer merry-go-round set off again. The final defendant firm, Milberg joined the action in early March 2012, withdrawing at the end of May,  There appears to be some uncertainty as to why Milberg withdrew, but, again, nothing in the public record indicates that they raised concerns of a possible fraud on the court.

At the core of Facebook’s case, then, seems to be a claim that the failure of successive firms to disclose why they were withdrawing effectively kept Ceglia’s action on the road, and forced the company to keep defending long after the wheels should have come off what was (in the view of Facebook/Zuckerberg) a groundless scam. But that by itself is unlikely to be enough for Facebook/Zuckerberg to win in court. The action here is proceeding on the basis of two tortious claims: malicious prosecution and deceit/collusion with intent to deceive a court (the latter specifically under the New York Judiciary Law). Malicious prosecution is not easy to establish: the plaintiff needs to show the suit was brought without probable cause, initiated out of actual malice, and (in New York) there is also a requirement to show special damage. Each of these requirements set the bar high for a plaintiff. Probable cause may be the least of it: if the defendants can be shown to have known, or ought reasonably to have known that Ceglia was engaging in fraud, perjury or the suppression of evidence, then that element could well be satisfied. Proving malice and special damage is likely to be more difficult, though the extent to which the defendants investigated Ceglia’s claims is certainly a matter that Facebook will pursue, as failure to investigate may itself be regarded as evidence of malice.

Discovery will likely be interesting; some evidence is already in the public domain from the original action, but we must wait to see how critical a part lawyer-client privilege (and the crime/fraud exception) will play in limiting the defendants’ exposure to scrutiny.

How the second action for deceit plays out will also be interesting. Courts do not like being deceived, and that is clearly reflected in section 487 of the NY Judiciary Law, which not only creates a specific action of deceiving the court, but requires the court to award treble damages where deceit is proven. But courts are also nervous of being used by plaintiffs for purely strategic or vengeful ends, and there is some concern, particularly in the US, following the Chevron litigation, that corporate plaintiffs are adopting a tactic of using the courts to deter lawyers from acting against them.

While I can’t say I’m a fan of corporate power in the courtroom, I’m not particularly convinced by that argument either, given its continuing dependence on the ideal-typical lawyer as a disinterested neutral partisan. There is surely a risk with high profile-high value litigation that lawyer self-interest gets significantly caught up in the mix, not least because success in a high value claim not only offers a substantial payday for the firm (particularly if the case is run on a generous contingency), but because it can be a reputation-maker for the lawyers involved. Whether that is what happened in the original Ceglia case, we must wait and see, but the tendency of some very experienced and high profile firms to get involved in this case, particularly as more and more lawyers pulled out, seems hard to explain on entirely rational grounds – at least with the benefit of hindsight!

If the Facebook claim does get to trial (and I would hesitate to bet against it, despite the obstacles) the outcome if the defendants lose are not going to be pretty, either financially or reputationally. Moreover though this action, of course, does not have a disciplinary function, a finding against the lawyers involved for Ceglia could also have disciplinary consequences for them, as proof of malicious prosecution would surely offer at least prima facie evidence of breaches of their professional obligations to the court (here under rules 3.1 and 3.3 of the New York Rules of Professional Conduct).

Regulators behaving badly?

Warning: approx. 2500 word post!

Following the BBC Scotland Lawyers behaving badly programme I thought I would have a look at what the Scottish disciplinary tribunal, the SSDT, had actually been deciding in its dishonesty cases. These are an important group of cases. Dishonesty is at the top of the misconduct pyramid, so robust handling of dishonesty matters both for public protection, and to protect the reputation of the profession. Before looking at the cases its worth making a couple of preliminary points. As we saw in the last post, straightforward dishonesty will normally merit the highest sanction of striking off – removal from the Roll of solicitors, but dishonesty can cover a fairly broad spectrum of acts, including embezzlement, forging signatures on documents (whether for financial gain or to cover up administrative mistakes or incompetence), misleading clients, and misleading the court, another lawyer or a non-client, whether at the behest of your client or otherwise. There may be degrees of culpability and specific circumstances may offer an element of mitigation. Dishonesty will also often be mixed up with other disciplinary failures, such as technical breaches of accounting rules. In short there may be a range of factors to take into account in assessing the appropriate outcome, and the tribunal has an element of discretion. We would not expect a 100% strike off rate, even for dishonesty.

The reported decisions are also, of course, only part of the story. These are the cases that are prosecuted successfully. We don’t know how many prosecutions are dismissed and on what grounds because those decision are not reported. We don’t know much about how regulators exercise their discretion to prosecute. There are various ways of dealing with possible dishonesty. Even if there is putative evidence of dishonesty, a case may not, eg, for evidential or public interest reasons, be pursued as one of dishonesty. By taking the case out of the dishonesty category, this effectively (though sometimes only marginally) reduces the seriousness of the misconduct, and opens up a greater range of disposal options to the tribunal. Something like this appears to have happened in O’Donnell (2009), where a taking of money without the client’s consent was characterised as “borrowing”. This in our view saved the respondent from a likely suspension (at the very least). I have not surveyed the entire SSDT database to look for cases where the conduct disclosed possible dishonesty in fact, but the case was not disposed of as a dishonesty case.

A final warning: the relative brevity with which the tribunal’s reasoning is often reported makes interpreting and applying these decisions more of an art than a science. This may add to the scope for reasonable disagreement.

The two cases on which the BBC focused were O’Donnell and Murray – neither is a straightforward dishonesty case, and this is part of what makes them both interesting and problematic. Each involved multiple hearings dealing with a range of misconduct.The first hearing in O’Donnell in 2008 clearly did not involve dishonesty, and culpability was reduced by what the tribunal accepted to be clear evidence of clinical depression. In the 2010 hearing the ‘borrowing’ of £60,000 from a client was, as noted, not treated as dishonesty, and the tribunal regarded the lack of complaint from the client, the fact that there was ultimately no financial loss to the client and the respondent’s continuing ill health as mitigation. Murray is factually quite tangled. Nonetheless, there appear to be two clear findings that Murray misled clients. This is dishonesty, which in my opinion would have merited striking off, or a suspension if he was lucky, in the first proceedings in 2004/05. The decisions to censure on this occasion, and subsequently to suspend rather than strike off for a further act of deception are thus somewhat surprising. But are they out of line with SSDT practice? This is where the cases analysis comes in.

The SSDT website identifies 44 decisions since 1995 in which dishonesty was proven or admitted. In 33 of those cases the respondent solicitor was struck off, leaving 11 instances (25%) in which lesser penalties were imposed, ranging from censure and fining to suspension. 25% seems a rather high level of exceptional cases, so it is worth looking at those in more detail. In four of them lengthy suspensions, of five years or more, were imposed. Suspension of such duration certainly suggests the tribunal treated the misconduct in these cases as very serious; in practice, lengthy periods of suspension may kill a solicitor’s career as effectively as a strike off. This leaves seven cases where more minor penalties were applied: Cohen (2009), Hay (2009), Donald (2008), Sheppard (2008), Kirk (2007), Malcolm (2005), and Young (2002).[i]  In two of these, Sheppard and Kirk, the solicitors’ names had already been removed from the Roll, thereby limiting the penalties available to the tribunal. Consequently there were only five cases across a 12 year period in which dishonesty was proven and strike off or suspension was clearly considered excessive by the tribunal. Four of these involved misrepresentations in which there was no element of theft or other financial impropriety by the respondent, though one, Malcolm (2005), did involve substantially misleading the client. This case, and the last, Cohen (2009) (which involved an attempted expropriation by the respondent of around £3,000 in unclaimed tenants’ deposits which had been sitting in various trust accounts for about 20 years) are, on my reading, both cases where the respondent may have been lucky to escape a period of suspension. So, aside from Murray and O’Donnell, neither of which formed part of the SSDT’s dishonesty dataset, there are two out of 44 cases where (in my judgment, FWIW) the penalty seems on the lenient side relative to current norms.

This doesn’t of course mean that everything is necessarily hunky dory in the world of professional discipline. A growing body of academic work on lawyer deviance has highlighted a number of common concerns across a range of jurisdictions.

Firstly, traditional discipline systems seem to create disincentives to complain/inflict relatively high rates of attrition on client complaints. There is some evidence that separating responsibility for complaints from the representative body has generally increased both the number of initial client complaints, and the number that make it to disciplinary tribunals (see the data summarised by Rick Abel, Lawyers in the Dock, Oxford, 2008, 503-5). The creation in 2008 of the Scottish Legal Complaints Commission (SLCC) as a single gateway for complainants has certainly given the Scottish system an element of independence. Complaints about unsatisfactory service are dealt with by the SLCC separately from the Law Society of Scotland, but that still leaves the Law Society responsible for professional misconduct investigations, whereas in England and Wales that function is now undertaken by the SRA. To that extent, then, there is a greater degree of formal independence in England and Wales. How much difference that actually makes is moot, and we are not going to find the answer by looking at tribunal decisions: we would need to know much more about how investigations are conducted and the ways in which decisions to prosecute are made.

Secondly, there is some concern that prosecutors tend to focus on what are called ‘high reward/low risk’ cases for the regulator, ie, cases that involve demonstrable reputational harm – dishonesty, deceit, mishandling of client accounts – or a history of disciplinary infringements/lack of governability (eg failures to communicate with or cooperate with the regulators). The lack of risk in pursuing such cases may be increased by a tendency also to target lower status or marginal practitioners – particularly solo and small firm practitioners. Cases involving powerful actors or more morally ambiguous behaviour appear correspondingly less likely to be prosecuted (see, eg, Leslie Levin, ‘The ethical world of solo and small firm practitioners’ (2004) 41 Houston Law Review 309; Alice Woolley, ‘Regulation in practice: The ‘ethical economy’ of lawyer regulation in Canada and a case study in lawyer deviance’ (2012) 15 Legal Ethics 241. Note also the ongoing independent case review being undertaken for the SRA by Professor Gus John to examine evidence of disproportionality and discrimination in the disciplinary process – The Scottish dishonesty cases certainly fit that pattern with a preponderance of small firm and sole practitioners among the ranks of those prosecuted.[ii] That said, arguments about disproportionality should not detract from the fact that, as Rick Abel pithily concludes: “the harms… of solo and small firm practitioners are real – and the victims are even more disadvantaged and vulnerable than the perpetrators” (Lawyers in the Dock, p.506).  At the same time, who complains and why, and who is prosecuted and why, remain interesting, and potentially morally loaded questions that have been under-researched.

Thirdly, comparative work also points to a tendency among tribunals to hand out relatively light ‘symbolic’ sanctions, particularly for first offences.This may be seen by the tribunals as justifiable because the majority of lawyers do not actually re-offend. O’Donnell (2008) might be looked at as just such a case of symbolic sanctioning; there was no dishonesty involved; there was evidence of ill health in mitigation, and the respondent had taken steps to address his problems, though even so, by English standards, a fine of £500 would be exceptionally low. The continuing leniency in the second hearing (2010) seems harder to justify. It has been argued that a more aggressive approach than has been the norm may be needed in dealing with repeat and recalcitrant offenders if the public protection objectives of the discipline system are to be properly met (Leslie Levin, ‘Misbehaving lawyers: Cross-country comparisons’ (2012) 15 Legal Ethics 357).

Dishonesty cases tend not to fit that pattern because of their perceived seriousness. A dishonesty offence is still most likely to receive a suspension or strike off, even if it is a first offence. A number of the Scottish dishonesty cases nevertheless appear to raise interesting questions in this light about prosecution policy and the ways in which the Law Society of Scotland has assessed risk in the past (with the caveat that this analysis is based purely on the reported disciplinary tribunal findings which tend not, of course, give a full picture of the circumstances behind each). In a number of these cases there are early and continuing warning signs, often of poor accounting and case/risk management practices which can be a signifier of more serious trouble ahead, especially for smaller firms. In Kay (2013) an inspection of his practice reported that there had been no proper accounts for at least the previous three years. He had also consistently failed to respond to Law Society correspondence and statutory notices between 2007 and 2009; had not responded to correspondence to Master Policy insurers, and failed to pay his insurance excess on a professional negligence claim that had been brought against him. In Ruark (2012) the respondent had been subjected to frequent inspections between 2004-07 which highlighted continuing failures to complete and record property transactions and their financing in the proper form. Ruark and Kay were ultimately struck off, but there were signs of significant problems as early as 2004; in addition to other failures already noted, Kay also had two findings of inadequate professional services made against him in 2008 and 2009 and, it appears, had not paid the compensation ordered on each occasion. These cases may be outliers, but why did it take the Law Society so long to initiate the final and decisive intervention?[iii]

The extent to which and robustness with which a prosecutor can appeal seemingly lenient tribunal decisions can act as an important corrective to outlier decisions, and may also provide the tribunal with judicial guidance on the exercise of its powers. One question worth speculating on is whether an independent regulator might be more robust in its role as prosecutor when it comes to appealing lenient outcomes. There is certainly some feeling in England and Wales in the wake of the Spence (2012, unreported) and  SRA v Davidson [2012] appeals that the SRA has become more willing to challenge SDT ‘failures’ to strike off through the courts.

Finally, there are also debates about the extent to which regulatory systems should continue to separate discipline from redress and rehabilitation. Even though tribunals see their jurisdiction at least partly in terms of public protection, this does not always extend to awarding compensation or restitution to clients for inconvenience, financial loss or other harm suffered, or to requiring lawyers to undertake rehabilitation through appropriate retraining or (eg) compulsory drug/alcohol programmes. Training or other rehabilitative orders are not an option under either the Scottish or English legislation. Similarly the tribunal In England and Wales cannot order compensation, however, in Scotland it now can, though the financial limit is relatively low (£5000 maximum). It is notable that the use of compensatory powers in the larger Australian jurisdictions has become widespread (see Linda Haller, ‘Professional discipline for incompetent lawyers? Developments in the UK and Australia’ (2010) 17 International Journal of the Legal Profession 83). It will be interesting to see how the practice develops through the SSDT in Scotland,

So what’s my conclusion? From this somewhat cursory analysis the Scottish discipline system, in its treatment of dishonesty cases, seems to share many of the strengths and weaknesses seen across other systems in the Common Law world. It does not appear that outcomes in dishonesty cases are radically out of line, though there are certainly some decisions that raise questions of principle. The number of arguably ‘lenient’ decisions, proportionately, does not seem excessive to me (I’d be interested in other’s views on that) but the time taken to initiate disciplinary proceedings in a number of cases ought, from a public protection perspective, be a matter of some concern. Does that mean the Scottish regulatory system can disregard calls for a more independent regulatory structure? If I was a serious critic of this (or any other) system, I wouldn’t make my argument by looking (just) at alleged failings at the most serious end of the continuum. The regulator’s robustness in prosecuting and appealing decisions; the resource it commits to investigation and risk management, and how the system deals with more ‘routine’ misconduct may provide far more telling indicators of its actual independence than its approach to what should be the most egregious of cases.

[i] I have excluded Miller and Morrison (2005) from this subset as Morrison was censured for her inadequate supervision of Miller, not for dishonesty. Miller, an assistant solicitor, was struck off.

[ii] The respondents in the Scottish dishonesty cases also fit the pattern seen in other studies of lawyer deviance in that they tend to be older practitioners and disproportionately male (only 4 out of the 45 respondents are female).

[iii] Though in Ruark’s case the disciplinary process would have been somewhat delayed while criminal proceedings were under consideration.

Lawyers behaving badly

Lawyers Behaving Badly, BBC Scotland’s investigation into the disciplining of Scottish solicitors undoubtedly caused a stir when it was transmitted last week, but not entirely for the right reasons. Arguments about the quality and standards of journalism have tended to deflect attention away from the underlying question of whether there is a fundamental problem with the Scottish lawyer discipline system, and, in particular, whether a move to English-style ‘independent’ regulation would make a difference.

A key argument of the programme seemed to be that a move to English-style regulation is required. Although the programme raised some interesting issues regarding regulatory co-ordination between the Scottish Legal Aid Board and the Law Society of Scotland, the evidence presented in support of that claim was rather diffuse: one case of a solicitor who had been struck off for incompetence providing unregulated legal advice, but in circumstances where there did not appear to be clear evidence that he was holding himself out as a solicitor, nor that he was routinely charging for legal advice, and two cases of what seemed to be dishonesty where the solicitors were not struck off. Would English-style regulation have made a difference in any of these cases? Short answer: not necessarily.

The first problem, of unregulated legal advice, could equally arise in England and Wales. The risk that disqualified lawyers can – so long as they don’t hold themselves out as solicitors – ‘practice’ outside the regulated sphere still exists in England and Wales, and since the alternative is to impose broad sanctions for unauthorised practice of law which create a (US-style) virtual monopoly market for regulated lawyers, I wouldn’t bank on any government in the UK agreeing to such regulations anytime soon.

Regarding the disciplinary cases, both the Scottish Solicitors Discipline Tribunal (SSDT) and the English Solicitors Disciplinary Tribunal (SDT) are statutory bodies that operate independently of the Law Society of Scotland and the SRA respectively. The English reforms have not changed the basic form and function of the SDT. So a change to independent regulation would not necessarily make a difference here either.

The unanimous opinion of the independent experts interviewed by the BBC (of whom I was one) was simply that the SSDT had taken a surprisingly lenient approach to matters of dishonesty in both of the cases used in the documentary – it was case specific. Although as English lawyers it’s fair to say we were all more familiar with the SDTs custom and practice, that judgment was made relative to the jurisprudence governing both the SDT and the SSDT. It is well established following Bolton v Law Society [1994] 1 WLR 512 that dishonesty normally merits striking off unless there are highly exceptional circumstances. As Sir Thomas Bingham M.R. said (my italics):

Any solicitor who is shown to have discharged his professional duties with anything less than complete integrity, probity and trustworthiness must expect severe sanctions to be imposed upon him by the Solicitors Disciplinary Tribunal. Lapses from the required high standard may, of course, take different forms and be of varying degrees. The most serious involves proven dishonesty, whether or not leading to criminal proceedings and criminal penalties. In such cases the tribunal has almost invariably, no matter how strong the mitigation advanced for the solicitor, ordered that he be struck off the Roll of Solicitors. Only infrequently, particularly in recent years, has it been willing to order the restoration to the Roll of a solicitor against whom serious dishonesty had been established, even after a passage of years, and even where the solicitor had made every effort to re-establish himself and redeem his reputation.

It is my understanding that equivalent principles operate in Scotland: see, eg, Robson v Council of the Law Society of Scotland [2007] CSIH 89; Re Petition of McMahon & Ors [2002] ScotCS 36; in both of these cases Bolton was cited with approval by the Scottish courts.

Disciplinary tribunals, however, are not courts of law, and their decisions in most jurisdictions are not precedents as such, though there is of course an expectation that tribunals should strive for consistency in their own decision-making. The critical question therefore would be whether the SSDTs decisions in Murray and O’Donnell – the two cases the BBC ultimately focused on, were outliers, or whether they reflect a culture of relative leniency towards dishonesty within the SSDT.  This is not an entirely straightforward question to answer but one that has interested me enough in the wake of the programme to undertake some further research which I’ll discuss in the next post.

Bankers: get a moral compass, not a lawyer!

The Barclay’s and Standard Chartered scandals are now starting to shine a rather unwelcome spotlight on the role of banks’ in-house counsel, highlighted in both a recent blog post by Richard Moorhead, and a piece in today’s Financial Times by USD law professor Frank Partnoy.
In theory we don’t expect bank lawyers to behave like bankers. General counsel are supposed to be the institutional conscience, guardians of reputation and (legal) risk managers for corporations. Like all lawyers, they are ethically bound by a principle of independence (check it out – In England and Wales its right up there with integrity in the SRA’s 10 mandatory Principles – there is no opt-out for in-house). Though this is often assumed to be primarily a principle that operates to the benefit of clients (part of what Moorhead aptly calls the ‘client first’ ethos), it is wider than that, and in cases of conflict, the public interest ‘tie-breaker’ would indicate that it should trump the duty to the client (see notes 2.2 and 2.7 to the SRA Principles). This is not to say that being an in-house counsel isn’t a tough gig sometimes. If big clients can put pressure on external law firms to provide the advice they want rather than the advice they need, the pressures in-house, where it is even harder to maintain independence, can be enormous. And dividing lines can be notoriously fine. And no in-house department wants the reputation of being the ‘business prevention unit’… and all sorts of other excuses. But what is worrying Moorhead and Partnoy and me, is the sense that this may not be about the vulnerability of poor little general counsel, it is that they may be far more actively complicit in the whole mess than we would like. Research by Robert Nelson and Laura Beth Nielsen at the start of the last decade pointed to this: they found that inside counsel in large corporations positively worked to demonstrate their commitment to corporate objectives, and tended both to defer to management views of legal risk, and to limit their gatekeeping functions accordingly (‘Cops, Counsel and Entrepreneurs: Constructing the Role of Inside Counsel in Large Corporations’ Law & Society Review, vol 34, 457-94).  In other words, asking your lawyer may not be the substitute for a personal moral compass after all. Let’s hope that one lesson to emerge for both bankers and lawyers from the bank scandals is, as Frank Partnoy observes, that banks need inside counsel with moral backbone.
And there’s more to it than that, for those of us interested in legal ethics the banking scandals usefully serve to highlight the extent to which in-house lawyering has tended to be the poor relation in thinking about ethics and regulation. Profesional codes of conduct are written around private practice; in-house obligations are largely cherry-picked from (or shoe-horned into) those more general principles. In-house work is, one suspects, for most of the time so far below the radar of professional regulatory and disciplinary authorities as to be virtually invisible, and in-house lawyers themselves complain that the general professional legal training provided by LPC and BPTC largely ignore in-house practice. The profession itself could do more to serve the in-house sector better.

Holding a mirror up to nature

Rather belatedly I have caught up with a discussion over at Richard Moorhead’s Lawyer watch blog, in which Richard looks at the College of Law’s new two year LLB and questions the extent to which it is likely to be as different from other LLBs as it claims to be. A critical point in Richard’s argument is that

The real, intellectual difference between the College’s approach and the traditional law school’s approach is most likely between the College’s emphasis on teaching students in the practical utility of law. In the College this is likely to lead to solid practical teaching of solid practical legal skills in determinedly practical contexts. A bit of this is a good thing.  In fact, problem based learning is well established in some undergraduate curricula already.  But to concentrate on this to the exlcusion of everything else?  That gives me concerns.  Students are likely to be well trained in a mechanistic way but will they be inspired?  Will they understand the broader picture? Will they develop critical thinking skills?  The key thing that an excellent University education provides beyond the basics is those moments of inspiration, where the student’s world view may be genuinely transformed.

This post generated a number of interesting responses, including a thoughtful post from the College’s Scott Slorach. Amongst a range of points, Scott takes on Richard’s concern that the College will not address the ‘broader picture’, as follows:  

The broader picture is the understanding of the practical, contemporary contexts in which legal principles are applied in order to facilitate transactions, assert rights, allocate risk, seek remedies, govern businesses, define relationships, and so on. Providing this broader picture of the interests of individuals and businesses, and how practising lawyers use the law to maintain, develop and protect these interests is paramount to a deep understanding. I agree with you entirely that an excellent education should be one which provides the “spark [which] is necessary for life-long learning, commitment to professional ideals and to produce the truly exceptional individuals who can cope with transformative change. It is also necessary for the quality of university as a life experience.” I believe that providing students with the aforementioned broader picture will create an environment where the sparks will be in the form of “Now I see why…”, “So that’s how you can…”, etc. That is, understanding not only what the law is, and why the law is as it is, but, most importantly, how it can be used practically for the benefit of individuals and businesses. It is this latter relevance which can provide understanding and continued motivation to learn from the start.

Now we could, of course, just mutter that there is room for many approaches and respect the virtues of a thousand flowers blooming and leave it at that, but I can’t help but wonder if there isn’t something fundamentally a bit troubling about Scott’s response.

I agree absolutely that degree level education needs to address the various dimensions of “what”, “how” and “why”, but I am concerned that what Scott offers is (i) not necessarily a “broader picture” – though it may be different from what many law schools currently offer – and (ii) both (as that paragraph demonstrates) an elision of the how and the why, and a prioritisation of a particular how that may be ethically troubling. If we present law in a primarily vocational setting that emphasises the ‘use of law for the benefit of individuals and businesses’ that seems to fit rather well with the utilitarian ethos of the times. It is pragmatic in a way that may well attract students focused on their future job prospects, though they may not actually have a great grasp of what will best equip them for the marketplace, and it may be moot whether any law degree presently fits that bill (which is, of course, one of the questions LETR is looking at). But is it what our students, and society, actually need a higher legal education to be?

At the risk of over-simplifying the issues, I worry that Scott risks prioritising a hired gun model of lawyering, by narrowing students’ understanding of the social context in which law operates to the horizon of the prospective client. Doesn’t a deeper and broader understanding of context require a grasp of the wider social functions and moral ambitions of law, and doesn’t the examination of that require some commitment among teachers of law to understanding and researching ‘law in action’ (a wider concept than law in practice?) and, dare I say it, a philosophy of both law and education, not just training? Law degrees probably should engage with the practice of law more, and I absolutely agree that understanding ‘why’ in a practical context can be a really useful trigger. But its not the only one. A wider understanding of the social context enables us to shine a critical light on, not just hold a mirror up to nature. And isn’t that the way it should be?   


The Bottom Line: brought to your desktop every day!

An advertising puff for SOS Connect in Legal Futures recently trumpets the value of its software to a newly merged provincial law firm. Apparently, one of the virtues of the system is that it can be set up automatically to send  ‘performance v budget’ figures to each fee-earner on system start-up. Now I’ve no reason to suspect the firm in question isn’t a lovely place to work, full of commmitted lawyers doing a great job. And I’m sure they’re by no means the first to come up with this idea. But I have to say it would never have occurred to me that something as simple as this could be such a great way to build a culture of “healthy rivalry and competition” (to quote from SOS’s copy). Or that such a culture was necessarily so important to a law firm. I’d be far too bothered that it might encourage fee-earners to objectify clients and regard them as just the next pay cheque, and rather worried about the effect on an underperforming colleague of being confronted by his disappearing bonus/non-promotion/ pending P45 everytime he switches on his PC. But then this is clearly why I’m not part of the cut and thrust of modern practice 😉