Integrity and ethics

29 October 2019

Why this risk matters

The solicitors' profession depends on trust. If you do not act with integrity, it can harm public confidence in the whole legal system.

Who is at risk?

Solicitors owe duties to:

  • their clients
  • the court
  • their colleagues
  • the wider public interest.

Acting with integrity means more than not being dishonest. It means following the ethical standards of the profession.1 Every aspect of your firm’s business practices and culture should reflect this.

What is the impact?

Both clients and third parties are affected when solicitors bring unjustified cases to courts and Tribunals. This creates unnecessary legal costs and wastes time. It can also lead to cases reaching the wrong outcome.

If you were to let your other interests influence the advice that you give to someone, then this could cause them harm. For example, they may enter a transaction that is not in their interests because they trust the information that they were given by a solicitor.

Failures of integrity can happen because a firm’s culture does not encourage integrity. For instance, junior staff may not feel able to admit to mistakes. That can lead to staff trying to cover up problems rather than the firm being able to remedy them.

We treat cases of a lack of integrity or actual dishonesty particularly seriously. These cases are likely to lead to a referral to the SDT and if proved a serious sanction such as striking off the roll.

Spotlight on leaseholds

Although most houses are freehold, more than a million owner occupied homes are leasehold. More than two thirds of leasehold buyers told a survey for the National Association of Estate Agents that their property had been mis-sold to them.

Two thirds of the surveyed leaseholders had used the solicitor recommended by the developer. Those who used their own solicitor were more likely to understand the issues involved. There have been reports of developers giving buyers incentives to use their recommended solicitor, such as discounts. Some may have suggested that buyers could only use a recommended solicitor. As well as the ethical implications of a solicitor accepting a referral in these circumstances, this suggests their advice was influenced by the interests of the developer.

Buyers of these properties have found themselves in properties that they cannot sell, meaning that they cannot move home if they need to. Many also have lease clauses that allow the freeholder to increase the ground rent. This means that the leaseholders face rapidly increasing costs. Ne\arly half of the leaseholders responding to the survey had not been told about this issue.

Spotlight on harassment and non-disclosure agreements (NDAs)

Harassment and NDAs are still receiving public and political attention. The involvement of solicitors in drawing up NDAs has caused public concern. Some NDAs have given the impression that the victim could not report their situation to the police or to regulatory authorities. This has enabled abusers to continue committing offences without being stopped. It has prevented the victim from seeking help.

NDAs have legitimate uses. However, solicitors must not draft inappropriate terms that have the aim or effect of preventing the reporting of wrongdoing to the appropriate authorities.

We also have concerns about harassment in firms. One survey found that 38% of female lawyers in the UK had been harassed.

We recommend

To help you and your firm comply:

Know your obligations

Acting with integrity is a fundamental principle of the solicitors’ profession. You should understand your obligations in the Code of Conduct.

Keep up to date with our warning notices. We have issued a warning notice about the use of NDAs and have directed solicitors towards guidance on how to handle issues of sexual harassment in a firm.

You must not try to prevent anyone from reporting matters to us or to any other regulator.

Have the right controls

Understand your clients

When you analyse a client’s case, you should be aware of any ways in which your duties as a solicitor might conflict with their instructions.

  • You should be willing to decline to act if following a client’s instructions would mean you have to go against your duties.

Find more information

Our paper on  balancing duties in litigation gives examples of how solicitors’ duties may conflict and how to manage these risks.

What we are doing

Regulating based on evidence

Our new Standards and Regulations focus on ethical standards. They support solicitors to use their own professional judgment.

Taking appropriate action

Our new enforcement strategy sets out the types of conduct that we will and will not accept. It also shows where we consider a particular form of misconduct to be especially serious.

In the first three quarters of 2019, we took regulatory action on 337 matters that involved a solicitor's integrity or ethics and referred 16 cases to the SDT. This compared to 382 in the same period in 2018, when we referred 13 cases to the Tribunal.

We began 37 investigations into reports of sexual harassment in the first three quarters of 2019, compared to 62 in the same period in 2018. We will be bringing three cases before the SDT in the third quarter of 2019.

We have consulted on our policy about when solicitors must report conduct issues to us. This includes guidance relating to NDA and harassment cases. And we have reviewed our whistleblowers’ charter to make clear what we expect of solicitors and how we can protect them if they come forward with concerns.

Helping the public

As part of our contribution to the discussion, we have been liaising with the Equality and Human Rights Commission (EHRC) and the Women and Equalities Select Committee.

Contributing to this discussion helps us raise awareness for the public. This helps them understand what they can expect from legal help.

On the horizon

The Government is considering the introduction of legislation to restrict the scope of NDAs. This may include new enforcement measures, for example making non-compliant NDAs legally void.

The EHRC will publish technical guidance on confidentiality agreements. This will clarify the law relating to these agreements in the workplace. It will help firms identify best practices to follow in drafting NDAs.

We will be keeping our warning notice on NDAs under review in the light of these changes.

The Competition and Markets Authority (CMA) is investigating leasehold mis-selling and unfair terms. The Government has confirmed that it will consider further action in response to the report.

  1. Wingate & Anor v The Solicitors Regulation Authority, [2018] EWCA Civ 366