Yesterday, I gave a speech at the Westminster Legal Policy Forum about the future for legal services regulation.  Part of the question and answer session was reported (identically) by both Solicitors Journal and Managing Partner under the headline ‘Lawyers could have prevented the financial crisis, suggests Stephen Mayson’.  I did not say this, did not intend to say it, and the inference (based on what I did say) is completely false.  Despite my protestations, neither magazine has so far seen fit to change their story.  So here is my response.

My speech (available here) was about the future for legal services regulation.  Some of the propositions I put forward were:

1. That promoting and protecting the public interest should become the predominant and overriding regulatory objective, rather than being one of eight supposedly equal objectives – some of which potentially conflict with it.
2. That we should go further and have promoting and protecting the public interest as an explicit professional principle imposed on all authorised persons (that is, those who carry out reserved legal activities).  I suggested that this could provide a counter-balance to the sometimes aggressive actions of some lawyers taken in the name acting in the best interests of their client.
3. For the future, the current (limited and historically anachronistic) list of reserved activities should be replaced.  On a public interest basis, activities carried on by those acting as ‘officers of the court’ (such as issuing proceedings and exercising rights of audience) should be subject to reservation and require before-the-event accreditation, authorisation or licensing.

In the question-and-answer session afterwards, I was asked a perfectly reasonable question by a senior practitioner about the danger of imposing such a higher public interest duty (particularly where a citizen might be challenging the state and the state would claim to be itself acting in the public interest) and where this might potentially conflict with protecting the client’s interests.

My reply was that there is a danger in any rule or principle (because they can never be designed to cover every eventuality. or motivation).  Nevertheless, in the context of what I had suggested in my speech, if a lawyer is authorised to act as an officer of the court, it seems to me that they should in fact owe a higher duty – first to the public interest (in the rule of law, and the effective and efficient administration of justice), next to the court, and only then to their client.  (As an aside, I would also point out that, in the flotation prospectus for Slater & Gordon, the company explicitly set out a similar hierarchy of duties: there was no reference there to the public interest, but duty to the court and then to clients were placed higher than the normal corporate duty to act in the best interests of shareholders.)

I also made the point that all regulation is a balancing act.  If the state claimed that it was acting in the public interest and a citizen brought legal proceedings against it, the state’s view of what was in the public interest would not necessarily prevail.  The judge would make that decision – a judgement of interpretation and balance for which our judiciary is well-equipped.  I had already acknowledged in the text of my speech that the meaning of ‘the public interest’ is open to interpretation; but that does not present an insurmountable obstacle to having it as a regulatory objective or professional principle.  Nor would it (or should it) prevent the robust representation of a client.

I offered a further thought that, if (like accountants, who have the public interest duty but are still well capable of representing their clients) lawyers had a duty to the public interest, they should then be saying to their clients that, in some circumstances, what they thought was in their own best interests was in fact not (because of wider interests at stake and therefore suggesting a judgement about a client’s ‘enlightened’ best interests).  [I did not elaborate on this, but it could refer to the risk of reputational damage for the client, as well as wasting court time, incurring unnecessary costs in the face of aggressive action that might not be recoverable, and so on.]  The sub-heading to the offending articles reads “Should have advised clients what ‘they ought not to be doing'”.  This is expressed in the past tense: what I actually said was expressed in the future tense.

These were all general comments in relation to the content of my speech and in response to the question asked.  Finally, as a contextual comment, I observed (no more, no less) that one of the questions being asked by others in the context of discussions of professional ethics and the global financial crisis is ‘Where were the lawyers?’.  I did not mention banks.  I made no explicit connection between what lawyers did or did not do, and the financial crisis.

To infer from this that I blamed lawyers for the financial crisis, or that they could have in some way prevented it, is a monumental leap in logic.  It has elided a general argument about a future approach to professional responsibility with a specific but limited reference to a question being posed by others, and produced a different inference.  Not only wrong, but monumentally so.