Next up, Nigel Duncan and Sally Hughes, City Law School, on corruption, and particularly in the field of corporate work. Their work goes to the core of legal ethics. Has corruption gone mainstream? The 2008 financial crash exposed systemic corruption within major banks and financial services corporations — ‘too big to fail’. Sally and Nigel ask how a new generation of lawyers, working independently or within the system, can be prepared for a uniquely and challenging role.
They took a case study — HSBC. The UK’s largest publicly quoted corporation and third largest bank work wide by assets — allegedly money laundering for Mexican drug barons, with HSBC settling under a Deferred Prosecution Agreement for $1.9B plus an external sactions programme. No prosecution of bank or bank employees. Swiss authorities fined HSBC for money laundering, though. Now, HSBC is threatening a UK withdrawal: there was doubt cast on assurances of internal monitoring (the bank’s solution to its problems), and with the US authorities in particular reporting that compliance procedures were inadequate. How did HSBC get away with it? Self-monitoring and compliance allow global businesses to negotiate justiciable issues; leaves the arena of accusatorial, open justice, and potentially undermines the rule of law. Criminal prosecutions are limited to individuals.
Law firms and lawyers, similarly, are driven by big money. The corporate structures for law firms have diversified, and employment within the big commercial firms serving the corporate world is valuable, competitive but potentially tenuous for the individual. The banks’ global legal spend is now at £200B, with RBS’s ‘litigation war chest’ set at £1.9B, ie serious money is being allocated (by a bank owned by the public) to defend the bank in actions related to securities issues.
What are the drivers for new lawyers? Valuable long-running contracts with rich businesses contrast with stereotypical law firms in which a lawyer has a transient, idvidulaised client base. The SRA has identified key risks to regulatory objectives in this, including lack of independence, and the balance of power between client and lawyer. The clashing cultures included legal ethics based on legalisms and legalistic concepts.
The Anti-Corruption Academic Initiative has prepared curriculum development resources at wwww.track.unodc.org/Education/Pages/ACAD.aspx. But this is all about the rules. How does this prepare the individual to face the challenges of corruption? Nigel cited the qualities outlined by James Rest — moral blindness, faulty reasoning, lack of motivation and ineffectiveness — as giving rise to corrupt practices (four component model of morality — Rest 1983). Moral capacity predictors include moral sensitivity, moral judgment, moral motivation and moral implementation.
If we only teach the law, we encourage efforts to minis ethical rules through interpretation. This approach fails to develop capacity to recognise ethical dilemmas, analyse and justify ethical decisions, enrolees and adopt professional values and much else.
How could we assist students to develop these capacities?
- experiential methods that engage the affective as well as the cognitive domain.
- Hartwell: teaching legal ethics and professional responsibility in small highly interactive seminars had a strong positive impact on students’ moral judgment
- Bebeau: introducing comprehensive ethics curriculum had a marked impact on student scores on Defining Issues Test
- Gentile, Giving Voice to Values: well-established approach to developing the capacity for moral implementation.
Nigel then had us work in groups on the question, ‘how would you like to help your students to understand this challenge and to gain experience of addressing it?’ Consider: materials you would need to prepare, activities students would undertake, how you would encourage reflection, and how this would fit into the curriculum. Lots of interesting discussion, eg about bringing in people who had been involved in corruption, clicker classes, simulation (digital and f2f interviews, + debriefs), video clips. Discussions etc to be embedded in substantive law programme, and identity to be key focus for the curriculum.
Very good session.
**Update**
Session slides are here, and workshop group responses here. Thanks Nigel!