Orpin: Reinforcing public trust
New requirements to strengthen ethical standards now expressly state that lawyers must place their duties to the court, and to act with independence and integrity, above the duty to act in the best interests of their client, where they conflict.
The Legal Services Board’s statutory statement of policy on upholding professional ethical duties also makes clear that they apply to all staff working within law firms and not just authorised lawyers.
The statement of policy [1], published today after consultation [2], sets out a definition of “professional ethical duties”.
This is that: “Authorised persons have a duty to act with independence and integrity; maintain proper standards of work; keep the affairs of clients confidential; and comply with their duty to the court to act with independence in the interests of justice.
“Subject to the fact that they must place their duty to the court and their duty to act with independence and integrity above the duty to act in the best interests of their client where these may come into conflict, these duties are not presented in order of precedence.”
This has been amended following the consultation to prioritise the duties to the court and to act with independence.
In its response to the consultation [3], also published today, the oversight regulator said: “While many authorised persons likely understand that acting in their client’s best interests means acting in their objective best interests, our evidence suggests this is not universal.
“Some professionals over-emphasise the duty to act in the client’s best interests. This indicates that some authorised persons do not understand that the duty to act in the client’s best interests means providing objectively sound advice.”
This meant articulating that “not all duties have equal weight and some duties override others” when they came into conflict.
Some consultation respondents wanted the LSB to go further and include a public interest requirement that incorporated social justice and morality considerations.
“However, it is not the role of the LSB to compel lawyers to adopt political or social positions which might run contrary to clients’ lawful aims,” it said.
“Such a restriction might prevent legal professionals from giving balanced and independent advice on socially controversial matters, even when legally permissible. While certain types of legal work or advice might be unpalatable to some, it is for lawmakers to specify whether they are lawful to pursue.”
The LSB said the evidence identified “a clear need” for greater support from regulators to “empower authorised persons, their managers and/or employees to prevent and call out failures to uphold professional ethical duties when it happens in their workplace”.
The statement sets out five outcomes that each frontline regulator needs to achieve, accompanied by a series of expectations for how they will do so.
They are:
- Outcome 1: authorised persons have the right knowledge and skills on professional ethical duties, both in their preparation for qualification, and throughout their career.
- Outcome 2: regulators have a framework of rules, regulations, guidance and other resources which make clear professional ethical duties are integral to the way authorised persons are expected to behave and act throughout their careers.
- Outcome 3: authorised persons are supported and empowered to uphold their professional ethical duties, including when they are challenged.
- Outcome 4: regulators identify and use appropriate tools and processes to monitor and supervise the conduct of authorised persons, and where necessary take effective action to address non-compliance with professional ethical duties.
- Outcome 5: regulators regularly evaluate the impact of their measures to pursue outcomes 1 to 4 above and make changes, if required, to ensure that they remain fit for purpose.
Each regulator has six months to publish a plan on how they are going to implement the statement and then 18 months to achieve the first three outcomes, and a further two years for the other two.
On outcome 1, the LSB said there was “a gap in the regulatory framework” which showed that, while codes of conduct established professional ethical standards, they required reinforcement through adequate education, training and regulatory support. “Our evidence showed this was not always achieved in practice.”
Among the expectations for outcome 3 is that regulators must ensure authorised firms and self-employed authorised persons working together and sharing resources have internal reporting-up policies and/or guidance to establish “a clear line of accountability”.
The LSB agreed with consultation responses that the statement of policy should apply to all “regulated persons”, which includes non-authorised persons who are managers or employees of an authorised person.
“We agree that unauthorised, regulated persons can influence organisational culture within a regulated firm and can potentially support or hinder ethical conduct by authorised persons.”
The LSB also confirmed that it was looking to create a Professional Ethics Network “to share learnings, best practice and policy implementation approaches”.
Chief executive Richard Orpin said: “These important steps to strengthen legal ethics will help to reinforce public trust, support the rule of law, and ensure legal services better serve the public interest and the wider economy.”