Obligation, Self-Regulation, Lawyers, and Climate Change - Exploring the Scope of Duties to Advise
14 March 2022
By Sarah de Gay, Visiting Professor at UCL Laws
The independence of the legal profession is an important part of the rule of law. Self-regulation is one of the many components that makes up this complex idea of professional independence. Since the Legal Services Act 2007, solicitors have been regulated by a statutory body, the Solicitors Regulation Authority (SRA). And The Law Society (TLS) has been relegated to a representative role (although the exact contours of what the SRA can or should do and what TLS can or should do are still debated). This means that, as a starting point, the SRA writes the rulebook on what solicitors should do, both in terms of the overarching principles that guide solicitor and law firm conduct and in terms of specific rules on practice. But the SRA is not the only regulator in this space that sets out what is expected of solicitors. Contractual, tortious, and fiduciary relationships are also in play. And professional associations, not just TLS but those like the Net Zero Lawyers Alliance whose sole focus is the climate change crisis, have a role, as do clients.
When it comes to climate change, I think two questions are both important and worth exploring. First, is there an obligation on solicitors in England & Wales to advise on climate-related risks? And, second, if so, what sort of obligation is that and who gets to decide what sort of obligation it is? These are questions of self-regulation (and thus independence and the rule of law) but they also show how whatever form or meaning we wish to give to the rule of law (and its practical operationalisation by solicitors) it exists in a complex space of rules (professional, contractual, tortious, fiduciary etc). That is, we cannot think of climate change and the rule of law and what it might expect of practising solicitors without also reflecting on the other norms and obligations to which solicitors are subject.
On that first question - “Do solicitors in England & Wales have a legal duty to advise their clients on climate-related risks?” – the initial answer is “most likely yes”. It’s not a universal “yes” because the answer is retainer-specific and will depend on a variety of factors including: how sophisticated the client is; what the law firm’s T&Cs and the client’s Outside Counsel Guidelines say; whether the law firm is a large City/commercial firm; what the firm has said publicly about its ESG-related credentials; what climate-related initiatives the firm has voluntarily signed up to; the extent to which the firm chases trusted adviser roles with its clients, and so on. And, even when all the relevant factors align, it’s not an “absolutely yes” response because the common law authorities do not (yet) specifically address climate conscious lawyering and there is no specific legislation or regulation that clearly stipulates that a duty to advise on climate-related issues exists. Much, then, will depend on first principles, which seems unsatisfactory for a number of reasons.
One is that the body of negligence case law on solicitors suggests that the exact limits of the duty to exercise reasonable care and skill is often fact dependent. And whether any duty has been breached requires reflection on whether any given solicitor has acted in accordance with practice accepted as proper by a responsible body of fellow professionals, often referred to as the “reasonably competent practitioner” test. This means that, in the absence of a regulator or the legislature stepping in, the profession could and can define for itself whether a duty to advise on climate risks exists and, therefore, what the standard is in relation to climate conscious lawyering. This might align with fundamental ideas of self-regulation and independence (and thus the place of solicitors in relation to the rule of law) but it also poses challenges. For example, self-definition might not result in one uniform standard for the whole profession. In the 1984 case of Maynard, the courts said that when considering the duty of care owed by a specialist consultant, the standard was the ordinary skill of a medic with that speciality and not a generalist. City lawyers, to take just one example, are probably specialists as a collective. We know this from remarks made in 2007 the case of Hicks v Russell Jones & Walker. It would be absurd, the judge said in that case, to hold RJW to the same standards as, say, “a small country firm”. The judiciary are unlikely to be given the opportunity to clarify this messy situation anytime soon. The development of the law of negligence is, as we know, completely dependent on the right cases getting to court and a professional negligence case with a climate change-related allegation at its heart which does not settle at/before the court door could be many years away.
In the absence of judicial opportunity, the obvious body to step in to clarify the position is perhaps the SRA. The SRA has been tasked, since 2007, with leading the charge on setting the expected standard of competence for solicitors, in the public interest. Although there may be no universal understanding of what constitutes the “public interest” in legal circles, many may feel emotively that setting climate change-related competency must surely be in the public interest given climate change promises to change the lives of future generations immeasurably. Whilst, so far, the SRA has been silent on the matter of climate change and competence, TLS has stepped in to fill the silence and, in doing so, may even have contributed to filling the regulatory gap. In October 2021, TLS published a Climate Change Resolution which, among other things, urges solicitors to provide “competent advice to their clients on…the potential legal risks and liabilities which may arise from action or inaction that negatively contributes to the climate crisis”. And so it seems that the profession’s former regulator either thinks that a duty to advise on climate-related risk exists now or that it should. This has the potential to be quite powerful. Most notably because the more solicitors who rise to the challenge, the more likely it arguably is that a duty to advise could be created. Whilst that particular clock ticks, there are other indirect regulators in the mix who may conceivably have a more immediate impact, including clients and the “talent”.
Clients are backdoor regulators of their favoured law firms in many senses. We have seen them make increasingly serious demands in the diversity arena. In 2020, 170 Corporate GCs signed an open letter to law firms lamenting that new partners “remain largely male and largely white” and vowing to prioritise their legal spend on those firms committed to diversity. This bottom line incentive could conceivably be part of the armoury this powerful cohort employ, in the future, in relation to climate conscious lawyering. Further, any law firm is by and large a people business and currently there aren’t enough associates to staff M&A deals, so what good associates think/say, and what motivates them to join and stay at a firm, also has the potential to play a role in standard-setting too. At the moment, large law firms seem to be competing for associate talent by offering bigger (and bigger) salaries. In short, they are throwing money at the problem. But at the same time, there is a sense that increasingly younger lawyers want to feel connected with their work, and do not wish to leave their personal values at the virtual/actual office door. Many large corporates have become purpose-led and some law firms are following suit.
How becoming more purposeful impacts on the work a law firm feels able to do is not yet something which is fully understood. Time will tell. But if (and I appreciate that for some this may feel like a big “if”) the law firm partners of the future genuinely wish to achieve fulfilment and not just legal mastery in their work, and if salary/pay only matters to them so much, then the current war for talent may ultimately be won by the most purposeful law firms. These purposeful law firms could begin to lead the charge in professionalism in this area and step in with climate conscious lawyering ambitions for the sector not yet seen from its regulator but encouraged by its representative body.
Image credit: The wub, CC BY-SA 4.0, via Wikimedia Commons
Climate Change and the Rule of Law
The Climate Change and the Rule of Law blog invites contributors to reflect on emerging issues and relations between climate change and rule of law.