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Ethics: Morality versus enforcement

Every Issue

Cite as: (2004) 78(10) LIJ, p. 74

The First International Conference on Lawyers’ Ethics was held in Exeter in the UK in early July this year.[1] While few practitioners were present, the issues discussed underline why ethics – good and bad – will continue to define lawyers in society.

Dr Randal Graham, of the University of Western Ontario, was impatient with traditional legal ethical guidance because that guidance comes solely from differing versions of morality.

Dr Graham believes the language of morality is so “all over the place” that it provides no workable basis for the sanction of unethical behaviour. Thus, you might believe in being “fair” to your children and your clients, but not necessarily to your siblings or your opponents. Similarly, the actual definition of the “fairness” you believe in could be very different to that of your fellow partners or associates. When many of us either do not believe in a God, or have many gods, or cannot be sure either way, there is no longer a common basis for morality and this, of course, leaves so-called “moral” decision making in the air.

To fix this problem, Dr Graham wants to “supplement” morality with a micro-economic analysis of enforcement (that is, of “market failure”) as a guide to developing punishment tariffs within lawyers’ conduct rules.[2]

Thus, if a particular problem with ethical functioning adversely affects the cost of servicing a client by adding, perhaps, the cost to the firm of a dispute resolution process, then the level of ethical functioning would be an identifiable cost for the firm and, therefore, significant to the partners.

For example, if the Brisbane solicitor who advised George Herscu’s company (Caboolture) to frustrate proceedings by a creditor for debt recovery by falsely alleging fraud against the creditor[3] had considered that the false allegation would likely lead to liability for a multi-million dollar costs order, would the firm’s other partners have required an ethical risk assessment carried out on the fraud allegation?

Dr Graham would assess and introduce a tariff of Professional Conduct and Practice Rules 2003 penalties, to ensure that the financial and other costs associated with each breach were set according to a progressively costly risk-avoidance formula. Dr Graham’s approach reminds me of the various pressures for measurement in quality assurance or risk avoidance in other sectors.

This desire for precise measurement of risk also sounds like the current discussion in NSW, where the state government is seriously looking at replacing item-by-item fee scales with lump sums fees which favour early settlement of civil actions, so that both clients and their lawyers know, in advance, exactly what legal costs will be incurred in each succeeding stage of a civil proceeding.[4]

There is, of course, a lot to commend the contribution of assessment to standards setting and rule enforcement,[5] but, in the context of prevention of unethical behaviour, Dr Graham’s approach might do more than supplement morality: it might come to dominate the agenda and become an exclusive economic strategy to control unethical functioning.

Micro-economic assessment likely has a role in penalty setting, but it will have to be kept in tension with traditional ethics, because we won’t be able to get away from some baselines about morality when it comes to defining ethical norms, even if those norms are somewhat slippery. Irrational human factors often typify ethically offensive behaviour and it is difficult to see how we can simply impose sanctions without regard to that “emotional” variable, since “[e]very economic act, being the action of a human being, is necessarily also an ethical [or unethical] act”.[6]

To my mind, the most intriguing, unresolved question in this debate is: if the profession was to expand the emphasis on character and individual responsibility as a basis of ethical debate and include a certain and incremental economic incentive to better conduct in all cases, who would set the penalty tariffs and from what moral position will they proceed? Have we not now accepted that every intellectual act is also an emotional act?

ADRIAN EVANS is associate professor in law at Monash University and former coordinator of Springvale Legal Service Inc.

[1] New perspectives on professionalism: educating and regulating lawyers for the 21st century”, 6-8 July 2004, University of Exeter, UK.

[2] Randal NM Graham, Legal Ethics: Theories, Cases and Professional Regulation, Ch 4, Emond Montgomery Publications, (forthcoming 2004).

[3] White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169.

[4] Katherine Towers, “Time’s up for billable hours, say leading experts”, 3 September 2004, The Australian Financial Review, p52.

[5] See, for example, Adrian Evans and Clark Cunningham, “Speciality certification as an incentive for increased professionalism: lessons from other disciplines and countries” (2003) 54(4) South Carolina Law Review 987-1009.

[6] Jonathan B Wright, “Efficiency unprofitable without ethics”, The Australian, 24 September 2003, 32.


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