It has now been more than a year since the SRA introduced new rules into the Codes of Conduct for Individuals and Firms in relation to the treatment of colleagues. In this news alert, our regulatory and professional discipline partner, Andrew Pavlovic considers how firms are getting to grips with the new rules and the practical challenges that have arisen.
The new rules
By way of reminder, the rules introduced into the Code of Conduct at the end of April 2023 were as follows (“the New Rules”):
Rule 1.5. You treat colleagues fairly and with respect. You do not bully or harass them or discriminate unfairly against them. If you are a manager you challenge behaviour that does not meet this standard.
Rule 1.6. You treat those who work for and with you fairly and with respect, and do not bully or harass them or discriminate unfairly against them. You require your employees to meet this standard.
Prior to the introduction of the New Rules, there were no provisions in the Codes of Conduct expressly relating to the treatment of colleagues. This meant that, where allegations of workplace harassment/discrimination etc. involving colleagues were made, this fell to be dealt with by reference to SRA Principles requiring that solicitors act in a way which upholds public confidence in the profession (Principle 2), and in a way which encourages equality, diversity and inclusion (Principle 6), as well as a Code of Conduct provision providing that solicitors should not take unfair advantage of others (Rule 1.2) which could be difficult to apply in cases where there was no abuse of seniority or position.
The New Rules were introduced following the issuing of the SRA’s thematic review and guidance on workplace environments in February 2022 (“The Thematic Review”). The Thematic Review identified a concern that regulatory misconduct was more likely to occur, or remain undetected, if an individual was working in an environment where they were afraid to speak up if they made a mistake, were subject to bullying or harassment, or were being overworked and/or inadequately supervised.
How have firms responded to the new rules
Many firms have delivered training on the New Rules. Some have focussed their training on partners, given the obligation to challenge behaviour applies only to them, considering issues such as how and when to challenge and what follow up action may be required (including the thorny issue of how challenges should be recoded, and by whom).
In addition to partner training, firms have also provided wider training to all solicitors and staff, on the basis that the requirement to treat colleagues fairly applies to all solicitors, and Rule 1.6 requires firms to ensure all employees meet the standard, meaning all individuals working within the firm have to be aware of it.
Alongside training, firms have also considered whether their policies require updating in light of the New Rules. Some firms have introduced specific “Unfair Treatment” policies, providing guidance on how behaviour should be challenged and introducing specific mechanisms for the reporting of challenges and/or unfair treatment. Others have updated existing anti-harassment/equivalent policies to make clear the SRA’s expectations. Some policies provide that a failure to challenge unfair treatment could, in addition to engaging the New Rules, be a basis for disciplinary action.
What we are seeing so far
So far we have seen a number of cases which have either engaged the New Rules, or have required consideration in light of them. In the course of reviewing those cases some interesting themes have emerged:
Unfair treatment/harassment – The SRA’s Workplace Environment Guidance (“the Guidance”) states that when assessing the seriousness of any conduct (bearing in mind that only potentially serious breaches need to be self reported) individuals should consider, among other things, “(w)hether the behaviour could reasonably be seen by others as intended to bully, belittle, harass, intimidate, undermine or take advantage of colleagues”.
By contrast, the Equality Act 2010 definition of harassment applies where the unwanted conduct has the “purpose or effect” of creating an intimidating, hostile, degrading, humiliating or offensive environment, meaning that harassment could occur unintentionally. It is accordingly possible that an isolated allegation of harassment may not meet the reporting threshold, albeit regard would have to be had to other relevant factors such as whether there was an abuse of position.
Discrimination – The New Rules require firms and individuals to not “discriminate unfairly” against colleagues. However there is no reference to “unfair” in the statutory definition of discrimination contained in the Equality Act 2010. It is not immediately clear how it would be possible to fairly discriminate against a colleague, however the insertion of this additional wording is presumably deliberate and suggests a higher standard.
Weaponisation – A concern was raised that the New Rules would be weaponised by disgruntled employees/partners, looking to leverage their position in settlement discussions, by alleging regulatory breaches in addition to or as part of any proposed employment claim. So far we have seen only limited evidence of this. Raising allegations of regulatory breaches in negotiations is in any event a risky thing to do, given the strict reporting obligations on solicitors, and threats to report to the regulator should never be made in order to exert pressure in negotiations (and doing so may in itself amount to a serious breach of the Code of the Conduct).
Long hours – Concerns have been expressed about the indication in the Guidance that the SRA are likely to take action against firms that impose “wholly unreasonable workloads or targets” on their staff. Whilst the SRA do emphasise in the Guidance that they do not direct the working practices or procedures that firms and the individuals working in firms should adopt, and acknowledge that practising law can involve long hours and heavy workloads, firms are increasingly alive to the issues that this can cause, and that a failure to spot issues in relation to an individual who goes on to commit some form of regulatory misconduct could present issues for the firm. This has placed a heightened focus on effective supervision, including partner supervision, in order to attempt to pre-empt any potential issues.
Self reporting
Allegations of unfair treatment in law firms are not uncommon. For example, in the course of an employee/partner leaving a firm, which often arise in the context of performance concerns, the outgoing employee/partner may raise concerns regarding their targets or their work allocation. Whilst the Guidance makes clear that issues such as these are not caught by the New Rules, the position becomes more complicated when an individual alleges, for example, that they have been given less lucrative/high quality work than others because of a protected characteristic, or that they have been given higher targets or been subject to greater scrutiny than others without that characteristic.
When such allegations are made then consideration needs to be given as to whether there is a requirement to self report the conduct to the SRA. In a recent case (SRA v Bhatia, Case No. 12408-2022) a solicitor was reprimanded by the Solicitors Disciplinary Tribunal for failing to report to the SRA that his firm had been found by an Employment Tribunal to have discriminated against an employee on the grounds of pregnancy and maternity. Whilst this decision, which concerned the self-reporting obligations under the 2011 Code, suggests that adverse findings should be reported, the question arises as to whether a report should be made earlier, such as upon the commencement of Employment Tribunal proceedings, or even at the stage of an initial ACAS notification.
Clearly much will depend on the nature of the allegation/s. In a case study accompanying the Guidance, the SRA state that even a successful employment tribunal claim would not itself be a sufficient reason to trigger a regulatory investigation. Nevertheless, where employment tribunal proceedings are in contemplation, firms should be able to demonstrate that they have considered and documented their decisions on self reporting, and be alive to the particular risk factors indicated in the Guidance:
- Allegations of direct discrimination/counter-inclusive behaviour
- Allegations of victimisation
- Allegations of repeated and intentional unfair behaviour (as opposed to isolated incidents)
- Allegations that complaints have not been properly investigated/addressed
- Allegations that other senior individuals in the firm have failed to challenge behaviour.
What’s next?
Firms with relationship managers have recently been visited by the SRA. The purpose of those meetings was to enable the SRA to collate data and information about workplace incidents, as well as to seek to identify examples of best practice, be that in relation to training for staff, complaints handling, identifying and managing mental health concerns, or creating a safe and inclusive environment. It is understood that the information collected from these visits will be presented in a thematic review published later this year.
Pending the publication of that review, and whilst we await SRA decisions/Tribunal Judgments to provide a further indication as to the sorts of matters that the SRA will sanction and/or prosecute, firms should be considering the following:
- Training/Policies – If firms have not undertaken training and/or a review of their policies then they should do so. Firms that have undertaken training should reflect on the last year and consider whether the training needs to be refreshed/updated to address any particular points which may have emerged. Similarly, now may be an appropriate time to review policies to see how they have worked in practice.
- Documentation of decision making – Given the current uncertainty regarding the SRA’s application of the new rules, firms should be carefully documenting their decision making on self reporting whenever allegations of unfair treatment, discrimination etc. are raised.
In summary, whilst we have only seen a handful of cases engaging the New Rules so far, it is clear that they are having an impact, and that workplace culture is and will remain high on law firms’ agendas for some time to come.
If you have any questions in relation to the SRA’s new rules on the treatment of colleagues or would like to discuss further, please contact Partner Andrew Pavlovic, who specialises in professional discipline and regulatory law.
