The Solicitors Regulation Authority should make it clear that it will get tough on solicitors who do not meet the high ethical standards expected of lawyers when drafting non-disclosure agreements (NDAs), a group of MPs says today. In a major report on NDAs in discrimination cases, the House of Commons women and equalities select committee says the Law Society should revisit its guidance on NDAs.
Conservative Maria Miller, chair of the committee, said organisations have a duty of care to provide a safe place of work for staff, including protection from unlawful discrimination.
Today's report states that guidance from regulators and other sources such as Acas must do more to highlight the responsibilities of lawyers, professionals and managers to 'report up' to senior managers and boards any concerns they may have about systemic issues with culture and discrimination, or about repeated or 'especially worrying' allegations of improper behaviour by a particular individual or in a particular business area.
The SRA should also consider drafting guidance for lawyers 'on reporting up within their own firm and their client organisations, including on how to balance this with their other professional obligations'.
The profession's regulators 'must make it clear to those they regulate that they will take rigorous enforcement action' if they become aware of 'actions and behaviours that do not meet the high ethical standards expected of legal professionals. This should be set out in guidance and followed up by appropriate action'.
Last year the regulator warned solicitors that people reporting sexual misconduct should not be gagged by NDAs. This was followed by a practice note from the Law Society reminding solicitors drafting NDAs on employment severance settlements that, in any conflict of principles, the public interest in the proper administration of justice must come first.
Last month David Greene, the Society's deputy vice president, said that, alongside the practice note, Chancery Lane is 'working on all the issues raised in the current debate on NDAs in the interests of the profession and the public'.
The Society said today: 'We have sought to lead an open and frank discussion within the legal community about the use of NDAs and confidentiality clauses. This includes supporting solicitors to navigate the complex, legal, regulatory and ethical boundaries. As the committee's report sets out, a number of improvements can be made to protect employees more effectively, such as widening access to legal aid and improving the tribunal process. We regularly review our guidance to solicitors and update as law and regulations evolve.'
The committee repeated a previous recommendation that provisions in confidentiality agreements that can reasonably be regarded as potentially unenforceable 'should be clearly understood to be a professional disciplinary offence for lawyers advising on such agreements'.
The committee was 'particularly struck' by the evidence it heard that NDAs are used so routinely when settling discrimination and harassment cases, and other employment disputes, 'that many employers and lawyers believe them to be integral to settlement agreements'. Lawyers were told they 'must think more carefully about why they are requesting confidentiality and whether it is needed at all'.