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Discrimination claims in law firms

Discrimination claims can be as devastating for employers as they are for employees. They divert attention from core business priorities, disturb working relationships and cost a great deal. All employers share this joy but for a solicitors’ practice there is the further jeopardy created by the regulatory regime of the Code of Practice, currently on the point of revision. The way these rules may work will surprise some practitioners and they contain nasty traps that can be overlooked, particularly when settling.

Most lawyers will appreciate that a solicitor who is found to have discriminated may become the subject of an SRA investigation and proceedings before the SDT. But the way the rules are designed needs to be understood. Rule 6 of the current Code and the revised code apply a professional duty not to discriminate on all of the standard grounds mirroring the obligations imposed by the Equality Act. These rules have a life entirely independently of that Act so solicitors not only must comply with the general law relating to discrimination but the professional rules which are additional to and do not substitute the legal duties. The result is, for example, that a tribunal finding that a solicitor has acted in breach of the duty not to discriminate against an employer will also be in a potential breach of the conduct rules. Recently there has been some debate that the proposed new Code might set the bar even higher than the general law by imposing an obligation to discriminate positively. The Law Society has both rejected this suggestion and amended the proposed rule so that it will now say that every solicitor must “run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity.”

What then will the attitude of the SRA be to that solicitor who has fallen foul of the tribunal decision? The answer at present is to be found in Rule 6.2, this says that the finding will be evidence of the breach of the Code. The current guidance makes it clear that this effectively amounts to shifting the burden of proof requiring the solicitor facing charges to prove innocence: “The starting point will be that the decision represents a strong indication that misconduct has taken place and it will be for you to show, why, despite the decision, there has not been misconduct.” The current proposal for the new Code is that it will state that a finding of a tribunal that discrimination has occurred “may tend to show” that there has been no compliance with the principle of non­ discrimination. This may represent a more neutral approach but the space will have to be watched to see if it proves to make any difference in practice. No one wants to condone discrimination but it is important to ensure a proper balance is maintained where the right to practice may be threatened.

Given this background it would be often be unsurprising and sensible for a solicitor accused of discrimination to decide to settle the claim. Many factors encourage this from basic public policy to the disproportionate cost of proving you are right. Again many would want such a settlement recorded in a compromise agreement or a form COT(3) provided by a Conciliator from ACAS as the only way of being sure that statutory claims are finally resolved. Here too there are regulatory layers that need to be kept in mind and which could easily escape notice.

The current Rule 20.7 states that no solicitor should obstruct complaints or enter an agreement that might affect the right of the SRA to investigate conduct. This is also prohibited when acting for clients who are solicitors. The current guidance is that attempting to make such an agreement is a breach of the rule. The proposed new Code is in similar terms. The danger here is that a broadly drafted compromise agreement that attempted to settle all aspects of a complaint and head off any form of further complaint would be ineffective as far as regulatory issues are concerned. Not only that, even attempting to reach such an agreement could be a breach of the Code. It is very common to exclude communications with a regulator from clauses that protect confidentiality. It is less common for the broad­brush elements of a compromise agreement that relate to the bringing of every type of complaint, to be as carefully drafted. It would be galling indeed for the adviser who had signed off such an agreement to learn that both he and his client had thereby created a breach of professional conduct. One also wonders how often it is made clear to solicitor clients that this risk remains alive.

The question then arises about how such claims should be dealt with. Having made sure that the wording of the compromise agreement does not offend the rules what can be done to make sure that the money paid to secure a settlement has actually achieved its purpose? One possibility is that the negotiation with the claimant should require that the employee expressly withdraws the complaint. That will make the negotiation considerably more difficult but if achieved, in the event of any subsequent complaint to the SRA, the complainant would have to explain why, having withdrawn the allegations in return for a payment, he or she is now contradicting that statement by the application to the SRA.

Finally, solicitors are also never the easiest of clients: failure to appreciate the refinements of these rules when acting could also land you with an allegation of negligence. What a pleasure life is as an employment or regulatory lawyer!

This article first appeared in the Law Society Gazette in 2010.


This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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