In Chapter 6 I suggested that lawyers had a problem with excessive zeal and how its encouragement of contentious, self-serving interpretations of law and facts, coupled with scripts borne of zeal’s sister concepts, such as the claim we ‘do law and not morality’, make misconduct more likely still. A shallow, somewhat complacent idea of professionalism and the ordinary frailty of human decision-making also undermines lawyers’ objectivity. That objectivity is, I would suggest, an essential constituent of any lawyer’s professionally mandated independence. Clients need it, sometimes more than they appreciate. And we saw how aggressive zeal can slide down a slippery slope into misconduct, taking lawyers beyond honesty and legality.
This chapter is about how such risks are magnified within organisations. Its aim is to show how the approaches lawyers offer and how lawyers are used can pollute rather than protect organisations. I emphasise organisational clients because the social and legal complexities of being artificial agents hosting individuals with their own interests and vulnerabilities add extra dimensions to the problems posed by an overly close lawyer–client relationship. Organisations also operate bureaucratically, across time and space. Legal work helps structure those operations, bridging time and space in ways that rewrite history and geography. We saw an example earlier in the way the contract between POL and the SPMs helped structure and manage unfair treatment as legal and normal. Prosecutions led to software errors being misdiagnosed as theft in ways that the organisation would not retract, and this dominated significant aspects of its governance and management.
At one level, my argument in this chapter is very simple: organisations often want, and lawyers will too often provide, slanted signals about facts, legality, and propriety. We can see the point if we think of two features of the legal relationship that emerged in the last chapter: lawyers keep certain information confidential for their clients (through privilege), and they can interpret situations in the best interests of their client in ways that are or border on the tendentious. The interaction of these two things leads to the discounting of – ignoring of, even – adverse confidential information and the exaggeration of positive interpretations.
In court, if the advocate does not mislead the court or their opponents, the slanting of the client’s story is understood as part of the game within limits and, in theory at least, any interpretive position offered by the advocate is tested by their opponent and the judge. In other advocacy situations some slanting of signals is also understood to be occurring and acceptable. If I am negotiating with you, for instance, your positions are treated with a measure of scepticism. If the lawyer does not mislead their opponent, then their approach is within the bounds of the reasonable.
But when advising the client, if a lawyer can imply that X is legal or Y is true when it is probably not, then the situation is different. Clients are going to make bad decisions or decisions justified on a false basis. Those decisions would be bad as in wrong or risky, because the client did not properly understand the risks of what they were being advised to do, or they may be bad in the sense of lacking in integrity because the decisions are designed to misrepresent or mislead about the law, the facts on which they are based, or the risks that interpretation of these two raises. If a client wants the lawyer to advise that X is less risky than it actually is then that is likely to be an integrity problem, even if the client appreciates the true risk: the lawyers slanted signal as to the risk is misleadingly protecting the decision maker or is likely to be used to mislead others (or both).
In an organisation, such slanted understandings pass between different actors and levels, each with their own agendas and audiences to please. The processes involved can have some subtlety and can take on a life of their own. They do not only stem from a desire to supplant the truth; they can stem from a desire for simplicity. They can also stem from what ‘being commercial’ can mean when a lawyer is asked ‘is it legal?’
I assume the desire for simplicity is an inescapable fact of individual psychology and organisational culture. Why, in extremis, does this manifest as a lack of integrity? Is this just the system? Or lawyers being lawyers? How much is misconduct? To consider these questions we need to examine how organisations interact with lawyers and how individuals and systems create integrity gaps and mutual irresponsibilities. How can practices that look normal have the capacity to be deeply harmful? And when and why do they promote the client’s interests over the interests of justice?
I call these practices irresponsible orthodoxies. Irresponsible orthodoxies are built on routine ways of thinking and practical scripts that appear normal or routine but are, or are carried out in ways, that are irresponsible. If I remind my organisation of a document retention policy, which governs the legitimate destruction of documents not just their retention, on the day I discover I am about to be raided by the police, I may be unlucky or I may be behaving irresponsibly (or worse than that). And deployed irresponsibly, when managed in bad faith, or when lawyers forget the integrity and the interests of justice – such orthodoxies can create legality illusions.Footnote 1 In the police raid example, the illusion would be that the documents were routinely and lawfully destroyed. These illusions enable badly lead organisations to say ‘we can do what we want’ when they should not, or ‘we did the right thing’ when they did not, and so on – if not with impunity then with significant levels of deniability.
I will discuss in more depth what legality illusions are later, but one example was discussed in Chapter 5: Paula Vennells writing to a government minister in 2015 to say that there was nothing to suggest that any of the hundreds of SPM convictions was unsafe. There was significant evidence that convictions were unsafe, not least a tainted expert witness. It might be arguable that no one knew the convictions were unsafe – after all, only a court decides that, and Vennells’ legal team may have been of the view that the convictions could be defended as safe despite the problems they had discovered – but that is not the same as saying there was nothing to suggest any conviction was unsafe. Her statement was untrue, whether she knew it or not. It was an illusion informed by a slanted interpretation of the legal position. It was misleading. Any lawyer helping to make or approve the statement ought to have realised this. Was it the system and its routines or individual fault at work here? Was it both?
What Organisations Want
To understand how legality illusions build up we need to understand what organisations want from lawyers and how lawyers respond to that desire. To do so let me sketch out some assumptions. No organisations are alike, and no theory of them is uncontested. For businesses, their primary goals can be simplified as providing financial reward, status, and (sometimes) meaning to those who work in them. They tend to be managed with a keen eye on profit and reputation.
These systems can become unbalanced. Typically, they do so because of profit-maximisation.Footnote 2 Profit is a necessary positive for any commercial organisation, but maximisation can be dangerous, driving excessive cost-cutting and other risk-taking. Financial and reputational drivers cascade through the organisation and, when unbalanced, can diverge from the long-term interests of the organisation. Senior managers, perhaps particularly sensitive to reputation and financial signals because of their visibility and contractual incentives, set priorities and take critical decisions. Typically, senior lawyers work with them.
Lawyers are supposed to act in the best interests of the organisation, but usually take direction on what those best interests are from the executives. In times of conflict, there can be huge difficulties in working out who the client really is or what is actually in their best interests.Footnote 3 We also know lawyers sometimes keep trouble away from boards. Sometimes, that is sensible. The board is not often best deployed in considering legal minutiae, but it can also have a less savoury aspect, with lawyers thinking, assuming, or being told that the board is better off not knowing about ‘dirty linen’ or being told in ways that are sanitised or off the record.
In Prince Harry’s hacking case against Mirror Group Newspapers (MGN), MGN in essence alleged that the truth about hacking was concealed from the board. The judge found that ‘A pretence was maintained by Mr Vickers [a board member] and Ms Bailey [the then CEO]’ that there was ‘no credible evidence’ of VMI (voice mail interception) at MGN newspapers. Both knew that there was evidence, but felt able to deny it.Footnote 4 One reason the judge formed this view was findings made regarding MGN in-house solicitor Martin Partington:Footnote 5
In dealing with the 14 Incidents above, I have made findings that Mr Partington would have been aware of UIG [unlawful information gathering] from 1999 and was aware of phone hacking activities from no later than the end of 2003, but probably earlier as a result of his ‘legalling’ work. The claimants have therefore proved their case that the legal department of MGN knew about phone hacking. There was no formal report to the board. I have found that, on the ‘no surprises’ understanding between them, Mr Partington told Mr Vickers what he knew. Mr Vickers was the group head of legal and a main board director, so it cannot be said that the legal department concealed VMI and UIG from their employer.
It was not necessarily concealed, it just was not written down in a formal report. The board, or some of its members, knew about it but could deny it.
Agreement, Simplicity, Confidence
As Baroness Hale identified, legal professional privilege is given as a fundamental right because ‘It is in the interests of the whole community that lawyers give their clients sound advice, accurate as to the law and sensible as to their conduct.’Footnote 6 The point of privilege is that clients are encouraged to make a clean breast of their situation behind the cloak of privilege to enable the lawyer to counsel them towards legality, not away from it.Footnote 7 And yet, what organisations actually want is more complicated than sound, accurate, or sensible advice, even when acting in good faith. They want permission or validation. They want to be told you can do this, it is lawful, or we have investigated that and you behaved justly. And they want to be told this with confidence and simplicity.
As an example, let’s take the invasion of Iraq. Pretend I am Tony Blair: in 2003 I was considering the UK being part of the invasion and occupation of Iraq. There were doubts about the legality of this. Some argued that existing UN resolutions were sufficient, others that a UN resolution needed to be passed.
If I am behaving responsibly, I want to ensure that the invasion is likely legal, and I want to be able to present the legality of the invasion with firmness and resolution to other audiences. So, I want the answer to be ‘yes, it is legal’. I also want the answer to be a clear ‘yes’, a confident ‘yes’. Without clarity and confidence, I am in difficulty. I need to inform and persuade others, both within and outside the organisation (the army, the government, parliament, and the nation), that what is proposed is legal. So, there is a problem with managing, representing, and acting on uncertainty here. The military and civil service must be informed that it is lawful; equivocation does not assist them. The system arguably needs, and definitely prefers, a positive, simple response. All this gives rise to dilemmas for the lawyer: How sure do they need to be to advise something is lawful? How should they represent any uncertainty? How should they cope with foreseeable risks that their advice is mispresented or otherwise manipulated? The temptation on lawyers to slant their approach to their immediate client’s preferences can be strong. There are other problems adding to this. The factual basis of advice, or the questions asked, can be biased in favour of a particular outcome. Advice requests can be left late to maximise pressure on the adviser to say yes. Draft advice can be subject to lop-sided scrutiny.
In the Iraq example, the Chilcot report summarises his key findings on the Attorney General’s advice.Footnote 8
On 9 December, formal ‘instructions’ to provide advice were sent to Lord Goldsmith. They were sent by the FCO on behalf of the FCO and the MOD as well as No.10. The instructions made clear that Lord Goldsmith should not provide an immediate response.
Until 27 February, No.10 could not have been sure that Lord Goldsmith would advise that there was a basis on which military action against Iraq could be taken in the absence of a further decision of the Security Council.
Lord Goldsmith’s formal advice of 7 March set out alternative interpretations of the legal effect of resolution 1441. While Lord Goldsmith remained ‘of the opinion that the safest legal course would be to secure a second resolution’, he concluded (paragraph 28) that ‘a reasonable case can be made that resolution 1441 was capable of reviving the authorisation in resolution 678 without a further resolution’.
Lord Goldsmith wrote that a reasonable case did not mean that if the matter ever came to court, he would be confident that the court would agree with this view. He judged a court might well conclude that OPs 4 and 12 required a further Security Council decision in order to revive the authorisation in resolution 678.
At a meeting on 11 March, there was concern that the advice did not offer a clear indication that military action would be lawful. Lord Goldsmith was asked, after the meeting, by Admiral Boyce on behalf of the Armed Forces, and by the Treasury Solicitor, Ms Juliet Wheldon, in respect of the Civil Service, to give a clear-cut answer on whether military action would be lawful rather than unlawful.
Lord Goldsmith concluded on 13 March that, on balance, the ‘better view’ was that the conditions for the operation of the revival argument were met in this case, meaning that there was a lawful basis for the use of force without a further resolution beyond resolution 1441.
Mr Brummell [the AG’s legal secretary] wrote to Mr Rycroft [The Prime Minister’s Private Secretary for Foreign Affairs] on 14 March: ‘It is an essential part of the legal basis for military action without a further resolution of the Security Council that there is strong evidence that Iraq has failed to comply with and co-operate fully in the implementation of resolution 1441 and has thus failed to take the final opportunity offered by the Security Council in that resolution. The Attorney General understands that it is unequivocally the Prime Minister’s view that Iraq has committed further material breaches as specified in [operative] paragraph 4 of resolution 1441, but as this is a judgment for the Prime Minister, the Attorney would be grateful for confirmation that this is the case.’
Mr Rycroft replied to Mr Brummell on 15 March: ‘This is to confirm that it is indeed the Prime Minister’s unequivocal view that Iraq is in further material breach of its obligations, as in OP4 [operative paragraph 4] of UNSCR 1441, because of “false statements or omissions in the declarations submitted by Iraq pursuant to this resolution and failure to comply with, and co-operate fully in the interpretation of, this resolution”.’
Senior Ministers should have considered the question posed in Mr Brummell’s letter of 14 March, either in the Defence and Overseas Policy Committee or a ‘War Cabinet’, on the basis of formal advice. Such a Committee should then have reported its conclusions to Cabinet before its Members were asked to endorse the Government’s policy.
Cabinet was provided with the text of Lord Goldsmith’s Written Answer to Baroness Ramsey setting out the legal basis for military action.
That document represented a statement of the Government’s legal position – it did not explain the legal basis of the conclusion that Iraq had failed to take ‘the final opportunity’ to comply with its disarmament obligations offered by resolution 1441.
Cabinet was not provided with written advice which set out, as the advice of 7 March had done, the conflicting arguments regarding the legal effect of resolution 1441 and whether, in particular, it authorised military action without a further resolution of the Security Council.
The advice should have been provided to Ministers and senior officials whose responsibilities were directly engaged and should have been made available to Cabinet.
The Attorney General was instructed to and agreed to advise later in the process than was possible and, arguably at least, sensible. He took meetings with those in favour of invasion to discuss his advice before it was given.Footnote 9 He treated the PM as his client when it was the government that was his client. On the key factual question – whether Iraq had weapons of mass destruction – he felt able to rely on the Prime Minister’s view. As the decision loomed, his advice softened to be favourable to invasion and it was reported to Cabinet in terms that limited scrutiny and understanding of it. Moreover, many international lawyers said he got the substantive advice wrong.Footnote 10 Regardless of whether that is the case, I would argue that the process adopted probably undermined his independence.Footnote 11 He himself says, though, ‘As the person who had the responsibility to advise at the time though, I did nothing other than give my honest and genuinely held opinion reached after careful study of all the information. There was nothing expedient or political about my actions, and there is no finding to the contrary in Sir John Chilcot’s report.’Footnote 12
Being ‘Commercial’
The position and approach of the Attorney General advising a government when the Prime Minister is on a war footing contained myriad problems, not least the problem of who the client was.Footnote 13 It is also an interesting analogue for how a lawyer desperate to ‘be commercial’ for their employer or client might behave. Such problems manifest in many other contexts. There are numerous pressures, both implicit and explicit, subtle and overt, on lawyers to say ‘yes’ to their clients. Read any trainee solicitor recruitment brochure or client-facing article, or attend any in-house conference, and the demand for lawyers to be ‘commercial’ or ‘business partners’ is strong.
In organisations, this pressure can mean a range of things designed to please senior people working for organisational clients. Being commercial can also just mean being practical, not academic. Who could resist that? And why work otherwise than in partnership with your client? But that is not all that is meant. Being commercial can also mean that when presented with a legal obstacle, a lawyer should not say ‘no’ to the proposed course of action, but find a way around the problem. Being commercial is also an idea used to dilute legality. It can be an encouragement to look the other way when presented with a legal risk or to minimise it more than is justified.
To give an example, from the global financial crisis of 2008, Barclays sought investment to avoid having to seek a government bailout. The Qatari’s were willing to invest but for a significant fee. That meant that rules on financial assistance and commission payments needed to be worked around. Barclays sought to enter into cooperation agreements with their investor constituting (or, one might argue, disguising) the fee. These agreements had to be structured as normal arms-length commercial terms quite separate from the share subscription to be effective. Lawyers in Barclays were put under pressure to accept agreement terms that made the supposedly arm’s-length deal look like a paper exercise. The terms suggested became increasingly absurd.Footnote 14 There is an excruciating passage where one Barclays lawyer says, of the suggestion by the investor’s lawyers that the bank will have to sign a ‘nice soft short letter’: ‘I do know what he’s getting at but he’s got to grow up. This is not how it’s going to be, he is going to have to give the services in exchange otherwise you are going to end up in front of the Fraud Squad explaining why.’Footnote 15
We can get a sense of how this ended by noting how the judge described one of these agreements. Whilst not meeting the tests for a sham agreement, he said it was problematic in significant ways:
The agreement, as executed, may well be regarded as uncommon or artificial or even perhaps reflective of a breach of fiduciary duty on the part of those who were involved in its production on Barclays’ side … It might be regarded as a transaction at an undervalue. On any view the whole process looked ‘smelly’ or ‘dodgy’.Footnote 16
The judge says it was ‘manifestly the case, this was adopted as a way to conceal from other investors that Qatar was in effect receiving a higher fee and … was clearly part of the package deal for Qatar along with the subscription agreement’.Footnote 17 It is another example of a legality illusion, a package deal with elements that could be concealed from others. There is also some suggestion that there was also a plan to mislead Barclays’ own board about the deal if necessary:Footnote 18
Mr Dobson [Senior Legal Counsel] had said that in the prospectus, the agreement for general advisory services would have to be disclosed but not the fee. As far as Barclays was concerned, and according to a conversation between Mr Jenkins and Mr Boath, Mr Lucas [all senior Executives within Barclays] would tell the Board it was a three-year contract without disclosing the amount payable, but if he had to, he would give the impression (or not deny the assumption) that the payment would be spread over the whole 3 year period, as opposed to being made in the first year.
The process shows how being commercial to get the deal done meant flexing to try to avoid financial-assistance and share-commission rules. The drafting enabled the deal to be presented in misleading terms. We cannot be certain whether the lawyer appreciated the extent to which the agreements might mislead. Of the broader context of the deal, it is of note that Barclays’ initial advisers (Linklaters) resigned from the job ‘ostensibly on conflict grounds’,Footnote 19 having sought reassurances to ensure the deal did not amount to unlawful financial assistance. The resignation, the judge said, was ‘a serious warning sign’ to Barclays and its internal and external legal advisers of problems.Footnote 20
Greasing the Truth
Why do lawyers flex to be commercial?
In-house lawyers are in a tournament of influence: to get things done and to be highly regarded they need to demonstrate their loyalty and helpfulness in return for status and influence.Footnote 21 They hope that by flexing when making marginal calls on legal risk this earns them the right to say ‘no’ when their client proposes something more clearly problematic. Saying no is hard; they believe they need political capital within the business to do so effectively.
Similar problems may occur with private practitioners, especially those with big clients and long-term relationships. Recall how POL described Cartwright King to the inquiry as an ‘enormous’ client, and how that ‘must have’ impacted how the firm ‘approached its advice and its ability to advise impartially and independently’.Footnote 22 Henderson and Galanter have warned about the financialisation of Big Law undermining ethicality.Footnote 23
Langevoort has extensively researched how sociological, psychological, and economic forces penetrate deep into the interactions between lawyers and commercial clients.Footnote 24 He demonstrates how deeply culture permeates thought and behaviour. To adapt a phrase falsely attributed to Peter Drucker, we should worry that culture eats independence for lunch.Footnote 25
He suggests commercial cultures like, and sometimes demand, intensity, passion, and commitment. Optimistic construal is expected: putting the best gloss on situations. Langevoort labels this corporate ‘grease’. ‘Being positive’, he says, ‘facilitates motivation, cooperation, and trust’.Footnote 26
There are problems with passion and optimism. They are associated with unrealistic ‘situational construals’, getting stuff wrong, being overconfident. Extreme examples are found when POL-instructed lawyers talked about suppressing evidence improperly,Footnote 27 or suggesting they attack ‘the postmasters credibility by calling out [Noel] Thomas, [Seema] Misra and [Jo] Hamilton … as the liars and criminals that they are’, or when they suggested tactics designed to ensure the claimants ‘burn money’. At the time, the lawyer defended tactical brainstorming of similar tactics in these terms: ‘I’m sure everyone can raise a million reasons why the below is crazy … I think it’s crazy … but we need to find a way forward so we all need a positive (if deluded) mental attitude!’Footnote 28
What the lawyer in that example suggests was just a ‘straw man’ discussion at the time might look like a loss of professional detachment. A proponent of the standard conception might suggest that this is the lawyer just doing what the client would do if they could handle the case themselves, helping them pull legal levers in a way that maximises their chance of winning.Footnote 29 They become the ‘perfect’ amoral agent making pleas to, or proving a licence for, amorality in the client’s nature. In a perverse way, the comments show a commitment to, intensity and passion for, and alignment with the client. As I noted in Chapter 6, disdain for others is particularly significant psychologically: it is a form of moral disengagement.Footnote 30 As Langevoort has noted, aggressive financial innovation led banks’ towards ‘disdain for any sense that they owed special fiduciary-like obligations to their institutional customers – a way of distancing themselves so as to rationalize hyper-competitive behavior toward the customers, too’.Footnote 31 Clark has suggested that this aggression to the client’s opponents or counterparties is sometimes driven by the lawyers’ interests, not the clients’.Footnote 32
Langevoort suggests that organisations have structural biases that mean they tend to promote risk-takers. Risk crystallising can be excused as bad luck, managed, or concealed, but to succeed in financialised organisations you have to try and win – and win big. Rainmakers have the power. To give an extraordinary example, Neil Gerard switched from being a partner at DLA Piper to Decherts on the basis he would make a lot of rain for Decherts.
His approach to the business of lawyering was mercilessly dissected by the High Court in the ENRC case. In essence, this case is about allegations that Mr Gerard engaged in deliberate or reckless conduct designed to ensure the Serious Fraud Office acted against his client in ways that would maximise his fees. One suggestion is that it was the pressure to deliver on promises to his firm of fee income that drove his behaviour. The judge found that:Footnote 33
Mr Gerrard did indeed have a motive and inclination to ‘kick-start’ more substantial work for ENRC by increasing the prospect that the SFO would become involved, not so as to provoke a criminal investigation; but rather to cause a large amount of work to be done which would lead to a self-report and some form of civil settlement which would avoid a criminal investigation.
Interestingly, the firm had had warning signs of his approach when he was interviewed by Dechert lawyers during his recruitment. Notes of those interviews ‘refer to his ego, a lack of clarity on details of profits for the work he did, his ability to turn a small job into a large one and a strategy of “hero marketing” around him’.Footnote 34 One partner had warned the firm against taking on Gerard because he had seen that ‘the advice Neil’s team was giving was unduly negative and to an extent scaremongering in order to increase DLA’s fees’.Footnote 35 In the ENRC case the judge found that Gerard had breached his duties to ENRC (his client) by, amongst other things, instigating leaks against them and giving the wrong advice about tactics and other matters relevant to the Serious Fraud Office investigating them.
Examples of the economic self-interest for lawyers to work aggressively but strongly contrary to client interests are rarely so vividly exposed. The promotion of egregious or bound-to-fail tax schemes is an analagous example.Footnote 36 Usually, it is harder to disentangle whether expensive, aggressive tactics are for or against the client’s best interests. Whilst PO work has provided major fillips to the careers and the income streams of several lawyers and firms over many years, in the short and medium term, whilst those tactics remained secret they protected the PO against legal claims and losses.
Langevoort suggests that lawyers’ decision-making styles fit a greasy model where both lawyer and client’s inclinations and interests are, or appear to be, more aligned. Decisions are ‘driven by intuition and feelings as much (or more) than explicit deductive or inductive reasoning’, with the lawyer’s mind ‘trying to work its way’ towards meeting what the client wants.Footnote 37 This is what ‘being commercial’ can mean. Again, the PO scandal may provide examples. Stephen Dilley ran the civil litigation against Lee Castleton. He started out thinking Mr Castleton’s defence appeared ‘to hold potential merit based on the limited documentation’ and advised POL to settle the case.Footnote 38 He also asked questions about the reliability of Horizon. In-house lawyer Mandy Talbot then told him of the ‘serious ramifications for the business’ of failure. The case became one of defending the system rather than settling a debt claim.Footnote 39 As we have seen, Simon Clarke and Brian Altman (both barristers) decided against exploring why key Fujitsu witness Gareth Jenkins gave evidence that was tainted. This came at a time when Mr Clarke had noticed that the PO ‘became very defensive’ about expert evidence.Footnote 40
Langevoort also suggests lawyers are prone to cognitive dependence and collective rationalisation. When lacking expertise (knowledge of computer systems would be a good example) they show excessive deference and dependency on others for evidence and its interpretation. At the inquiry, lawyers repeatedly defended their actions because of their client’s confidence or belief that Horizon was robust, for instance, in the absence of hard evidence that such confidence was justified.
Lawyers are not just dependent on information from others; however, they manage it, fitting it to the best-case story and polishing it by emphasising what is helpful and diminishing what is not. Organisations naturally silo and diffuse information. At the PO, cases that went wrong were settled and sometimes buried under NDAs. Central management of core knowledge about Horizon’s failures (including legal failures) was absent. Bad news disappeared. Witness statements were drafted in a manner that was more beneficial to the business than the witnesses intended or were comfortable with.
Even when not sinister, organisational culture and the tournament of influence can promote cognitive dependency over professional independence. However, lawyerly zeal can exacerbate the situation. Already dependent on partial information, lawyers naturally burnish pro-client facts and arguments. In developing a narrative, something arguable but probably false can take on the appearance of, or be asserted as, truth. Cognitive dissonance – the human tendency to interpret new information in a way that is consistent with past or preferred choices – may magnify the polishing.
The PO’s approach to remote access may be a case in point. As we have seen, remote access is crucial to the PO story. Fujitsu engineers could change SPMs accounts remotely, without the SPM knowing and without there always being a controlled process for permissions to alter accounts and a secure audit trail for what they did. It meant the system was not demonstrably secure. It was also a likely cause of accounting errors. The truth about remote access appears to have been passed onto POL haphazardly over time. Rather than clarifying the risks of this, POL went from denying that remote access was possible, to stating it was possible only with SPM consent, to admitting it was possible without consent but controlled, and then claiming it was uncontrolled but unlikely to be an important source of Horizon problems. They developed denials and lines to take rather than understanding and communicating the truth.
Dealing with Risk
What would sensible advice as to the law and conduct, the unslanted handling of legal risk, really require? If we bear in mind the requirement for independence mandated by professional rules, I suggest that what is required is that:
1. facts and law are marshalled, interpreted, and presented within the organisation as objectively as possible; and,
2. uncertainties as to the facts or how to apply the law should be handled objectively, with clarity and openness when advising the client about the risks and uncertainties inherent in that handling.
Only then can decisions about risk be made with the best available information on those risks and in a manner that most closely reflects what the law requires of the organisation.
We have already seen how grease and zeal can distort facts, consciously and unconsciously. When it happens, decisions about risk are made on a slanted calculus: inaccurately and slanted towards the preferences of the people in the organisation supplying the information and its key decision-makers. This slanting of the calculus and questions about its legitimacy are important. There is a question of process: how to best ensure that facts and legal interpretation are as objective as possible. Stepping out of cognitive and other dependencies takes real effort, skill, and a focus on proper evidence not belief. And there is a question of substance: how risky does a legal decision have to be before an organisation should not take it?
Let me move onto that second question with an example.
The Attorney General’s Guidance (2022) on Legal Risk.
This guidance was introduced in 2015. The version I want to use is an example of slanted legal risk management. It was last updated by the previous Conservative government in 2022, under then-Attorney General Suella Braverman. Part of the aim was to make government lawyers behave more like high-end commercial lawyers.Footnote 41 It sought to strengthen the risk appetite of the Government Legal Department or, to put it another way, to align it better with the high risk-appetite of its client. The House of Lords Constitution Committee reported Suella Braverman’s view (then as Attorney General) that government lawyers were ‘too cautious in their advice [and] … hampered ministerial policy objectives needlessly’. They should move away from the ‘“computer says no” approach’ to encourage a ‘solutions-based approach and use innovative legal thinking’, and to ‘instil a “private sector” approach to client service’.Footnote 42
The guidance required government lawyers to advise whether ‘there is a sufficient legal basis to proceed’ with a controversial policy unless ‘there is no respectable legal argument that can be put to the court’ in favour of ‘the action we wish to take’ (my emphasis). This meant that even a case with more than a 70 per cent chance of being successfully challenged may have sufficient basis to proceed. So, cases very likely to be unlawful had ‘sufficient legal basis’ under the guidance. It gets a little worse. A lawyer inclined to say there was no respectable argument ‘should refer the matter to [their] line manager … before [they] advise’.Footnote 43 If their manager disagrees with their assessment, the advice will be revised to say there is sufficient basis.
Advice was still expected to explain legal risks ‘accurately and clearly’Footnote 44 to and suggest mitigations, but it is my view that such guidance interferes with the independence of the lawyers involved. It encourages pressure to lean towards ‘yes’ and, in requiring the lawyer to say something probably unlawful is sufficiently legal, it has significant potential to mislead. The risk that ministers would abuse such a policy are obvious and occur against a wider background of a high tolerance for legal risk, or what I defined earlier as legal aggression: the deliberate attempt to engage in likely unlawful practices. It has been suggested that Home Secretary Suella Braverman was willing to ignore advice about very high legal risks associated with her immigration policies, for instance.Footnote 45 There is a further element of the twisted genius that says X is likely to be unlawful but can be represented as having sufficient legal basis. It is that it allows the lawyers to give behind that representation an account of the problems with X and yet allow the minister to say the lawyers advise we can do X. It designs-in a mutual irresponsibility.
Interestingly, the incoming Labour Attorney General almost immediately changed this guidance as part of a stated policy of improving the culture of rule of law in government.Footnote 46 Referral up is still required if the lawyer proposes that the proposed policy is legally untenable, but this is somewhat balanced by the requirement to also refer up where there is a ‘medium-high’ (>50 per cent) or ‘high’ (>70 per cent) risk of unlawfulness. In the latter case, advice must be sought from one of the Law Officers ‘immediately’. More notably still, the ‘principal factor’ governing advice is whether a legal challenge would be successful if brought; this is more important under the new guidance than whether a court challenge is likely and the impact of any such challenge. In other words, legality is more important than the likelihood of challenge; or, as Graeme Johnston has put it, there is now ‘less of a “can we get away with it?” vibe’.Footnote 47
Nuance and Mutual Irresponsibility
Dysfunctional systems are full of accountability gaps and mutual irresponsibilities: policies and processes that distance decision-makers from responsibility.Footnote 48 Some gaps are designed; others are accidental. When it became clear in 2020 that Paula Vennells’ claim that there was no evidence to suggest any convictions were unsafe was indefensible, she blamed POL’s lawyers for the advice given and said she could not reveal that because of legal professional privilege. Asked to explain herself to the chair of the House of Commons Business Select Committee, she said this:Footnote 49
Post Office relied on lawyers (both internal and external) for advice in relation to criminal matters, and lawyers held the operational responsibility for investigating and prosecuting criminal misconduct …
[A]n additional layer of oversight was provided by the courts and the CCRC. [And], Post Office engaged a senior criminal QC to advise on the response to a letter received from the CCRC regarding convictions relating to Horizon, and also to advise on prosecution related issues. In referring to this advice I do not and do not intend to waive any privilege of Post Office or myself, if any, over the advice the criminal QC gave.
As we have seen, the lawyers, now forced to defend that advice, have tried to say, in essence, that they simply advised in difficult circumstances, and perhaps with hindsight, in ways not entirely correct, but the client took the relevant decisions. The recusal application is an example of mutual irresponsibility and an interesting example of the way in which adversarial zeal encourages the client to maximise legal aggression to boot. Lord Grabiner’s best argument for his approach was that he was obliged to advise the client how to win the case and this was the only way of doing that.Footnote 50 Aggression was the only path to victory and he had to advise them in the strongest terms to take it, he in effect said.
Irresponsible Orthodoxies
Let us look a little closer at other ways in which zeal, organisational dispositions, and mutual irresponsibilities have given rise to problems. Here, I want to show how those drivers create repeating patterns, the irresponsible orthodoxies that lie at the heart of many of the ethical problems here. In the PO scandal, these orthodoxies provided the PO with justification for its decisions, protected it from risk, and shielded it from scrutiny. Because they are orthodoxies, they can take on an almost autonomous quality, separate from the individuals involved. It is easier to think ‘we always do X’ than it is to think about whether ‘doing X’ is the proper thing to do in the circumstances. The orthodox step, its routineness, means a lawyer fails to think more fully about how the step is taken or the context in which the step is taken.
I highlight six such orthodoxies here.
1 A World Shaped by Arguments More Than Evidence
Contracts are supposed to define rights, but when misused, they do more. They can mislead. They can drive abuse.Footnote 51 The drafting of the PO’s contract with SPMs is a case in point: it helped shape an abusive, exploitative relationship. Its unreasonable terms held great sway throughout the business: almost everyone behaved as if the contract required shortfalls to be repaid in all circumstances and that SPMs could be removed easily. It was later redrafted (even more unfairly) to try to make liability explicitly ‘no fault’.Footnote 52
The High Court decision in Lee Castleton’s case bolstered POL’s unfair approach, giving the High Court’s imprimatur to Horizon’s legal defensibility and the shoddy evidential practices around it.Footnote 53 They accepted that Mr Castleton had agreed accounts containing shortfalls that he could then not disprove was a reasonable argument – a ‘nice little legal point’, as Jason Beer KC called it. In accepting that the evidence before him should be limited to largely exclude evidence from other branches as a ‘trial within a trial’, the judge helped POL create a legal debt trap.Footnote 54
In context, the notion that he was an agent signing an account as accurate was an illusion. Mr Castleton only signed such accounts because his contract required him to. He had to accept the accounts each week or cease trading. He challenged their truth in the only way possible, through ringing the helpline and hoping something would happen that led to the erroneous transactions being corrected. Draconian termination clauses gave the PO further leverage to handle him. It was legal totalitarianism. You have agreed shortfalls, you owe us the money, you can’t prove otherwise, we will fire you or sue you or prosecute you if you don’t pay up. To make matters worse, PO investigators were paid bonuses to maximise recovery under this Machiavellian deal.
This unfair contract survived for twenty years. It took the extraordinary Bates case to undermine it. As things stand, the SRA rules and guidance confine explicit concern with contracts to NDAs, saying they ‘must not include or propose clauses known to be unenforceable or use warranties, indemnities, and claw back clauses in a way which is designed to, or has the effect of, improperly preventing or inhibiting permitted reporting or disclosures being made’ (my emphasis).Footnote 55 The same logic applies to any contract, but the SRA guidance does not include the situation where a clause is used that is probably unenforceable but worth a punt. One might argue that deliberately using probably unenforceable clauses is lacking in integrity, or may constitute taking unfair advantage (another breach of SRA rules), or (if the legality of clauses is asserted too strongly) is misleading, but making such arguments would require a great deal of contractual expertise and a regulator very willing to take up such complaints.Footnote 56 Neither professional rules nor contract law discourage trying out unreasonable clauses in the hope they will be taken seriously by those they are designed to control.
There are many other occasions in the PO scandal when arguments were deployed at some remove from the facts. When Mr Justice Fraser said the Bates case was a ‘flat earth’ case he meant witness statements were based on what the PO wanted to be true, not what was true. The implication seems to be that it was either negligent or improper. Evidence about remote access was filtered through a lens of what POL wanted to say, and so on.
2. Zeal, Not Independence-Dominated Decision-Making
Disclosure of relevant evidence was repeatedly denied by PO lawyers. When the inquiry has considered this, files, notes, and emails suggest a pattern whereby the PO’s lawyers habitually sought a rationale for not disclosing rather than objectively applying the relevant tests. Some decisions were impossible to defend when put to them under cross-examination and were conceded as flawed. They usually sought to mitigate any criticism by pointing out that any admission was made ‘with hindsight’.
One email from Bond Dickinson, drafted by two of their solicitors, suggests foresight. Whilst working on the Bates litigation, ‘suppressing’ evidence is explicitly suggested. They proposed using arguments that only ‘appear legitimate’, if and until the pressure to provide the documents became so great that they would need to be disclosed. One of the lawyers responsible now says there were, in fact, legitimate grounds for resisting disclosure; they were just not mentioned in the email. This leaves a question: did they think they were suppressing evidence at the time, or were they just making a show of ‘suppressing’ evidence to impress the client?
The repeated resistance to disclosure spread across time, different lawyers, and different cases suggests a problem that is deep-seated and potentially endemic. The lawyers were incapable, it seems, of ensuring proper disclosure. Zeal turned disclosure rights on their heads: SPMs rights to documents became PO rights to resist disclosure including, as we will now see through the next orthodoxy, the exploitation of privilege.
3 Exploitation of Legal Professional Privilege
In 2011, in response to four SPMs’ claims, a RMG lawyer (who owned the PO then) issued a litigation hold to staff. Worries were growing about a group action. A litigation hold is a warning to keep all relevant documents safe. This one also discussed ‘document creation’. It emphasised controlling the creation of documents ‘potentially damaging to POL’s defence’ because they might be disclosable. Everyone was urged to ‘think very carefully’ before writing down anything ‘critical of our own processes or systems’. If there was a need to write something down, they were advised how to try to attract privilege to it and so help shield it from disclosure. One tactic was to encourage staff to write down adverse evidence so that ‘its dominant purpose can be said to be evidence gathering for use in the litigation’.Footnote 57 Being told to write something down in such a form that it can be said to be recorded for the purposes of litigation evidence gathering, whether or not it was being recorded for that purpose, does seem, whether it was the author’s intention or not, to invite a degree of dishonesty about a document’s purpose.
Litigation holds and the maximising of legal privilege are orthodox. They are seen as protecting the client’s rights to claim privilege over documents properly needed for legal work, but can also encourage synthetic claims to legal privilege. In this example, not only is harmful evidence encouraged into the privilege shield, but the lawyers also discourage such evidence from being recorded in the first place. If it is created, they encourage the synthesising of arguments for resisting its disclosure. Whether this is ordinary risk management, or an abuse, probably depends on whether we think the business and the lawyers were acting in good faith and how the litigation hold was actually managed. This brings me to the next orthodoxy.
4 Sophisticated Evidence Management
The aversion to creating or dealing with adverse evidence takes other forms, and the evidence of several of the lawyers before the inquiry suggests it is orthodox. Richard Morgan, a barrister (now KC) who led the PO’s case against Lee Castleton, described his general approach when asking questions which might reveal adverse evidence:
A. … I’m trying to find out what’s going on …. [W]ithout being so crude as to say ‘Give me full and frank disclosure’, I want to know are there any unexploded landmines that I’m going to step on if I go down a particular course? Is there anything that’s going to come out that I should know about now? Generally, with sophisticated firms of solicitors, they know that that’s what you’re asking them when you say, ‘What’s out there?’
Sophistication is left opaque. Full and frank disclosure, to him, who is leading the case before the court, is seen as crude. There appears to be merit in him being unencumbered with specific adverse knowledge if possible. We get another sense of these tactical instincts at a meeting with senior PO lawyers five or six years after Castleton. Here, Mr Morgan is asked whether the PO should have an independent investigation into Horizon. Fresh cases are looming at this point. The note of the meeting, and probably Morgan’s view, but perhaps the collective view of the group, was no: ‘Whatever the findings of the expert report it [will] not resolve the problem. POL will be “damned if they do and damned if they don’t”.’ Either the report will be seen as a ‘whitewash’ or it ‘will open the floodgates to damages claims by SPM’s who were imprisoned for false accounting and … all the civil cases they are currently sitting on’.
Notice that the focus is on making cases go away for the PO. Those cases include possible wrongful prosecution claims. Morgan points out in his oral evidence to the inquiry that such cases were beyond his expertise and so he would not have, or should not have been taken to have, advised on those. Overall, the note suggests that this group desired a tactical response to the problems it faced rather than confronting the potential injustice of those who might have been prosecuted unfairly. It is a moment of turning away. A rock is not lifted. Tactics trump integrity.
5 An Absence of Rock Lifting
An absence of rock lifting was a feature not a bug of this scandal. A central example concerns Gareth Jenkins. As we know, he was a Fujitsu software engineer who gave evidence in various criminal cases, including at Seema Misra’s trial that ended in her imprisonment when pregnant. The PO’s lawyers had not handled him properly. Some of them sought to harden his evidence in their client’s favour and did not advise him adequately on his obligations while holding him out as an independent expert. When problems with his evidence became apparent, Simon Clarke, a barrister working for the PO ’s criminal law firm Cartwright King, reviewed Mr Jenkins’s witness statements and said his ‘credibility as an expert witness is fatally undermined’.Footnote 58 This was because of his failure to disclose in evidence Horizon problems of which he was aware.
Curiously, Simon Clarke does not probe this with Mr Jenkins to find out what might have gone wrong. As discussed earlier, Brian Altman KC, appointed to review Cartwight King’s work, agreed that Mr Jenkins was clearly tainted. Mr Altman started his work by saying he would have to consider carefully whether to see Mr Jenkins, but he too decided against it. Altman explains his change of mind on the basis that he was only reviewing Cartwright King and not investigating. Counsel to the inquiry, Jason Beer KC, suggests not speaking to Jenkins meant that the Jenkins issue ‘remained shelved … never to be returned to’. Asked ‘weren’t you not loading the dice by excising him?’, Altman’s replies ‘I don’t see it that way’.
Another example of not lifting the rock occurs when Simon Clarke warns Post Office GC Susan Crichton that minutes of disclosure meetings may have been shredded. His advice warns that, if repeated, this would amount to criminal and professional misconduct for anyone involved. This ‘sat in a drawer for a couple of weeks’. The response to it from Susan Crichton is somewhat equivocal:Footnote 59
Post Office Limited is committed to conducting its business in an open, transparent and lawful manner. Any suggestion to the contrary would not reflect Post Office Limited policy, and would not be authorised or endorsed by Post Office Limited. Accordingly, the purported statements referred to in Simon’s note do not reflect or represent Post Office Limited’s position.
The response is, in essence, that if this had happened, it would be bad and contrary to our policy. It does not deal with whether it had, in fact, happened, or what to do about that. It does not suggest that the problem has been considered and addressed. It is a curiously evasive response. Despite this, and an early warning that they might be blamed for the problem when it came to light, the Cartwright King lawyers say they were reassured that the issue had been addressed. They cannot remember how they were reassured, and there is no evidence that the shredding, an allegation of criminal misconduct in a review of criminal prosecutions, was properly investigated. A limited note of a meeting afterwards kept by Bond Dickinson refers to ‘cultural issues’ that have been ‘addressed’ in ways that may suggest, as Simon Clarke agrees when he gave evidence to the inquiry, minimisation of the problem by POL and their solicitors.Footnote 60 The rock is replaced and covered in the moss of my next orthodoxy.
6 Speak Bad News Softly, Good News Brightly
Recharacterising shredding as a cultural issue is but one example of bad news being spoken softly. We know that when Susan Crichton reported in writing to the board in 2013 on the emerging problems of Gareth Jenkins’ evidence and Second Sight’s interim report, she did not convey their full significance. She was excluded from the board meeting by the Chair of the Board and, humiliated, she was managed out or left the business shortly afterwards. As the bearer of bad news, she muted it and still paid the price of a messenger.
This bad news/good news orthodoxy often arises in investigations (or advice) that are organised (by the client) or provided by the lawyer in ways to maximise helpfulness to the client. We have started to see this in the political domain.
Lord Pannick’s advice (which he wrote with a colleague, Jason Pobjoy) on the Boris Johnson Privilege Committee Inquiry, is arguably an example. It concluded:Footnote 61
For the reasons set out above, we advise Mr Johnson that the Committee is proposing to proceed by reference to substantive errors as to the ingredients of contempt and the standard of proof required, and is proposing to adopt an unfair procedure. But for Parliamentary privilege, a court hearing a judicial review application brought by Mr Johnson would declare the Committee’s Report to be unlawful.
The opinion was criticised for having been published in unusual circumstances and for its substance. David Allen Green suggests that the advice was unusually poor and was commissioned with the intention that it would be published for political reasons. As is his normal practice, Green does not criticise the lawyers, suggesting their advice may be a creature of their instructions (the questions they were asked to answer). Nonetheless, he makes very trenchant criticisms of the substance:Footnote 62
Indeed, there cannot be many weaker legal opinions that have ever been published. That the Opinion was weak has now also been stated by the parliamentary committee itself, in a special report on the Opinion. The committee in a mere six pages of its report refutes (and not just rebuts) the twenty-two page Opinion. The committee’s report is, well, absolutely devastating. The language is extraordinarily strong for such a report – for example, at paragraph 12:
‘We consider this concern to be wholly misplaced and itself misleading.’
At paragraph 6, the committee says the Opinion ‘is founded on a systemic misunderstanding of the parliamentary process and misplaced analogies with the criminal law’.
And so on.
The Committee’s report was informed by advice from Sir Ernest Ryder, a former Lord Justice. However, we should not attribute the view that the opinion was misleading to him. The point seems to be that the opinion was sought for political purposes, not to persuade legal audiences. If the criticisms of the Committee and David Allen Green are accurate, it was deficient as an opinion but useful as a piece of political theatre and so helpful to the client in that sense because it lacked, in their view, balance.
The problems with helpful opinions can be more subtle than this. Linklaters provided advice helpful to Lehman Brothers off-balance-sheet accounting. Their advice was on whether a particular ‘repo transaction’, an agreement to sell debt and then repurchase later, amounted to a true sale under English law.
The context for the transaction was that Lehman were using such repo transactions to sell debt before a management accounting date and then repurchase it shortly after that date. The effect of this was to improve its debt figures, arguably artificially, making the bank look more solvent than it was.
There was nothing wrong with the advice that the solicitors gave. Linklaters gave a competent and correct legal opinion stating that it was a true sale. But there are strong arguments that it was misused in arguably foreseeable ways.Footnote 63 If that is correct, the solicitors would or should have been conscious of the risk that the repos were to be used for balance-sheet manipulation. David Kershaw and I have suggested that lawyers need to take some consequential responsibility for such problems when they are foreseeable, taking steps to minimise the risks of serious illegality when they present.Footnote 64 We do not know whether that happened in the Lehman example, but in the Barclays case discussed earlier there are suggestions that Linklaters did the right thing. They raised pertinent questions with Barclays when considering whether the proposed Qatari investment gave rise to questions of illegal financial assistance. One potential explanation for their resigning from that case is that they did not receive answers to those questions that satisfied them they could advise the deal was lawful.
Opinions are not the only source of potential problems when it comes to giving a client good or bad news. When investigating misconduct, a critical question is: by what standards should the conduct be judged? Consider an independent review of the role of the Bank of England and the rigging of foreign exchange markets. This was conducted, as it happens, by Lord Grabiner. When conducting this review, he tested alleged misconduct by looking to see if the conduct under scrutiny breached criminal standards. This decision meant that criticism of the bank was less likely. Finding proof of criminal offences is hard. Had the conduct been measured against broader professional standards it would have been more likely to lead to the bank being criticised.Footnote 65
Independent investigations into corporate misconduct are routinely derided as being whitewashes, susceptible to cherry-picking.Footnote 66 The PO scandal contains reviews that I would argue had significant inadequacies in remit and execution. Cartwright King’s review and Brian Altman’s review of their review would fall into this category. How such reviews are then reported up and out is also important. Cartwright King and Altman’s overly positive findings were what was passed through the PO’s legal and PR lens to say there was nothing to suggest any convictions were ‘unsafe’. Second Sight’s review was selectively interpreted so that Horizon could be described as without systemic problem. As we have seen earlier, a third review, the Swift Review, raised many of the problems the inquiry is now investigating but was kept from the PO board after probably erroneous advice from the GC, Jane Macloed. It was also summarised in a rose-tinted way for the government minister. The review was reported to Parliament with even more misleading blandness years later.
Legality Illusions
This organisation, execution, and communication of legal work shows us the purpose of lawyers from the PO’s perspective. It is to provide professional backing for their own particular and partial versions of the truth: partial as in only part of the truth, and partial as in slanted. Organisations, used to representing messiness in positive and simplified terms, are also willing to encourage and accept illusions where they are useful and can be defended.
To capture this, I suggest the idea of legality illusions. In general terms, I see legality illusions as fostered illusions of legality by which lawyers and their clients abuse power and avoid accountability. More specifically, I define legality illusions as:
a. misleadingly or unlawfully
b. implying or asserting that actions, decisions, and assessments of facts
c. are ‘just’ or ‘legal’ or ‘within the law’ or ‘true (or fair representations) of facts’
d. when they are likely or highly likely to be unlawful (or illegal) (or untrue)
They are misleading or unlawful instances of legal aggression.
I do not want to try your patience with a full defence of this idea or definition – not least because I am still refining it. But it goes beyond theories of lawyering like creative compliance.Footnote 67 Creative compliance is artful compliance with law, compliance in form but not spirit. What we see in legality illusions is, I think, worse than that; a (probably) deliberate or reckless attempt to behave unlawfully or mislead others.
Take Standard Chartered Bank (SCB)’s ‘wire-stripping’, for which they were fined considerable sums.Footnote 68 SCB was accused of ‘wire-stripping’ information that would have identified the Iranian origin of transactions cleared through the US banking system. Iranian transactions had to be cleared through US-based due diligence. Rather than do this, SCB did due diligence on the transactions outside of the US. They ‘repaired’ (to use their euphemism) the transactions by removing the Iranian identifiers – a process that has become known as ‘wire-stripping’ – and ensured their US group companies were not told about the practice. This lack of knowledge, they hoped, would mean that the US regulators could not enforce any breach of their rules. There was evidence that SCB’s due diligence processes, which were in breach of the US law because due diligence was not carried out in the US, were also inadequate: some of SCB’s client banks were claimed to finance terrorist groups, including Hamas.Footnote 69
The main commercial driver of this for SCB was that due diligence in New York just slowed things down and meant, they thought, they would lose business. Evidence in the Prosecutor’s Order issued at the time of the bank agreeing to pay a large fine suggests SCB’s GC advised on whether their wire-stripping strategy was enforcement proof and how to increase the chances it would not be scrutinised as per the outline given above. There were other examples of in-house lawyers participating in the process at key points. For instance, SCB’s Group Legal Advisor, ‘counselled several of SCB’s officers that payment instructions for Iranian Clients “should not identify the client or the purpose of the payment”’. A 2005 report by ‘senior SCB executives’ noted their wire-stripping process could ‘be perceived by OFAC as a measure to conceal the Iranian connections from SCBNY, and therefore evade their controls for filtering Iranian related payments [which if investigated] … may result in heavier penalty than might otherwise be applied, and significant criticism’. An in-house compliance lawyer appeared to raise a concern that the process was being used so ‘that any payment that could conceivably give rise to an OFAC [Office of Foreign Assets Control] problem should always be dealt with [in a way to avoid detection]’. Moreover, ‘the bank’s outside counsel … in the US warned that the bank’s system … did “not comport with the law or the spirit of OFAC rules”’. And yet, in 2006 SCB’s chief legal counsel advised SCB’s audit and risk committee that ‘it is reasonable to undertake due diligence on behalf of New York outside the US’, even though ‘we are potentially placing our SCB New York office and the Bank at risk if our due diligence procedures are not fully effective’.
Full effectiveness did not seem to entail, in this explanation, doing the due diligence in the US as the rules required. The illusion of reasonableness was pricked by US regulators. They said it was a fraud and disgorged a massive fine in settlement. Many other banks were fined later for doing similar things.
As already noted, to stave off government intervention during the financial crisis, Barclays’ lawyers presented payment for an injection of Qatari funds as a consultancy agreement.Footnote 70 It was an illusion that helped mislead various people externally (and possibly internally) about the deal. The Union Bank of Switzerland (UBS) commissioned a lawyer to review an alleged rape investigation. A judge said lawyers and the bank cherry-picked ‘conclusions that were favourable to and exonerated the Respondent’.Footnote 71 The illusions that they had handled the case properly took something of a beating, although the lawyer involved was not disciplined after the SRA investigated but decided to take no further action, with her former firm saying she had been exonerated.Footnote 72 In the first two cases, at least, a strongly arguable case can be made that the lawyers knew what they were doing was illusory.
The idea of legality illusions is derived from Dean Curran’s ‘risk illusions’ which itself draws on Ulrich Beck’s idea of ‘organized irresponsibility’.Footnote 73 Their work suggests:Footnote 74
the social production and distribution of risk in a context of organized irresponsibility, where organized irresponsibility may be glossed as a social relation in which agents, through the interaction of their acts with others’ actions, collectively create risks for which they are able to avoid being held individually responsible.
In other words, irresponsibility and illusion are products of a system, made of the actions, the agency of individuals, but that can be blamed on the system. Irresponsibility is institutionalised. Again, the recusal application is a central example in the PO scandal. Lord Grabiner’s evidence is that he was merely advising in the way that his role demanded; the board says it cannot be criticised for following his advice. If we accept their views, then there is a system of risk being created for which no one is accountable. Under this model, individuals may be powerless to prevent such risks eventuating. If they are right, a lawyerly duty of zeal means facts and arguments are inevitably slanted, because the system demands it.
More generally, in the PO scandal a willingness to slant evidence and advice as it passed through many hands certainly contributed to the ways in which the contracts constructed an illusion of fault; the prosecutions an illusion of crime; and the reviews illusions of propriety, safety, and soundness – as well as the strategies of excess that were held out as proper: in contract management, in litigation, and in the legal team’s contribution to political engagement and PR.
At almost all stages along the chain, the PO managers and lawyers would (I think) argue that they were engaged in the good faith management of uncertainty which allowed or required a margin for slanting. They may, with hindsight, have got decisions X, Y, and Z wrong. They may not have disclosed facts A, B, and C, or utilised NDAs or SLAPPs, or overclaimed professional privilege, but what they were really doing is simply what the rule of law required of them: interpreting the facts and law to their client’s advantage, as is their right.
An alternative view is that this is a system excuse. To say simply ‘I am defending my client’s rights, as I am obliged to, on the facts as they tell me’ is an abstraction which starts to disintegrate as the lawyers become tightly woven into the client’s actions and do (or should) realise their complicity in the creation of wrongs.
Considering irresponsible orthodoxies in context shows how vital it is that the rule of law is professionally and responsibly acted on. Considering the purpose of lawyering in these circumstances is crucial; assessing the quality of these professional judgements can only be done in context. Nonetheless, legality illusions, like risk illusions, are a product of the system’s logics and practices. They are made of individual acts, often smaller failures in themselves than the problems they lead to. They may be difficult but not impossible to resist at the individual level. Taking a nice little legal point, shaving a sentence in an expert’s report, not lifting a rock that the client seems to be sitting on, redacting Gareth Jenkins’ name from a key document – these are choices that should be assessed in context, under the accumulating experience of those involved.
None of these explain the scandal on their own, none of them are equal to the scale of the disaster, and not all are necessarily actionable misconduct, but together they have created something truly awful. Part accident, part misconduct, but also, potentially, part conspiracy to pervert the course of justice. My argument is that what joins them together are professional frailties, irresponsible orthodoxies, and, amongst some lawyers and clients, an appetite for legality illusions.
Conclusion
What should we do about these problems? Honest representations of facts on the ground and objective, balanced legal advice are not much to ask, and yet they are more difficult to achieve than they look. Part of the answer involves us challenging some of the less helpful orthodoxies of zealous ideology and requiring practitioners to think more contextually and with a keener eye on the consequences of their actions. We also need to find ways of ensuring accountability for the risks they and their clients take. I emphasise the latter because it is absolutely not all about lawyers, but equally it is not all about feckless or overweening clients.
The importance of context and accountability requires thinking about ethical lawyering as an institutional and behavioural practice. Rules and enforcement are important, but so too are defining the structures and behaviours that active independence (of which objectivity is an important part) requires. Thinking about the purpose of lawyering in any situation helps us think about what is really influencing decisions. Understanding ethics in its social and psychological context suggests we should spend less time on political philosophy and more on a basic and practical question: what do we need to do to promote more rigorous, honest integrity and independence of judgement?
The professional codes demand these but are being undermined in practice by zeal culturally embedded in various ways, including irresponsible orthodoxies. We can see this culture in what is bought and sold in the market for legal services. Let me illustrate with two examples. Until recently, the chambers of one of the leading barristers involved in the PO scandal marketed his services ‘as a steam roller that crushes anything getting in his way’.Footnote 75 And another, again until recently, was being sold like as someone who can turn ‘a pile of refuse into something that looks great’.Footnote 76 Steamrollers or a magician with refuse are how legal services were being sold at the apex of the Bar.
If I am steamrollering my opponents or rendering refuse golden, we see how deeply embedded ideas of aggression and illusion are; what the real purpose of fearlessness and zeal is; and what clients think, and are encouraged to believe, that the orthodoxies work towards. It is mercenary logic dressed up in professional finery.
Integrity, independence, and respect for the rule of law are threatened by these excesses of zeal, irresponsible orthodoxies, and a taste for legality illusions. In the PO cases, it looks like lawyers were leading the line on their creation. We should take profoundly seriously the problems this creates. It is a larger problem than one enormous scandal. Sir Brian Langstaff’s report on the infected blood scandal defined a ‘cover-up’ as ‘Deliberate concealment, a lack of candour, the retelling of half-truths, and the massaging of risk’.Footnote 77 His definition is almost like a list of my orthodoxies. Cover-ups are not always but, of course, are not uncommonly legality illusions. What should we do about them? To restrain them we need to punish the failures that amount to misconduct. All of them. But what else? We also need to think more fundamentally about the system’s rules and approaches: that’s what the next chapter is about.
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