SRA, sexual harassment and misconduct investigation advice

Sexual harassment is defined in the Equality Act 2010 as unwanted conduct of a sexual nature which has the purpose or effect of violating dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment.

In Parliament, the Women and Equalities Select Committee (WESC) published a report on sexual harassment in the workplace on 25 July 2018. WESC said that employers aren’t controlling sexual harassment in the workplace and their regulators aren’t doing enough. Regulatory regimes have a crucial part to play in setting expectations for employers, and the regulators should be doing more.

The SRA in fact acted before the WESC report was published. In March 2018 the SRA issued a warning notice on Non Disclosure Agreements. The warning notice recognised that NDAs can be properly used to protect commercial interests, confidentiality and reputation but the SRA also stated:

‘We are concerned to ensure that you do not:

• use NDAs in circumstances in which the subject of the NDA may, as a result of the use of the NDA, feel unable to notify the SRA or other regulators or law enforcement agencies of conduct which might otherwise be reportable.
• fail to notify the SRA of misconduct, or a serious breach of our regulatory requirements, by any person or firm: including wrong doing by the firm, or harassment or other misconduct towards others such as employees or clients.
• use NDAs as a means of improperly threatening litigation or other adverse consequences, or otherwise exerting inappropriate influence over people not to make disclosures which are protected by statute, or reportable to regulators or law enforcement agencies.’

The SRA’s warning notice stresses that if those requirements are breached, a solicitor could be in breach of a multitude of principles and outcomes including Principle 2 (act with integrity), Principle 6 (maintain public trust in the provision of legal services), Outcome 10.3 (notify the SRA promptly of any serious failure to comply with the professional rules), Outcome 10.4 (report serious misconduct by any person or firm regulated by the SRA, or any employee, manager or owner of any such firm) Outcome 10.7 (don’t prevent anyone from providing information to the SRA) and Outcome 11.1 (don’t take unfair advantage of third parties).

It is important to note that the SRA’s warning notice simply states that NDAs should not be used as a means of exerting undue influence to prevent disclosures to regulators or law enforcement agencies. The WESC report goes further than that and questions whether confidentiality clauses are being improperly used to silence victims of sexual harassment and prevent them making disclosures to any third party, not just regulators and law enforcement agencies.

On 7 September 2018 the SRA sent a letter to the Women and Equalities Select Committee in response to the WESC report. In the letter the SRA said:

• ‘Firms under supervision are routinely asked about the firm’s approach to preventing sexual harassment.
• We will be issuing further guidance to the profession to supplement [the warning notice] covering … not taking unfair advantage of people and the requirement to balance duties in litigation
• We are continuing to engage with law firms to raise awareness of our expectations in relation to sexual harassment and the improper use of NDAs.
• We are also planning to write to firms to ask about their policies and staff training.’

How should law firms respond to the SRA’s warnings on sexual harassment?

The Solicitors Regulation Authority is taking action on sexual harassment in the workplace. To ensure your firm is not in the firing line, consider the following points:

• Ensure the firm has an equality, diversion and inclusion policy that covers sexual harassment in the workplace.
• Ensure the firm has a whistleblowing policy which covers sexual harassment complaints.
• On procedures for prevention of sexual harassment, consider whether to remind staff of the firm’s policies, circulate the warning notice to fee earners and introduce staff training.
• If there is an internal complaint of sexual harassment, ensure the matter is fairly investigated and properly documented (bear in mind the SRA is likely to ask for all correspondence and documents relating to the investigation and any disciplinary proceedings).
• If there is a finding of sexual harassment, the COLP should almost certainly make a report to the SRA. The firm should also consider whether to report the matter to the police and should make a written record of that decision.
• Any Non Disclosure Agreement which the firm enters into with an employee should expressly state that the confidentiality provisions do not prevent any party from reporting any aspect of the matter to the SRA, other regulators, the police and any other law enforcement agencies.
• The firm should satisfy itself that the employee has not been forced to sign an NDA by bullying or undue pressure. It may be worthwhile obtaining a certificate from the employee’s legal representative confirming that the legal representative has informed the employee that the NDA should not be signed if the employee feels under undue pressure to sign it.

What should solicitors do if they are accused of sexual harassment by the SRA or by an employee?

If a solicitor faces an allegation of sexual harassment by an employee in the firm, he should take the allegation very seriously indeed, and be very careful to ensure that his response accurately sets out the position. If he does not do so he is at risk of SRA regulatory action (as well as a complaint by the employee to the Employment Tribunal and possibly also a complaint to the police).

The solicitor should ensure that he collects and preserves any evidence relating to the allegation, including any evidence available from any witnesses to the incident.

If the solicitor is a manager of the firm, he should ensure that he does not have any involvement in the firm’s internal procedures for investigating the matter and making any decisions relating to the complaint.

If the matter is reported to the SRA by the COLP, the solicitor should try to ensure that he is provided with copies of the firm’s report to the SRA and any subsequent correspondence between the firm and the SRA.

The SRA is likely to refer the complaint to a dedicated team which the SRA has set up to deal with sexual harassment cases. There may well be a delay between the report and the date when the SRA contacts the solicitor. That does not mean that the SRA has overlooked the matter. They are likely to obtain information from the firm, the victim and any witnesses before sending an EWW letter to the solicitor asking for an explanation for their conduct and warning that disciplinary action could follow.

If you are the manager of a firm or a solicitor facing SRA disciplinary action as a result of a sexual harassment complaint, we can advise you.