“Solicitors must put their ethical obligations first and keep their independence. This means that they must not and should not put their own, or their clients', interests above their wider professional obligations to the administration of justice, the rule of law and the courts. Given their professional responsibilities, this means that they should be prepared to decline instructions that would conflict with their obligations.”

Solicitors Regulatory Authority ‘SRA Risk Outlook 2018-19’ SRA Website, 25 July 2018

Explain and discuss in relation to the SRA Codes of Conduct November 2019 and the ethical dilemmas faced by solicitors in corporate practice.

Introduction

It both is, and ought, to be the case that, as a general rule, lawyers’ wider professional interests outweigh their duties to the client, and certainly to themselves. This asymmetry is captured in the SRA Codes of Conduct (as well as other SRA, and relevant documents), certain legislation, and importantly, in the rulings of past real-life cases. In many instances, settling for personal or clients’ interests above ones’ professional obligations, amounts to professional misconduct, warranting disciplinary action. However, there are some genuine conflicts in certain areas, such as between obligations towards wider society, on the one hand, and obligations towards client confidentiality, on the other – such conflicts arising in areas such as tax avoidance. Additionally, the Codes of Conduct are outcome-based, avoiding hard-and-fast rules. They thereby leave notable discretion to the lawyer, and render the solicitor’s course of action somewhat indeterminate. The lawyer-client relationship is complex, and lawyers have a “broad scope of action and discretion about how to do the job, much like an agent.”[1] 

Solicitor’s interests

Little time will be spent dealing with the interests of the solicitor in isolation, since the core of the debate on professional ethics revolves around the tensions and dilemmas between the lawyer-client relationship, on the one hand, and with wider professional obligations, on the other[2]. Nonetheless, it is clearly imperative that solicitors don’t abuse their position for personal benefit. There have been instances of solicitors’ pursuing their own interests at the expense of their clients, as well as the wider profession. For example, solicitors have been responsible for “causing clients to incur unnecessary costs by not being clear about the risks of pursuing a litigation claim or by not making it clear that a solicitor is not needed for some types of claims.”[3] Indeed, a solicitor was fined a record £305,000 for taking ownership of his client’s house in return for paying for her care and living costs.[4] David Middleton, who at the time was the SRA’s executive director, stated, “he should have ensured that she seek independent advice at the outset because he stood to gain financially and therefore there was a clear conflict of interest.”[5]

The Codes make it clear that solicitors, “do not unfairly discriminate by allowing your personal views to affect your professional relationships and the way in which you provide your services”. (1.1)[6], should not “abuse your position by taking unfair advantage of clients or others” (1.2)[7], and “do not act if there is an own interest conflict or a significant risk of such a conflict” (6.1)[8], among others. The actions of the solicitor must therefore be regulated, to a large extent, by both the demands of the profession, and by the client’s wishes and dignity, and directions declined accordingly. Sir Thomas Bingham, in the case of Bolton v Law Society, stated that “the reputation of the profession is more important than the fortunes of any individual member. Membership of a profession brings many benefits, but that is part of the price”[9]. I will leave Bingham’s remark as a conspicuous synopsis of the relative import of the solicitor’s personal interests in professional legal practice. Solicitors’ individual interests are largely superseded by their professional obligations.

Confidentiality v Disclosure

The Codes state “you are subject to the overriding obligation to protect… client’s best interests” (3.1)[10]. Principle 7 states that lawyers should act “in the best interests of each client”.[11] In addition, section 1(3)(e) of the Legal Services Act 2007 states the duty to ensure “that the affairs of clients should be kept confidential.”[12] Confidentiality is a central pillar of firms’ and solicitors’ ethical legal practice. If clients cannot be confident that the information divulged to solicitors remains confidential, then their trust in the legal profession will be undermined.

Despite this, lawyers are not free to fulfil their client’s every whim, and indeed, it may not be the case that confidentiality is universally in the client’s best interests. In cases of tax minimising and avoidance (wherein confidentiality conflicts with the interest of disclosing information to the wider society), the interests of society often win out. Section (6.3) of the Codes of Conduct state that matters should be kept “confidential unless disclosure is required or permitted by law or the client consents.”[13] Additionally, the details of certain types of tax avoidance schemes must be disclosed to HM Revenue and Customs under The Finance Act 2004, superseding standard confidentiality[14].  SRA Principles 1, 2, 4 and 5 (administration of justice, public trust and confidence, honesty, integrity) could also be said to encourage disclosure.[15] 

No duty of confidentiality applies to a solicitor if the client seeks to perpetrate fraud or any criminal activity. The case of Gartside v Outram held that “there is no confidence as to the disclosure of an iniquity. You cannot make me the confident of a crime or fraud, and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention on your part.”[16] Confidentiality can be waived if there is legal necessity or permission, or if the client consents. The wider societal impact of tax avoidance, such as reduced funding for public services, justifies solicitors in challenging the client, and not “just following orders.”[17] Wider obligations, in this respect, take precedent over the client’s interests.

Nonetheless, many companies and individuals have employed, and continue to employ, intricate procedures to reduce and not pay tax – demonstrated most notably by the leak of the Panama[18] and Paradise Papers[19]. There are still many ways to legally avoid tax, and there is no hard-and-fast rule for how lawyers should balance clients’ interest with wider societal interests. This is exacerbated by the fact that there is no clear definition given of client’s ‘best interests’ – as mentioned in Code (3.1), and Principle 7. Firms can claim, and have claimed, that they are both abiding by the law, and acting with the clients’ best interests in mind – a case in point being Appleby.[20] 

To summarise on the topic of confidentiality, the Codes, the Principles, as well as certain pieces of Legislation, such as The Finance Act 2004, weigh, in broad-stroke, in favour of wider-societal interests over confidentiality. Nonetheless, the broadness of the Codes, combined with the complexity of real-life cases, leave the balance between confidentiality and the protection of wider-societal interests, to a large extent, open to the discretion of the lawyer. The correct balance is subject to the specific details of the work involved in the specific lawyer-client relationship in question.

Obligations to Court

Alan Paterson writes, “the lawyer is a key player in the justice system with obligations not simply to clients, fellow professionals, witnesses and other third parties, but also to the court.”[21]  For Ipp, lawyers’ duties cover: ‘(1) a general duty to conduct cases efficiently and expeditiously, (2) a general duty not to abuse the court process, (3) a general duty of disclosure owed to the court, and (4) a general duty not to interfere with the administration of justice.’[22]  Section 2 in the Codes is dedicated to solicitors’ conduct in relation to the courts, and includes seven standards.  Three of the standards are: not misusing or tampering with evidence, being in contempt of court, or wasting court time.[23]  Lawyers are therefore greatly restrained in their capacity to pursue their clients’ interests by their duties to the court.

Lord Judge CJ pronounced in R v Farooqi that “the advocate is not the client’s mouthpiece obliged to conduct the case in accordance with whatever the client instructs him”, going on to say, “the advocate and the advocate alone remains responsible for the forensic decisions and strategy”[24].  Lawyers are therefore not obliged to obey clients’ instructions, and indeed, may advise the client that their wishes are at variance with the law, or with court proceedings.  Indeed, the Solicitors Disciplinary Tribunal ruled that solicitors “must and should on occasion be prepared to say to their client ‘what you seek to do may be legal but I am not prepared to help you do it.”[25] 

In Brett v Solicitors Regulation Authority, the court noted many ways in which Mr Brett might not have deceived the court, at the cost of breaking his duty of confidentiality, thereby highlighting the advantage of the court over client confidentiality and client obligation.  Mr. Justice Wilke claimed that Mr. Brett had ‘recklessly’ mislead the court, leaving the Solicitors’ Disciplinary Tribunal decision unchanged.[26]  The severity of misleading the court cannot be understated; indeed, Lord Thomas said that misleading the court “must be regarded… as one of the most serious offences that an advocate or litigator can commit.”[27] 

Solicitor’s duties to the court outweigh personal and client duties, and the solicitor should be prepared to decline instructions that conflict with clients’ interests: ‘lawyer's duties to the client can be overridden by their higher obligation to the courts… [lawyers] will compromise their devotion to their clients’ interests.’[28]

Conclusion 

Interests of the wider-profession, courts, and society at large, take pre-eminence over client interests, and certainly personal interests. This fact is demonstrated in the Codes, the Principles, legislation, and past real-life cases. Solicitors “are not ‘hired guns’ whose only duty is to the client. They also owe duties to the courts, third parties and public interests”[29]; indeed, these latter duties, on balance, outweigh the former. The very fact that ignoring professional obligations, or misleading the courts, can lead to stern consequences, is proof of this imbalance. Nonetheless, we have seen that balancing these duties is complex, given the intricacies of individual cases, and given that the Codes offer a large degree of personal discretion. Ultimately, the lawyer should act with integrity, and this is this value that should be used in maintaining a healthy balance between conflicting duties.

Bibliography

Primary Sources

Solicitors Regulation Authority, Balancing Duties in Litigation, November 2018, https://www.sra.org.uk/globalassets/documents/solicitors/freedom-in-practice/balancing-duties-in-litigation.pdf?version=4a1abd p.3, 2018/2019

Solicitors Regulation Authority, 25 November 2019 SRA Codes of Conduct for Firms https://www.sra.org.uk/solicitors/standards-regulations/code-conduct-firms/

Solicitors Regulation Authority, SRA Codes of Conduct for Solicitors, RELs and RFLs, 25 November 2019: https://www.sra.org.uk/solicitors/standards-regulations/code-conduct-solicitors/   

Solicitors Regulation Authority, SRA Principles, 25 November 2019: https://www.sra.org.uk/solicitors/standards-regulations/principles/

Solicitors Regulation Authority, SRA Risk Outlook, 2018,2019: https://www.sra.org.uk/globalassets/documents/solicitors/freedom-in-practice/risk-outlook-2018-19.pdf?version=4a1abf

Cases

Bolton v The Law Society (1994) 1 WLR 512

Brett v The Solicitors Regulation Authority (2014) EWHC 2971

Gartside v Outram, (1857) 26 LJ Ch (NS) 113

Simms v The Law Society (2005) EWHC 408

Legislation

Legal Services Act 2008 http://www.legislation.gov.uk/ukpga/2007/29/pdfs/ukpga_20070029_en.pdf

Secondary Sources

Books

Boon A, The Ethics and Conduct of Lawyers in England and Wales, (3^rd Edition, Hart Publishing 2014)

Boon A, Lawyers’ Ethics and Professional Responsibility, (Hart Publishing, 2015)

Herring J, Legal Ethics (2^nd Edition Oxford University Press, 2017)

Hutchinson A, Fighting Fair: Legal Ethics for an Adversarial Age, (Cambridge University Press, 2015)

Articles

Fitzgibbon W, ‘Appleby, the offshore law firm with a record of compliance failures’, https://www.irishtimes.com/business/appleby-the-offshore-law-firm-with-a-record-of-compliance-failures-1.3280860, (The Irish Times, 5 Nov 2017)

Bindman D, ‘SDT fines “appalling” solicitor record £305,000’, https://www.legalfutures.co.uk/latest-news/sdt-gives-record-fine-to-appalling-solicitor, 25^th March 2015

Garside J, Watt H and Pegg D, ‘The Panama Papers: how the world’s rich and famous hide their money offshore’, https://www.theguardian.com/news/2016/apr/03/the-panama-papers-how-the-worlds-rich-and-famous-hide-their-money-offshore, Sun 3 Apr 2016 18.50 BST

Hilborne N, ‘LCJ uses Nightjack case to warn lawyers who mislead court of “exemplary punishments”’, https://www.legalfutures.co.uk/latest-news/lcj-uses-nightjack-case-warn-lawyers-mislead-court-exemplary-punishments, (Legal Futures, 12 September 2014)

Ipp D. A, ‘Lawyers’ Duties to the Court’, (114), (The Law Quarterly Review, 1998)

Jamieson B, ‘Bill Jamieson: is it so bad to avoid tax within the law?’, https://www.scotsman.com/news-2-15012/bill-jamieson-is-it-so-bad-to-avoid-tax-within-the-law-1-4608429, Published: 06:00 Updated: 09:13 Thursday 09 November 2017

Paterson A, Duties to the Court, https://strathprints.strath.ac.uk/4793/1/strathprints004793.pdf, 21^st Nov 2007