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Disciplinary and Regulatory Proceedings is the leading work on this important and dynamic area of law. For 20 years it has provided authoritative guidance to lawyers, tribunals, and other experts dealing with professional discipline and regulation.

The independence of legal assessors

Many disciplinary and regulatory tribunals in this country comprise or include lay members and it is normal practice for such tribunals to have the assistance of a legal assessor. The legal assessor is not a member of the tribunal, nor is his role analogous to that of a judge with a jury. In the words of Lord Radcliffe, his task is:

‘… confined to advising on questions of law referred to him and to intervention for the purpose either of informing the committee of any irregularity in the conduct of their proceedings which comes to his knowledge, or of advising them when it appears to him that, but for such advice, there is a possibility of a mistake of law being made.’ (Fox v General Medical Council [1960] 3 All ER 225, (1960) 124 JP 467.)

The decision of the European Court of Justice in the case of Akzo Nobel Chemicals & Akcros Chemicals v Commission & Ors (Competition) [2010] EUECJ C-550/07 should make regulators and professional bodies re-examine the practice of regulatory and disciplinary tribunals being assisted by in-house legal assessors.
In Akzo the Court decided that communications between in-house counsel and internal clients were not privileged in relation to EC Commission competition investigations, including ‘dawn raids’. This decision is important enough in its own context, but the Court’s reasoning raises important issues for regulators and professional bodies outside the context of the litigation.
The ECJ held that, in order to be protected by legal professional privilege, written communications must be exchanged with ‘an independent lawyer, that is to say one who is not bound to his client by a relationship of employment’. The requirement of independence, they concluded, means the absence of any employment relationship between the lawyer and his client, so that legal professional privilege does not cover exchanges within a company or group with in-house lawyers. An in-house lawyer, despite his enrolment with a Bar or Law Society and the professional ethical obligations to which he is, as a result, subject, does not enjoy the same degree of independence from his employer as a lawyer working in an external law firm does in relation to his client. Consequently, an in-house lawyer is less able to deal effectively with any conflicts between his professional obligations and the aims of his client.
In an important passage the Court observed:

‘It is true that an external lawyer is also economically dependent to some extent on his clients. If a client is not satisfied with the legal advice or defence provided by his external lawyer, the client may withdraw the instruction or, as the case may be, refrain from engaging his services in the future. It should be noted in this regard that, unlike enrolled in-house lawyers and other corporate jurisconsults, external lawyers do not have any protection against dismissal. For lawyers who make their living largely from giving advice to and acting in legal proceedings on behalf of one or a small number of large clients, this may come to pose a serious threat to their independence.
‘However, for external lawyers, such a threat is and remains more of an exception and is not consistent with the typical role of a lawyer in private practice or of an independent law firm. A self-employed lawyer usually works for a large number of clients, which, in the event of a conflict of interests between his professional ethics and the aims and wishes of a client, makes it easier for him, if necessary, to withdraw his services of his own accord in order to safeguard his independence.
‘In the case of an enrolled in-house lawyer, the situation is different. As an employed person, an enrolled in-house lawyer is typically rather than only exceptionally characterised by complete economic dependence on his employer, who alone provides him with most of his income in the form of a salary. In so far as the relevant national rules of professional ethics contain any provision at all allowing enrolled in-house lawyers to take on external instructions alongside their activities as employees of the undertaking for which they work, such instructions will generally be of only minor financial significance to them and will in no way alter their economic dependence on their employer. The degree to which enrolled in-house lawyers are economically dependent on their employer is therefore usually far greater than the degree to which external lawyers are dependent on their clients. The fact, raised by a number of the parties to the proceedings, that enrolled in-house lawyers are protected against dismissal under employment law likewise does nothing to alter their economic dependence.
‘In addition to their economic dependence on their employer, enrolled in-house lawyers usually exhibit a considerably stronger personal identification with the undertaking for which they work, as well as with its corporate policy and corporate strategy than would be true of external lawyers in relation to the business activities of their clients.’

Tribunal members, like judges, are required to be independent of the prosecutor, both at common law and, in the case of public authorities, under the European Convention on Human Rights. The test for independence was laid down authoritatively by the House of Lords in the case of Porter v Magill and another [2002] 1 All ER 465; [2001] UKHL 67; [2002] 2 AC 357 and does not need to be repeated her. There seems to be little doubt that the requirement for independence applies to the tribunal’s legal adviser as much as to the tribunal members. In the case of Clark (Procurator Fiscal, Kirkcaldy) v Kelly [2003] UKPC D1, for example, Lord Hoffmann had to deal with the office of clerk to the justices (which bears comparison in this respect to that of a legal assessor to a tribunal). He remarked:

‘… it seems to me that the position of the clerk, whether one chooses to describe him as part of the tribunal or not, is such as to attract some requirements of independence and impartiality by virtue of art 6(1). I cannot imagine that it would be regarded as acceptable, for example, that the clerk should advise the justices when he is the father or some other close relation of the victim of the offence for which the accused is being tried. Stone's Justices' Manual (2002) says in relation to clerks in English magistrates' courts that '[t]he test of apparent bias which applies to magistrates … applies also to the justices' clerk since he is part of the judicial process in the magistrates' court'. That seems to me in principle correct.’

Akzo presents no problems so far as concerns legal assessors in independent practice: the problem lies in the common custom of tribunals being advised by legal assessors who are in-house lawyers. The clear implication of the reasoning in Akzo is that such assessors cannot satisfy the test of independence from the prosecution. Regulators and professional bodies should urgently re-consider their arrangements in light of this decision.
It may be questioned whether the Court’s assessment of the independence of lawyers in private practice is somewhat rose tinted and whether their criticism of in-house lawyers is based on evidence rather than assumptions. Some partners in City firms are so close to their clients, sometimes even embedded within their firms, that the temptation to produce income to the detriment of professional independence must be great. And in all my years of working in the regulatory field I am unaware of any suspicion of partiality on the part of an in-house legal assessor.
BH

 

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