Post Office scandal – where have lawyers potentially got it wrong?

Background

The Post Office scandal is said to be the biggest miscarriage of justice in English legal history, and involved over 800 sub-postmasters being wrongly prosecuted by the Post Office, a prosecutor in its own right, for theft and false accounting, when it was in fact its own Horizon software system that contained bugs that it had long known about; had it been admitted that these bugs existed it would have been an existential threat to the Post Office’s future.

Sub-postmasters were prosecuted between 2000 – 2015, and many have now had their convictions overturned and are in the process of trying to obtain compensation for their ordeals; this in itself is a scandal as the Post Office is not only trying to delay payment but also to pay as little as it can get away with.

It recently came to light that the Post Office Remuneration Committee had agreed to pay senior executives bonuses for properly engaging with the public inquiry looking into the scandal, and in its annual report 2021/22 said that targets had been met and the inquiry chairman, Sir Wyn Williams, had agreed that this had occurred. This was untrue and the data quoted was incorrect, and the Post Office has since apologized for its misconduct; this new scandal has led to calls for the whole Post Office Board to be sacked for, in effect, paying bonuses using public funds for putting its own misconduct right! ?

The regulation of lawyers

The role of lawyers in the scandal is very much under focus in the public inquiry, and it is clear from the evidence that has been heard so far that lawyers have a lot of questions to answer to the legal sector regulators, in particular the Solicitors Regulation Authority (SRA) and Bar Standards Board (BSB), both of which are Core Participants in the inquiry; but where are the lawyers likely to have gone wrong and be guilty of serious misconduct?

The focus of this article is on lawyers regulated by the Solicitors Regulation Authority.

Professional conduct rules

The lawyers involved in the scandal were employed by the Post Office, either as employees (in-house) or as external legal advisers (private practice); both sets of lawyers were bound by professional conduct rules in place during the period of the scandal.

With the detailed regulations that were in place during the scandal it is hard to see how any lawyer could say they didn’t know what their core obligations were, so why did things go so badly wrong?

It will be seen that the fundamental aspects of conduct remain the same across the various versions of the rules, but have been refined as time has moved on, particularly in 2011 when the rules became based on outcomes rather than prescription; in effect this made lawyers move away from an historic ‘tick box’ regime to one that meant they had to think more about how they were complying and meeting the needs of clients.??

One key thing lawyers have to remember, but often forget, is that where the core duties or principles come into conflict, those which safeguard the wider public interest (such as the rule of law, and public confidence in a trustworthy solicitors’ profession and a safe and effective market for regulated legal services) take precedence over an individual client’s interests; in the context of the Post Office scandal this meant that lawyers should have focused on whether what it was doing was legal/ethical as opposed to what was in its own commercial/reputational best interests.

Solicitors’ Practice Rules 1990 (The guide to the professional conduct of solicitors 1999)

Basic Principles:

A solicitor shall not do anything in the course of practicing as a solicitor, or permit another person to do anything on his or her behalf, which compromises or impairs or is likely to compromise or impair any of the following:

1.??????The solicitor’s independence or integrity;

2.??????A person’s freedom to instruct a solicitor of his or her choice;

3.??????The solicitor’s duty to act in the best interests of the client;

4.??????The good repute of the solicitor or of the solicitors’ profession;

5.??????The solicitor’s proper standard of work;

6.??????The solicitor’s duty to the court.

Key rules/guidance relevant to the scandal:

a.??????Fairness – solicitors must not act, whether in their professional capacity or otherwise, towards anyone in a way which is fraudulent, deceitful or otherwise contrary to their position as solicitors. Nor must solicitors use their position as solicitors to take unfair advantage either for themselves or another person.

b.??????Duty of good faith – a solicitor must act towards other solicitors with frankness and good faith consistent with his or her overriding duty to the client.

c.??????Duty to report another solicitor – a solicitor is under a duty to report to the Office for the Supervision of Solicitors any serious misconduct. Where necessary the solicitor must obtain his or her client’s consent to report the other solicitor.

d.??????Duty not to mislead the court – solicitors who act in litigation, whilst under a duty to do their best for their client, must never deceive or mislead the court.

e.??????Improper allegations – a solicitor must not take or instruct an advocate to make an allegation which is intended only to insult, degrade or annoy the other side, the witness or any other person.

f.???????Client’s perjury – where a client, prior to or in the course of any proceedings, admits to his or her solicitor that the client had committed perjury or misled the court in any material matter in continuing proceedings in relation to those proceedings, the solicitor must decline to act further in the proceedings, unless the client agrees fully to disclose his or her conduct to the court.

g.??????Solicitor for the prosecution – whilst a solicitor prosecuting a criminal case must ensure that every material point is made which supports the prosecution, the evidence must be presented dispassionately and with scrupulous fairness.

h.??????Solicitor for the defence – a solicitor who appears in court for the defence in a criminal case is under a duty to say on behalf of the client what the client should properly say for himself or herself if the client possessed the requisite skill and knowledge. The solicitor has a concurrent duty to ensure that the prosecution discharges the onus place upon it to prove the guilt of the accused.

i.????????Employed (in-house) solicitors – a solicitor employed by a non-solicitor is subject to the same principles of professional conduct as a solicitor in private practice.

j.????????Conflict of interest – employed solicitors must not act in any situation where they would be precluded from acting by an actual or potential conflict of interest.

Solicitors’ Code of Conduct 2007

The core duties:

1.??????Uphold the rule of law and the proper administration of justice;

2.??????Act with integrity;

3.??????Do not allow your independence to be compromised;

4.??????Act in the best interests of each client;

5.??????Provide a good standard of service;

6.??????Do not behave in a way that is likely to diminish the trust the public places in you or the profession.

Key rules/guidance relevant to the scandal:

a.??????Conflicts of interests (in-house lawyer guidance) – if you are employed as an in-house lawyer your employer is your client. The nature of this relationship may cause problems because you do not have the same freedom as a firm would have to decline instructions. There may be occasions, for example, when you are asked to advise your employer in situations where conflict or potential conflict arises between your interests and the interests of your employer. These include:?

????????????????????????????????i.???????????Where your employer asks you to do something which would place you in breach of your professional obligations, for example, to file a document with the court which you know contains false information;

??????????????????????????????ii.???????????Where your employer may act against your advice and, for example, engage in criminal activity which may require you to take action against your employer.

In situations where you are asked to act contrary to your professional obligations then you should not compromise your position and you must refuse to carry out instructions which would have this result, even if ultimately this led to the loss of your job.

b.??????Business management (private practice) – if you are a principal in a firm you must make arrangements for the effective management of the firm as a whole and in particular for:

????????????????????????????????i.???????????Compliance with the duties of a principal in law and conduct, to exercise appropriate supervision over all staff, and ensure adequate supervision and direction of clients’ matters;

??????????????????????????????ii.???????????The identification of conflicts of interests.

c.??????Business management (in-house) – if you are head of an in-house legal department you must institute arrangements that ensure that conflicts of interest are identified.

d.??????Relations with third parties (in-house and private practice) – you must not use your position to take unfair advantage of anyone either for your own benefit or for another person’s benefit; this does not only apply to your actions which arise out of acting for a client. Particular care should be taken when you are dealing with a person who does not have legal representation; you need to find a balance between fulfilling your obligations to you client and not taking advantage of another person. To an extent this limits your duty to act in the best interests of your client.

e.??????Litigation and advocacy (in-house and private practice)

????????????????????????????????i.???????????You must never deceive or knowingly or recklessly mislead the court.

??????????????????????????????ii.???????????You must draw the court’s attention:

a)??????Relevant cases and statutory instruments;

b)?????The contents of any document that has been filed in the proceedings where failure to draw it to the court’s attention might result in the court being misled;

c)??????Any procedural irregularity.

????????????????????????????iii.???????????You must not construct facts supporting your client’s case or draft any documents relating to any proceeding containing:

a)??????Any contention which you do not consider to be properly arguable; or

b)?????Any allegation of fraud unless you are instructed to do so and you have material which you reasonably believe establishes, on the face of it, a case of fraud.

?????????????????????????????iv.???????????You must not become in contempt of court.

??????????????????????????????v.???????????Appearing as an advocate – if you are appearing as an advocate you must not suggest that any person is guilty of a crime, fraud or misconduct unless such allegations:

a)??????Go to a matter in issue which is material to your client’s case; and

b)?????Appear to you to be supported by reasonable grounds.

SRA Code of Conduct 2011

The SRA Principles:

1.??????Uphold the rule of law and the proper administration of justice;

2.??????Act with integrity;

3.??????Do not allow your independence to be compromised;

4.??????Act in the best interests of each client;

5.??????Provide a proper standard of service to you clients;

6.??????Behave in a way that maintains the trust the public places in you and in the provision of legal services;

7.??????Comply with your legal and regulatory obligations and deal with your regulators and ombudsman in an open, timely and co-operative manner;

8.??????Run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles;

9.??????Run your business or carry out you role in the business in a way that encourages equality of opportunity and respect of diversity;

10.??Protect client money and assets.

Key rules/guidance relevant to the scandal:

a.??????Conflicts of interests (in-house and private practice) – you do not act if there is an own interest conflict or a significant risk of an own interest conflict.

b.??????Your client and the court – you must achieve these outcomes:

????????????????????????????????i.???????????You do not attempt to deceive or knowingly or recklessly mislead the court;

??????????????????????????????ii.???????????You are not complicit in another person deceiving or misleading the court;

????????????????????????????iii.???????????You do not place yourself in contempt of court;

?????????????????????????????iv.???????????Where relevant, clients are informed of the circumstances in which your duties to the court outweigh your obligations to you clients;

??????????????????????????????v.???????????You comply with your duties to the court;

?????????????????????????????vi.???????????You ensure that evidence relating to sensitive issues is not misused.

Immediately inform the court, with your client’s consent, if during the course of proceedings you become aware that you have inadvertently misled the court, or ceasing to act if he client does not consent to you informing the court.

c.??????You and your regulator – you report promptly, serious misconduct by an person or firm authorised by the SRA, or any employee, manager or owner of any firm (taking account, where necessary, your duty of confidentiality to your client), and you do not attempt to prevent anyone from providing information to the SRA.

d.??????You and others (in-house and private practice) – you do not take unfair advantage of third parties in either your professional or personal capacity.?

SRA Codes of Conduct for Solicitors and Firms 2019

SRA Principles

You act:

1.??????In a way that upholds the constitutional principle of the rule of law, and the proper administration of justice;

2.??????In a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorized persons;

3.??????With independence;

4.??????With honesty (split out from the previous integrity principle so it could be separately pursued during investigations and prosecutions);

5.??????With integrity;

6.??????In a way that encourages equality, diversity and inclusion;

7.??????In the best interests of each client.

Key rules/guidance relevant to the scandal:

a.??????Maintaining trust and acting fairly (in-house and private practice):

????????????????????????????????i.???????????You do not abuse your position by taking unfair advantage of clients or others.

??????????????????????????????ii.???????????You do not mislead or attempt to mislead your clients, the court or others, either by your own acts of omissions or allowing or being complicit in the acts or omissions of others (including your client).

b.??????Dispute resolution and proceedings before courts, tribunals and inquiries (in-house and private practice)

????????????????????????????????i.???????????You do not misuse or tamper with evidence or attempt to do so.

??????????????????????????????ii.???????????You do not seek to influence the substance of evidence, including generating false evidence or persuading witnesses to change their evidence.

????????????????????????????iii.???????????You only make assertions or put forward statements, representations or submissions to the court or others which are properly arguable.

?????????????????????????????iv.???????????You do not place yourself in contempt of court, and you comply with court orders which place obligations on you.

??????????????????????????????v.???????????You do not waste the court’s time.

c.??????Cooperation and accountability (in-house and private practice):

????????????????????????????????i.???????????You keep up to date with and follow the law and regulation governing the way you work.

??????????????????????????????ii.???????????You are able to justify your decisions and actions in order to demonstrate compliance with your obligations under the SRA’s regulatory arrangements.

????????????????????????????iii.???????????You report promptly to the SRA any facts or matters that you reasonably believe are capable of amounting to a serious breach of their regulatory arrangements by any person regulated by them (including you).

?????????????????????????????iv.???????????Not withstanding (iii) above, you inform the SRA promptly of any facts or matters that you reasonably believe should be brought to its attention in order that it may investigate whether a serious breach of its regulatory arrangements has occurred or otherwise exercise its regulatory powers.

??????????????????????????????v.???????????You do not subject any person to detrimental treatment for making or proposing to make a report or providing or proposing to provide information based on a reasonably held belief, irrespective of whether the SRA subsequently investigates or takes any action in relation to the facts or matters in question.

There are similar obligations placed on private practice firms in the SRA Code of Conduct for Firms that requires them to look at the conduct of non-solicitor lawyers. In addition there are obligations on those holding the roles of Compliance Officer for Legal Practice (COLP) and Compliance Officer for Finance and Administration (COFA), with the COLP being required to ensure compliance by their firm and its managers, employees or interest holders with the SRA’s regulatory arrangements which apply to them (in effect the COLP has ultimate responsibility for compliance, excluding the Solicitors Accounts Rules).

Lessons to be learnt

There are many lessons that need to be learnt from the scandal and the role of lawyers and regulators, and these need to be learnt quickly before another similar scandal occurs; such lessons need to include:

·??????Closer focus by the SRA on the conduct of in-house lawyers and the significant risk of them acting improperly due to the pressure from their employers (clients).

·??????Closer focus by the SRA on the conduct of private practice lawyers around generating fees from clients at the detriment of ethical conduct. ??

·??????Lawyers being required to show how they are complying with their competence statement obligations in relation to their ethical conduct.

·??????Law firms taking a far more robust approach to compliance with professional conduct obligations.

Conclusion

When you look at the professional conduct obligations lawyers had over the years of the scandal, it can be seen that the evidence we are hearing and seeing at the public inquiry is clearly opening them up to accusations of multiple breaches of the above rules, for example:

·??????Being complicit in withholding evidence.

·??????Attempting to get a judge recused because they were unhappy that he was pursuing matters that were unfavourable to the Post Office’s case.

·??????Abusing their positions by making threats to defendants if they didn’t ‘back off’, for example, ‘we will crush you’.

·??????Inappropriate language used in internal documents by a senior lawyer in the Post Office’s criminal law division, “It is to be hoped the case will set a marker to dissuade other defendants from jumping on the Horizon bashing bandwagon”.

·??????Lacking integrity when they knew the background to the Post Office’s position in prosecuting sub-postmasters.

·??????Failing to retain their independence for fear of losing their in-house positions or future Post Office legal work.

·??????By behaving in the way they did, which has diminished the trust the public places in them and the legal profession.

·??????Failing to report matters to the SRA when numerous lawyers clearly knew there were reportable matters, or at least matters that the SRA should have been able to investigate for itself if it was provided with the relevant information.

We are still to hear further evidence about the conduct of lawyers in the phase of the inquiry in June, but it is unlikely to paint a flattering picture of lawyers; based on what we have already heard regulators will clearly have no alternative but to investigate further and take appropriate disciplinary action against those who are found to have acted unethically.

Injustice anywhere is a threat to justice everywhere – Martin Luther King Jr