Published in The Times The Brief on 16 March 2018

Outlawing non-disclosure agreements might deter victims from coming forward for fear of the costs and stress of a regulatory investigation, writes Ronnie Fox.

The warning notice published by the Solicitors Regulation Authority (SRA) on Monday threatens disciplinary action against lawyers who recommend non-disclosure agreements in sexual harassment cases.

But experience of advising organisations alleged to have condoned sexual harassment, abuse of power or other inappropriate behaviour, as well as the individuals said to be responsible and the complainants, shows that there are always (at least) two sides to every story.

The English tradition is that an accused is entitled, morally and legally, to be treated as innocent until proven guilty. So the evidence must be carefully examined.

I am troubled to read in the warning notice that “failure to report actual or suspected misconduct, or other wrongdoing or criminal conduct, or failure to report wrongdoing that is subject to an NDA, may put you in breach of” SRA principles.

To advise properly, solicitors need to examine the factual background, the relevant evidence and their client’s objectives. Almost invariably the prime objective of those whom we advise in cases of this kind — whether victims claiming that they have been harassed sexually or punished for blowing the whistle, or those alleged to be at fault — is to reach a rapid and confidential resolution of the issues.

Undertakings not to bring any official complaint or publicise the issues, subject to overriding legal and regulatory requirements, usually form part of any settlement agreement. Reaching a confidential compromise which all parties regard as fair and acceptable in the circumstances is the route to avoiding lengthy, stressful and expensive investigations by law enforcement or regulatory authorities.

The SRA goes too far by threatening disciplinary action against practitioners who propose non-disclosure agreements, perhaps on express instructions, which attempt to preclude a party from reporting a potential complaint or allegation, groundless or not, even when both complainant and defendant are keen to close the book on private and unsavoury details of the past and move on.

Nobody could justify the abuse of power or sexual misconduct of which those in entertainment and politics have been accused recently. Only good can come from creating a climate in which the boundaries of what is and what is not acceptable behaviour are widely understood and observed.

My concern is that the warning notice may prove counterproductive. Nobody has considered the law of unintended consequences.

The SRA notes “low levels of reporting of inappropriate sexual behaviour” and observes regretfully that it has received relatively few complaints. The risk is that after publication of the warning notice, complainants and defendants alike may become more reluctant to expose inappropriate conduct and to involve solicitors in resolving such issues because of the stress, cost, publicity and career-limiting sanctions potentially associated with a regulatory investigation.

The result might be fewer complaints coming to the attention of the SRA and more victims feeling unable to complain about abusive treatment — the opposite of what the regulator intends.

 

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