SRA warning over sexual misconduct NDAs “put solicitors in difficult position”

Miller: Society’s attitudes have shifted

The Solicitors Regulation Authority’s warning about using non-disclosure agreements (NDAs) in cases of sexual harassment puts solicitors in a difficult position and may even discourage reporting, it has been claimed.

The regulator’s move came on the back of reports about City law firms using NDAs to cover up cases of sexual harassment, although the warning notice applies more broadly.

Leading partnership law specialist Ronnie Fox, of City firm Fox & Partners, argued that the SRA had gone “too far” by threatening disciplinary action against practitioners who propose NDAs, “perhaps on express instructions, which attempt to preclude a party from reporting a potential complaint or allegation, groundless or not, even when both complainant and defendant are keen to close the book on private and unsavoury details of the past and move on”.

Writing in The Times, Mr Fox said that while “only good can come from creating a climate in which the boundaries of what is and what is not acceptable behaviour are widely understood and observed”, there was a danger of unintended consequences.

He explained: “The risk is that after publication of the warning notice, complainants and defendants alike may become more reluctant to expose inappropriate conduct and to involve solicitors in resolving such issues because of the stress, cost, publicity and career-limiting sanctions potentially associated with a regulatory investigation.

“The result might be fewer complaints coming to the attention of the SRA and more victims feeling unable to complain about abusive treatment — the opposite of what the regulator intends.”

Iain Miller, a legal regulation specialist and partner at City firm Kingsley Napley, said changing social mores may mean that more cases of sexual misconduct need to be reported to the SRA than before.

He said it has long been acknowledged that standards of professional conduct change over time – the 1960 version of the SRA Handbook noted that “what is entirely proper for one generation may be slightly irregular for the succeeding generation and highly improper for the next”.

Writing for employment and partnership law firm CM Murray, Mr Miller said: “Whilst very serious cases of sexual misconduct were always required to be reported, society’s attitudes have shifted. Something that may not have seemed reportable a year or more ago will now be reportable.

“In addition, the boundary between conduct in practice and outside practice has become more blurred. Any proper consideration of whether to report has to take account of this shift.”

He added that where a firm decided that it did not need to report, “it may be sensible to document that decision making process and, where appropriate, seek external advice on the issue”.

CM Murray is running a survey on the use of NDAs in sexual misconduct cases.

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