The Solicitors Regulation Authority (SRA) has launched a public consultation to inform changes to rules underpinning the reporting of misconduct as the industry claims a lack of clarity around the use of non-disclosure agreements (NDAs).
The regulator today (2 August) will kick-start the consultation, aimed at ‘providing clarity around the practical judgements that compliance officers, solicitors and firms must take when deciding when and if to report a potential serious breach of our rules to us’, states the consultation document.
The move comes just a week after the Women and Equalities Committee published its report on sexual harassment in the workplace, criticising regulators and employers for failing to tackle sexual harassment and calling for a clampdown on the misuse of gagging orders.
Citing the reasons for the consultation, the SRA said: ‘In recent discussions with firms and individuals around the use of non-disclosure agreements it has become clear that understanding of when their duty to report a potential breach is triggered can differ.
‘Some suggest that the obligation to report only arises once they have determined within the firm that regulatory misconduct has indeed occurred. Others believe that they should report any potential breach much earlier.
‘We want to make sure there is greater clarity about this issue, so all firms better understand their regulatory obligations over what, and when, they should report.’
At a press conference on Wednesday, SRA chief executive Paul Philip stressed: ‘The sexual misconduct and NDA issues were never really the drivers behind what we are doing [with the consultation].
‘The purpose is to try as clarify the types of things we would expect to know about in terms of misconduct.’
SRA executive director Crispin Passmore added: ‘It’s not just around sexual misconduct. It’s a wider discussion to promote a mature and grown up relationship between us and the firms.’
The select committee’s recent report was the culmination of an enquiry launched in the wake of the #MeToo movement that saw the legal profession’s handling of these situations thrust into uncomfortable focus.
Among other things, it called for regulators to take a more active role in tackling sexual harassment in the workplace. This should include ‘setting out the actions they will take to help tackle this problem, including the enforcement action they will take; and by making it clear to those they regulate that sexual harassment is a breach of professional standards and a reportable offence with sanctions.’
That recommendation came after the SRA was criticised during a select committee hearing in April when it was discovered that the regulator failed to investigate A&O’s conduct in drafting an NDA for disgraced Hollywood mogul Harvey Weinstein when it had the chance last November.
In the report, the committee states it was ‘particularly disappointed by apparent lack of rigour in the SRA’s approach to investigating whether there had been unethical practice by the lawyers involved in the Zelda Perkins case.’
In April, MP Philip Davis chastised the SRA for not pursuing the investigation sooner, labelling the regulator’s relationship with the Magic Circle firm as ‘like some sort of cosy old boys network… where they’re scratching each other’s backs and not really taking anything seriously.’
The SRA in March issued a warning notice reminding lawyers of their responsibility to ensure that these agreements are not used to prevent parties from reporting to the regulator or the police in the event of alleged sexual misconduct; shouldn’t prevent the person having a copy of the NDA or making a protected disclosure; and shouldn’t be used to prevent the person from co-operating with a criminal investigation.
The eight-week consultation will run until 27 September, after which the SRA will update its code of conduct to reflect any new wording in this area. This wording will then be submitted for approval to the Legal Services Board, which is due to consider wider changes to the SRA’s rules and codes of conduct as part of its regulatory reform programme.