Scope of the inquiry
The Women and Equalities Committee is to consider the issue of sexual harassment in the workplace, including who is most likely to experience it, how cases are handled, and the protections available under the law. Research suggests that more than 40% of women and more than 18% of men have experienced some form of unwanted sexual behaviour in the workplace, ranging from unwelcome jokes or comments of a sexual nature to serious sexual assault.
On 31 January, the Committee heard oral evidence from experts on employment and law, in a one off evidence session. From this the committee are now launching a full inquiry to consider in more depth issues covered in that session. The committee are inviting evidence specifically on:
- how widespread sexual harassment in the workplace is, and whether this has increased or decreased over time
- who experiences sexual harassment in the workplace, who perpetrates it and what the impact is on different groups
- actions that the Government and employers should be taking to change workplace culture to prevent sexual harassment, give people more confidence to report sexual harassment, and make this issue a higher priority for employers
- how workers can be better protected from sexual harassment by clients, customers and other third parties
- the effectiveness and accessibility of tribunals and other legal means of redress and what can be done to improve those processes
- the advantages and disadvantages of using non-disclosure agreements (NDAs) in sexual harassment cases, including how inappropriate use of such agreements might be tackled
This inquiry will sit alongside another related inquiry on the Sexual harassment of women and girls in public places.
Oral evidence session: Wednesday 25th April 2018
Evidence given by:
- Paul Philip, Chief Executive, Solicitors Regulation Authority
- Andrew Taggart, Partner for Employment, Pensions and Incentives
- Herbert Smith Freehills LLP
- Francesca West, Chief Executive, Public Concern at Work.
- Susan Clews, Chief Operations Manager, Acas
- Diana Holland, Assistant General Secretary for Transport, Equalities, Food and Agriculture, Unite
- Marion Scovell, Head of Legal, Prospect.
Questions by Philip Davies MP:
Q212 Philip Davies: Mr Philip, you recently sent out a warning notice on the use of non-disclosure agreements, which I have in front of me here. To what extent is this guidance new?
Paul Philip: As we say at the end of the third bullet point of the first paragraph, the warning notice provides a reminder. There is nothing new in this warning notice. We are highlighting to the profession their professional responsibilities in this area.
Philip Davies: There is nothing new here.
Paul Philip: There is nothing new here.
Q213 Philip Davies: Why did you feel it was necessary, then, to remind solicitors of their ethical responsibilities in this area, given that there is nothing new in it?
Paul Philip: As I said earlier, we regularly issue warning notices to the profession. We issue them in a variety of different areas where we see an emerging theme of risk to the public interest. We issued one not so long ago in relation to investment fraud, because there was a theme emerging in relation to a risk to the public vis-à-vis investment fraud. We issued one recently in relation to holiday sickness claims, because there was a real issue in terms of solicitors becoming embroiled in what, on the face of it, looked like unmeritorious claims. We issued one in relation to this mainly because of its increased profile over the last few months. In all of those, it is arguable that there is no new law or indeed no new professional obligation. We are highlighting to the profession that they need to be cognisant of the issues in a particular context.
Q214 Philip Davies: There is nothing new. You issued it because you are aware that there was an issue. In how many cases have you taken enforcement action regarding the inappropriate, unlawful or unethical use of non-disclosure agreements, in the last three years, say?
Paul Philip: As I mentioned earlier, we can only find three open cases on non-disclosure agreements. There have been a number, although like colleagues we have problems with our information systems. If you go back to 2016, we disciplined a solicitor in front of the Solicitors Disciplinary Tribunal for a compromise agreement that sought to stop reporting of particular behaviour to the regulator. Not very much.
Q215 Philip Davies: The bit I am confused about, if I am perfectly frank, is that in your answer to Jess earlier, when she particularly asked about a non-disclosure agreement including provisions not to report matters to the police, you said that that would be quite clearly an issue of professional misconduct, which would seem to be clear-cut. Yet last week or whenever our last evidence session was—and I presume you have read the transcript of the evidence session regarding Zelda Perkins and Allen & Overy—we published the non-disclosure agreement. It is there for everybody to see. That agreement quite clearly stated in it—there is nothing hidden in there—about people not referring matters to the police and not, as Jess said, referring people for medical assessment and not being given a copy of the transcript. All of those things are in your guidance and your warning notice. It is all in there; you have said that those things are completely unacceptable. That was there for you to see. We asked the solicitors’ firm concerned whether that was referred to the SRA and they said it was. They also said, as a result of that, the SRA had decided not to take any action and had closed the matter. How on earth can you sit before us today, saying all these warm words, when you have, right in front of your nose, the clearest example of the things that breach your warning notice? You have said yourself, in front of the Committee, that this is professional conduct and yet, outside of this room, you see a big law firm and do not decide to take any action about them. How can you sit there and look us in the eye about this particular issue, when you have single-handedly done nothing about a case that is right in front of your nose?
Chair: Philip, before Paul answers, I would like to ask him if he is aware of a letter that we were sent—which we decided as a Committee not to publish, because we were told it was strictly private and confidential— from Mr Mansell to us, when we asked him that question. We asked Allen & Overy if they should self-refer the case, and we were told that the compliance officer had “met with the SRA in order to discuss in detail the issues that you mention in your letter”—that is the letter from the Committee—“Following that meeting, the SRA communicated that they did not intend to take any further action. They did not provide any more information”. We contacted the SRA yesterday and we had slightly contradictory information coming back from your organisation. I just wanted to make you aware of that before you answer the question. The slightly contradictory information was that there may be an open case. We are therefore quite concerned that Allen & Overy is unaware of this; I would hate to think that they have misled the Committee.
Paul Philip: I doubt they have misled the Committee. It is fair to say that we have a number of ongoing informal discussions with firms before we decide to open a formal investigation. The answer to the question is that we have an open investigation in relation to this matter. We have exercised our statutory powers to seek the relevant documentation from the firm, and it is ongoing. If we find that any lawyers in the firm have seriously breached our guidance, we will take action against them.
Q216 Philip Davies: What is the “if”? Which bit of the non-disclosure agreement is it? It is pretty obvious for everyone to read; it is all there in front of you. With which bit of it is there any doubt about whether it breaches your guidance or not?
Paul Philip: I can see that. I have an open investigation in relation to a firm and I think the due process should be followed. It is not appropriate for me to continue discussing an open investigation I have in relation to an English law firm.
Q217 Philip Davies: How long will this investigation take to conclude?
Paul Philip: It will take a matter of weeks, perhaps months. These matters take time. They take time because they deal with legalities. They take time because the information that it relates to is 20 years old. If we find that there has been inappropriate behaviour by a solicitor of a law firm, we will take action; that is why we have an open investigation.
Q221 Philip Davies: Is there any reason why you would not have asked for it?
Paul Philip: I suspect at the time the issue was whether or not taking action against the law firm was proportionate, given the age and given the seriousness of the concerns. I think, at that point in time, we should have asked for it; I agree with you.
Q222 Philip Davies: You have just said that there is nothing new in this guidance, so surely the age should not be relevant. Should it? You are the one who said there is nothing new in the guidance that has been put out. It is not as if you are applying something retrospectively.
Paul Philip: That is correct. We should have received the non-disclosure agreement and we are seeking various pieces of information from the firm. Once the firm has had an opportunity to make its representations to us, we will make a decision.
Q223 Philip Davies: It leaves a taste in the mouth that the SRA’s relationship with solicitors is like some sort of cosy old boys’ network kind of thing, where you are scratching each other’s backs and not really taking anything seriously. Are you not rather embarrassed about this?
Paul Philip: The fact is that we receive 12,000 complaints about solicitors every single year. We take action in relation to about 1,000 of those and about 200 to 300 of those are prosecuted in front of the Solicitors Disciplinary Tribunal. I doubt, if you were to ask the average solicitor if they felt that the SRA was a cosy organisation that acted in their interest, they would.
Q224 Philip Davies: Maybe it is just a cosy organisation for big solicitors’ firms. If I was to ask the average solicitor, maybe they would not say that. Maybe if I was to ask the big solicitors’ firms, they would think it was a bit more of a cosy old boys’ club.
Paul Philip: Indeed, and if you were to so do, you would find that we have taken a number of significant pieces of action against large solicitor firms in the past three years.
Q225 Philip Davies: Will you give us an update on the progress of this particular case, the outcome of it and an explanation of the reasons for the outcome of it?
Paul Philip: We will update the Committee on the progress once the matter is concluded, absolutely.
Q226 Philip Davies: Do you fear that sometimes lawyers seem to have a great deal of knowledge about acting in the best interests of their clients, but not often about how to act ethically?
Paul Philip: If there is an issue—and Andrew and I were discussing this outside—lawyers are very clear about acting in the best interests of their client. At times, I personally think they need to be clearer about their obligations to the court and to the rule of law. This is a case in point. The bottom line is, where there has been a crime committed, a sexual offence committed, that should be reported to the police. The real issue that the lawyer needs to ask themselves is why it would not be reported to the police.
Q249 Philip Davies: Has Unite the Union ever asked one of its employees to sign a non-disclosure agreement?
Diana Holland: Not to my knowledge.
Oral evidence session: Wednesday 28th March 2018
The Women and Equalities Committee holds an evidence session for its inquiry into sexual harassment in workplaces which focuses on the use and possible abuse of non-disclosure agreements
Non-Disclosure Agreements is a catch-all term for agreements that include confidentiality clauses – sometimes referred to as gagging clauses.
They are used in employment contracts for a range of purposes including, for example, protecting intellectual property, trade secrets or other confidential information such as customer details.
They are also commonly used in agreements that are reached between employers and employees when employment is terminated (known as settlement agreements).
However, there has also been criticism of their use in sexual harassment cases, with concerns that they may be used to conceal improper, discriminatory or even illegal behaviour or to impede reporting of such behaviour to the proper authorities.
Purpose of the session
Issues covered in this session include:
- the benefits and risks of NDAs; the effect their use can have on those who sign them;
- the provision of advice to individuals signing NDAs;
- whistleblowing and enforceability;
- content and potential for abuse;
- ethics and regulation.
The Committee hear witnesses' suggestions for reforms to ensure that NDAs are not misused in cases where sexual harassment is alleged.
Evidence given by:
- Zelda Perkins, former assistant to Harvey Weinstein
- Mark Mansell, Partner, Allen & Overy
- Tamara Ludlow, Partner, Simons Muirhead & Burton
and finally by:
- Max Winthrop, Chair of Employment Law Committee, Law Society
- Suzanne McKie QC, Founder, Farore Law
- Gareth Brahams, Chair, Employment Lawyers Association
Questions by Philip Davies MP
Q76 Philip Davies: First of all, can I thank you for coming in? It is very brave of you to come and revisit such a traumatic experience in your life. I am sure I read somewhere—and I cannot put my hands on it at the minute, so I just wonder whether you could confirm this—that your lawyers told you that the most you could expect to get was a year’s salary. Is that right?
Zelda Perkins: Yes.
Q77 Philip Davies: Could you tell us how much that was at the time?
Zelda Perkins: It was about £20,000 for me, and for my colleague it was about £16,000.
Q78 Philip Davies: But you ended up being paid considerably more than that.
Zelda Perkins: Yes.
Q79 Philip Davies: Am I right in thinking—again, I am pretty sure that I read it—that they eventually paid you the amount that you originally requested? Is that right?
Zelda Perkins: Yes. The whole payment thing was complex, because we were told initially that we had to enter into an agreement. I said, “There is no way that money will change hands in an agreement, because that will not dignify the situation”. I was told that that was how you started this sort of agreement, that the only way that I would get any of the things that I wanted to happen was by asking for a financial damages settlement to start with. When we were told that it was traditional to ask for a year’s salary, at this point, I said, “If we are asking for money, the money has to be proof. It had to be indicative of the crime. It has to show the guilt of what has happened”.
Q80 Philip Davies: Absolutely. This is my final question, on the back of those preliminary ones. During all these hours of negotiations—until 5 o’clock in the morning and what have you—how big of a focus was it for Harvey Weinstein’s lawyers to knock down the amount of money that you were requesting? Was it all about the conditions?
Zelda Perkins: No, it was all about the conditions.
Q81 Philip Davies: The money that they were paying, as far as you were concerned, was not an issue to them.
Zelda Perkins: We did not start negotiations until we had agreed on the financial settlement, because we felt that otherwise the negotiations would be about the money. That happened before we even entered negotiations, and that happened over a day’s period. My lawyers told me, “If you ask for this, the whole thing is going to be taken away”, but it was agreed to within 48 hours.
Q96 Philip Davies: First of all, have you ever pushed back on something that a client asked to be included in an agreement that you thought was unethical?
Mark Mansell: Yes, I have, if things are being asked for that go against the rules of conduct. There are things that you can or cannot ask for. Again, I think Ms Perkins referred to the whistle-blowing law, which has come in since the agreement she signed was entered into. It is not possible to restrict an individual’s ability to raise those protected disclosures. I would always make that clear. I would also advise a client if what they were asking for was not advisable, even if it was permissible. I would advise them that that should not be included. Yes, my obligation to the client would be to go wider than simply doing what they ask me to do.
Q97 Philip Davies: You would not allow anything to go into an agreement that you had drawn up that was unethical or against the Solicitors Regulation Authority principles.
Mark Mansell: I would not put anything into an agreement that was unlawful or was against the rules of professional conduct.
Philip Davies: I did not say “unlawful”; I said “unethical”.
Mark Mansell: If you mean beyond the rules of professional ethics, no, I would not allow that to go in.
Q98 Philip Davies: How often is it that an NDA is drawn up and no copy of the agreement is given to one of the parties? Is that common?
Mark Mansell: That is not common, no.
Q99 Philip Davies: In your 30 years of experience, how many times would that have happened?
Mark Mansell: It would be extremely rare—very, very rare.
Q100 Philip Davies: Why would it happen at all?
Mark Mansell: It would happen if somebody was concerned that a document that they signed could come into the public domain. They would want to restrict the number of, and access to, those copies.
Q101 Philip Davies: Would it be reasonable, in a non-disclosure agreement, for somebody to be told that, in any criminal legal process, the person who had the non-disclosure agreement should use all reasonable endeavours to limit the scope of the disclosure as far as possible? Would that be an appropriate thing to go in a non-disclosure agreement?
Mark Mansell: The first thing to say is that it would not be either reasonable or lawful to prevent somebody from participating in a criminal process. There can be situations where there is the possibility of information being given that goes over and above what strictly needs to be done, and it is possible in those circumstances that someone may try to restrict that, but in terms of stopping or limiting an ability to participate in a criminal process I would not see that as reasonable.
Q102 Philip Davies: Just to clarify, is it reasonable to ask somebody in a criminal legal process to use reasonable endeavours to limit the scope of the disclosure as far as possible. Do you think that that is a reasonable thing to put in a non-disclosure agreement, or do you not?
Mark Mansell: A non-disclosure agreement should make it clear that nothing within that agreement would prohibit an individual from participating in a criminal process. Where there is the possibility of confidential information being disclosed that is not necessary for that process, the individual who is seeking to protect those interests has an opportunity to be involved.
Q103 Philip Davies: I am not a lawyer. I was always brought up as a kid to say that you should tell the truth, the whole truth and nothing but the truth. That is what I was brought up to understand, particularly in a criminal process. I am surprised that you are arguing the toss about this. I would have thought that this was quite a simple question. Surely, if somebody is being asked to use reasonable endeavours to limit the scope of disclosure as far as possible, that flies in the face of telling the truth, the whole truth and nothing but the truth, or am I missing something there?
Mark Mansell: I do not think that I am saying that you should not tell the truth and the whole truth, but there may be information that somebody could voluntarily disclose that they do not necessarily need to. If they are asked a specific question, either by the police or during a criminal process, they should definitely be able to answer that.
Q106 Philip Davies: How normal is it to ask somebody to not disclose any information if they require treatment from a medical practitioner as a result of what happened to them? How often would that happen? Would that ever happen?
Mark Mansell: In terms of specifics around those particular kinds of cases, no, that is not something that would happen normally, or usually.
Q107 Philip Davies: Would it happen at all?
Mark Mansell: I cannot think of other cases where it might happen.
Q108 Philip Davies: This has happened, but only in one case. That is what you are saying.
Mark Mansell: Again, I cannot make particular comments about Ms Perkins’s agreement.
Philip Davies: Well, you were making comments. You were taking about “other cases”. I did not talk about any cases; I was asking generally. You were talking about other cases.
Mark Mansell: Generally, no, one would not see those clauses.
Q113 Philip Davies: Do you think that non-disclosure agreements should be used to, in effect, cover up criminal activity?
Mark Mansell: I do not believe that non-disclosure agreements should be used to cover up criminal activity. Again, in my experience acting with both employers and employees, very often both of them want to find a way of resolving that particular issue that allows the individual to move on. The company then has the requirement to deal with that, but certainly not to cover up criminal activity, no.
Q114 Philip Davies: How many times would you have done non-disclosure agreements that were designed to stop somebody going to the authorities about criminal behaviour?
Mark Mansell: If there were a situation where there was potential criminal liability, an individual—and these are individuals, whether I am advising the individual or the employer—would always have the option as to whether they decide to go to the authorities, and to do it through the criminal route. I get involved at a point where they have decided that that is not the route that they want to go down, and they want to reach an agreement. The agreement, then, would deal with things between them and the employer. The agreements that I would draw up would record that it does not affect their legal or regulatory obligations, so it would not prevent them from participating in a criminal process, should they decide to do that. Invariably, their decision is that that is not what they want to do.
Q115 Philip Davies: Looking at the Solicitors Regulation Authority principles, the first one is to “uphold the rule of law and the proper administration of justice”. Do you feel that all the non-disclosure agreements that you have drawn up have complied with that?
Mark Mansell: Yes, I do.
Q116 Philip Davies: You concede that many people would think that one of the parts of one of the non-disclosure agreements that you drew up could be seen as perverting the course of justice. How can that be compliant with upholding the rule of law and the proper administration of justice?
Mark Mansell: Again, I cannot comment on that particular agreement, but I do not believe that I have ever been involved in drafting an agreement that has sought to pervert the course of justice.
Q117 Philip Davies: Or “act with integrity”.
Mark Mansell: Obviously, I have an obligation to my client, but in terms of dealing with things I do believe that I act, and have acted, with integrity.
Q118 Philip Davies: “Behave in a way that maintains the trust the public places in you and in the provision of legal services”. Do you really think that these have been always abided by in the non-disclosure agreements that you have drafted? Are you really, seriously claiming that?
Mark Mansell: I cannot comment on that particular agreement, but with any situation like that, where you have an individual who is legally advised, there is a negotiation, seeking to reconcile the interests of the two parties. I think, in doing that, I am compliant with my obligations.
Q119 Philip Davies: You are saying to me that, if there was a case where the copy of the agreement was not given to the person concerned, where they were signing to, in any criminal or legal process, use reasonable endeavours to limit the scope of the disclosure as far as possible, and where they were not even allowed to give the information to an appropriate medical practitioner if treatment was required, any non-disclosure agreement that encapsulated all those points would uphold the rule of law and the proper administration of justice, and behave in a way that maintains the trust the public places in you and the provision of legal services.
Chair: Can I just caution you before you answer that? People who are listening to this will be able to read this agreement. You are in a difficult position. You are not able to comment on it, but we will be publishing the agreement for people to see the provisions that were included in it, and it has your signature at the end of it.
Mark Mansell: If I look at the situation now, compared to the situation 20 years ago, and at the way in which the law has changed, both in terms of public interest disclosure, whistleblowing, and in terms of regulatory obligations, if one were looking at those obligations today, they may well be drafted in a different way.
Q120 Philip Davies: But you think that they met the Solicitors Regulation Authority principles back then.
Chair: Those principles have not changed.
Philip Davies: I do not think that they have changed a fat lot in the last 20 years. Those principles are pretty standard. They are timeless principles, aren’t they?
Mark Mansell: In terms of the broad principles, yes, those were in place.
Q121 Philip Davies: I repeat the question: would the principles in that non-disclosure agreement, if they were in one, meet the requirements of the Solicitors Regulation Authority? I am saying to you today, candidly, that I do not think they do. That is my view, but I want you to say whether you do.
Mark Mansell: I believe that, at the time I negotiated the agreement, I acted in accordance with my professional duties.
Q122 Philip Davies: How much does it cost to get you to draw up these kinds of things?
Mark Mansell: That would depend on the length of negotiations, but it would cost thousands of pounds.
Q123 Philip Davies: How many thousands? I am giving you an advertising opportunity here. How much does it cost to get you to draw up something like this? You said yourself that this was exceptional. This was not the norm; this was exceptional. How much would it cost to get something like this drawn up?
Mark Mansell: I cannot recall what the fees were, in terms of drawing that up.
Q124 Philip Davies: Were they more than normal?
Mark Mansell: Yes, they would be more than normal.
Chair: Maybe you could write to us on that. Maybe we could get that in writing.
Q193 Philip Davies: Can I just make one point? You might say that, being an MP, I am leading with my chin here, but what does it say about the legal profession that you are all very clear on the Solicitors Regulation Authority’s principle about acting in the best interests of each client, but you all seem so vague and have no idea what on earth is meant by upholding the rule of law and the proper administration of justice, acting with integrity, and behaving in a way that maintains the trust the public place in you and in the provision of legal services? Is it a reflection of the legal profession that one of those is very clear to you, and you seem to have no idea what any one of the other three means?
Suzanne McKie: I disagree. I have been very clear about my views.
Gareth Brahams: What I was trying to say is that there are sometimes boundary disputes. Before you are not acting in the best interests of your client, you have to be equally sure that you are obliged that you cannot do that. For example, sometimes you are obliged to disclose a document that might be harmful to the client. If you take the view that you have to disclose that document, you are clearly not acting in your client’s best interests, but you have to do it, and I have been in that situation many times. I can assure you that I, and most of the solicitors I have ever known, have exercised the highest level of integrity—not everyone, but most. If I was wrong about that, and I did not have to disclose that document, I have also breached a regulatory obligation. These are quite fine judgments. In fairness to Mark Mansell, I will say a couple of things. I can be corrected if I am wrong. Back in the 1990s, while I accept the general principles, it used to be that the SRA rules, or the equivalent, the Law Society rules, were very prescriptive. You used to have a very long book with lots of very detailed rules about how you were supposed to behave in lots of different situations. Over time, they have been slimmed down to being about high-level principle. There were always some high-level principles; I cannot remember what they were back in the 1990s, at the time. I hope that answers your question to some degree. It is not as straightforward as it sounds. I know what you want me to say, which is that we are keener to protect our clients’ interests than we are to uphold integrity and the law. That is not my experience of lawyers generally, and certainly not my personal practice.
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