While I have a degree in law, I also have a Graduate Diploma in Law (referred to as the CPE when I studied it), which was a necessary addition to qualify as a solicitor in England & Wales. In my opinion, having been through both the law degree route and the graduate route, the latter is enough law to get you started in practice.
LRN has published a very interesting report on ethics and compliance within corporates, the 2015 Ethics and Compliance Effectiveness Report, which is of broader significance. It particularly focuses on the vexed issue of whether it is better to separate the compliance and ethics function and in particular whether it is better to have a GC with a Chief Ethics and Compliance Officer (CECO) hat or to have an independent CECO.
Their main way of judging effectiveness is to measure what they call a Program Effectiveness Index (PEI) which looks at the impact of compliance and ethics programmes on:
- providing advice/ counsel, enabling better decision making;
- promoting an ethical culture and values-based behavior;
- celebrating acts of ethical leadership;
- the frequency of employee application of the company code of conduct; and
- the perceived effect of E&C education on employee behavior and decision making.
They then measure the scores on the PEI, total them up as a kind of outcome score and compare them with inputs to see if particular inputs correlate with the higher PEI scores. So, for example, programs in which the senior ethics and compliance leaders report to the CEO are more effective, on average, than those in which senior leaders report to the general counsel. They have tried to concentrate only on significant correlations between inputs and the PEI (though their method of reporting significance is a bit strange) and yet we get quite a lot of correlations to make sense of. LRN would say, not at all implausibly, that this reflects the fact that ethics and compliance programmes are run on multiple levels and in many ways. Indeed, a central finding appears to be:
high-impact ethics and compliance leaders set more goals, seek more inputs, generate more outputs, and use more rigorous metrics than do their less effective peers…
Putting aside the fact that these high-impact individuals sound a bit annoying (joke), I’m going to focus here on one or two lessons from the report and encourage interested readers to download a copy of the report from here for more detail.
A central concern of the report is the debate over whether the positions of chief ethics and compliance officer and general counsel should be occupied by the same person. As LRN puts it:
Beyond the divergent skill sets and share of mind required, their arguments have turned on the role of the GC in advising on what “can” be done, while the CECO speaks to what “should” be done.
Whilst they clearly have a great deal of sympathy with the view that the CECO and GC roles should be separate that is not what the data in their report suggests: As they say, on this data
It Turns Out That Two Hats Are (for Now) Better Than One.
…two-hatted stalwarts run programs significantly more effective than those of their one-capped colleagues.
…What we see suggests that the greater effectiveness of the GC/CECOs’ programs reflects the nature of the GCs’ interactions and other roles within their organizations.
Interestingly, in continuing to support having separate CECOs reporting to the CEO, they also suggest CECOs need to become more like GCs, “building stature and cultivating key relationships”. And they, “must seek to replicate or improve on the business service paradigm that successful law departments adopted decades ago.”
There is a bit of a nagging doubt in my mind about whether the research is always able to compare like with like. When they say, “dedicated CECOs are considerably more likely to have run into negative results,” for instance I was prompted to wonder whether that is because CECOs have been appointed where ethics and compliance is a bigger problem or where, because they have been appointed, they are more inclined to think – or be willing to acknowledge – that there is a bigger problem. They may have lower PEIs because they are more clear-sighted about the problems. They appear to have larger budgets, which may partly support my hypothesis. Similarly, LRN find CECOs are, “considerably more ambitious and seems much more focused on critical aspects of E&C effectiveness than the GC/CECOs.”
There are also interesting, I would say, counter-intuitive findings which seem a bit less prone to this criticism. In particular, one thing that caught my eye was the finding that, “programs led by GC/CECOs are doing substantially more training, in more, and more effective, ways.” Higher rates of facilitated group figure strongly as a means of improving ethics programme performance. It is also claimed that:
GC/CECOs may be less interested in nuts and bolts, but they are, on average, far more likely to be values-focused…. As we have previously determined, values-based programs outperform rules-based programs by- almost every measure.
An equally resonant finding, probably of relevant to anyone who holds themselves out as, or is expected to be, an ethical leader was the finding that
Whether or not the typical member of the C-Suite often or very often addresses issues of ethics and compliance in staff meetings, operational reviews, and similar settings is more closely associated with the presence of an effective E&C program than any other single behavior or attribute.
It was also rare: only 11% of respondents reported that this happened and, “nearly two-thirds of all respondents [reported that] senior leaders bring up such matters rarely or not at all.” The day to day demonstrable relevance of ethics and compliance seems to be a key here (and middle management commitment in these term may be doubly important). In a similar vein, whether “employees are likely or very likely to consult the code of conduct when faced with a decision or dilemma,” LRN say is predictive of good performance.
The report contains a wealth of data on quite detailed aspects of ethics and compliance programmes: metrics, evaluation, training, culture and the like. Most studies of this kind suffer a bit from a degree of circularity and self-reporting: it’s not always possible to disentangle whether those who think they are doing better really are doing better, but even so it is well worth a read. As well as it’s immediate concerns it got me wondering whether it is time to do something similar with COLPs in law firms. There are a lot of analogues: does law firm’s C-suite take ethics seriously? Is it ethics or compliance that COLPs are about? Is ethics and compliance embedded or bolted on? Do middle managers (who they?) take this sort of thing seriously? How is training delivered? How are values conceived of and promoted?
The Lawyer have done a very interesting survey on lawyer salaries with a very large response (6,000+). The results on apparent gender disparities are particularly interesting. In this context it can be regarded as useful light being shone on the practices of law firms, but in another light it can regarded as part of the ‘judge me by what I earn’ culture which is an (increasingly?) damaging part of the culture of legal practice. I’m not sure an awful lot can or should be done to resist the spread of such information: and after all there are benefits on top of publicity for the gender issue if one sees partners as appropriating more of the associates value than they deserve (I’m agnostic on that: more information may help the market decide though I suppose). It is worth saying also why not add data on class and ethnicity? Perhaps these things are in the fuller survey.
It’s worth thinking too though about the drawbacks. Research in the US has suggested that lawyers who case success in predominantly financial terms are less happy (or more more depressed depending on what emphasis you wish to take), and other research emphasises the negative impact of the financial framing of work on ethics.
As the Lawyers’ partners (Kinsella Legal, recruitment consultants) in the survey note:
As the UK economy continues to grow, today’s lawyers have never been so sought after, driven by the current war for talent.
Let’s hope this is not a war fought purely in terms of salaries, bonuses and profit share. It’s interesting to note that the Lawyer survey seems to record data on some analagous issues to the US concerns. There’s some reporting of the results on stress here. There is also data on satisfaction with pay rises and apparently data on broader career satisfaction and aspirations although disappointingly I could not see this reported. I may have missed it. It would be good to see a thorough analysis of satisfaction and its drivers if that is possible to compare with the US work and to inform debate which is essentially about the quality of management and about career choices.
By all means show us the money but let us also take a harder look at the other things that make work rewarding (or not). Happiness and professionalism depend upon it.
So (h/t Gregg Callus) there is a very interesting story in the Scotsman about potential impending tobacco litigation. Philip Morris wants, we are told, to claim £11bn for the forthcoming requirements that death sticks have to be sold in plain packaging with pictures of cancerous growths on them. I resist the urge to make this a compensation culture, human rights gone mad story because the story appears to be as least partially true. Here are some excerpts from the report:
TOBACCO giant Philip Morris is to launch the biggest corporate compensation case in history against the UK and Scottish Governments over the decision to impose plain packaging on cigarettes….
Legal advice from former Advocate General of Scotland Lord Davidson of Glen Clova and retired judge Lord Hoffman says the policy breaches international law on image rights and the Human Rights Act.
…Papers seen by The Scotsman show that Lords Hoffman and Davidson consider that trademarks are protected under European law and forced removal of them is a “deprivation of property” and breach of Article 1, Protocol 1 of the European Court of Human Rights, and Article 17 of the EU Charter of Fundamental Rights, both of which apply in Scotland and England.
Now this is quite a carefully worded passage intended to convey the impression that their Lordships have advised that the tobacco litigation will succeed, which their advice may not in fact say. The passage after the one that is paraphrased may have a massive great big lawyers BUT in it: “Even were the trademark infringement argument to succeed… [followed by a long list of reasons why Philip Morris and their ilk will fail”.
However that is not what interests me for the present. What interests me for the present is whether Lord Hoffmann should have advised at all (assuming the report is correct). By the marvel that is twitter, I am indebted to the former Court of Appeal judge, Sir Henry Brooke, who pointed towards para. 9.1 of the Guide to Judicial Conduct 2013 (although para. 9.2 may also be relevant):
9.1 The conditions of appointment to judicial office provide that judges accept appointment on the understanding that following the termination of their appointment they will not return to private practice as a barrister or a solicitor and will not provide services, on whatever basis, as an advocate in any court or tribunal in England and Wales or elsewhere, including any international court or tribunal, in return for remuneration of any kind, or offer or provide legal advice to any person. The terms of appointment accept that a former judge may provide services as an independent arbitrator/ mediator and may receive remuneration for lectures, talks or articles.
9.2 Even in retirement a former judge may still be regarded by the general public as a representative of the judiciary and any activity that might tarnish the reputation of the judiciary should be avoided.
On the face of it, there is a potential breach of para. 9.1 if Lord Hoffmann advised in the course of private practice as a barrister. Lord Hoffman appears to still practice as a mediator and arbitrator through Brick Court Chambers. I suppose we could wonder whether his advice was given as a barrister or in some other capacity? He is providing exactly the sort of services 9.1. appears to want to preclude and whether he is formally doing that as a barrister or not is (I think) immaterial really: it’s his status as a former Law Lord which is crucial not whether he is now practising as a barrister or not. Another possibility is that Lord Hoffmann is not, or does not feel, bound by the Guide (he retired from the highest court in 2009, I believe and I do know what rules (if these are indeed rules) was in place then. May be that provides a somewhat inglorious excuse. Or perhaps he advised big tobacco pro bono in his capacity as a private citizen, rather than (and here I am merely being mischievous) on a no win no fee basis.
I’ll leave it to others to debate the application of para. 9.2. but I do want to say this. There is a way of writing an opinion so that it gives clients as much comfort as possible on their case. Legal aid opinions were one such area where, many years ago, I was told by a really rather senior barristers how the language could be finessed to get a case with very (very) modest prospects of success through a (then much looser) legal aid merits test. These hired gun opinions are even more dangerous when they are to be used for PR purposes. Now of course, as I have noted, we do not have all of the opinion given here (if indeed an opinion was in fact given or given in writing) and we have even less reason, for now at least, to think any of the lawyers involved knew the opinion would be used for publicity purposes (something the Bar recently permitted). Any opinion may have been selectively or inaccurately reported. Whether that is true or not is important but in some ways irrelevant: the potential for abuse is significant and it illustrates the perils rather nicely of the retired, senior judiciary being willing to take up an advisory role in any capacity that they relinquished on joining the bench, particularly if they are to be wheeled out by private interests in matters of such public controversy. Perhaps there should be a rule against it, and perhaps we should call it Rule 9.1.
There is some more background to the debate here. The view of the Judicial Council would have been given when Hoffmann was still on the bench. http://royaldutchshellplc.com/2007/11/05/legal-week-straw-will-not-let-judges-return-to-private-practice-see-footnote-relating-to-mr-justice-laddie-judge-for-the-shelldonovan-trial/
h/t Jeremy Hopkins to pointing to this which is either a previous similar opinion or the opinion referred to http://ift.tt/1Gv8ghQ
Following up on yesterday’s post where I got to trot out a minor interest in readability scores, I saw this on twitter (courtesy of Prof Ed Cape) about whether rights to remain silent are understood. You can read it here on the Open Society Foundation’s website. Here’s an excerpt, but the whole thing is not long and well worth a read.
A study in the United States evaluating police officers’ recitations of arrest rights revealed that the level of comprehension required to understand the rights varied from a 4th grade reading level to a college reading level. However, according to the National Adult Literacy Survey, 70% of inmates have the equivalent of a 6th grade reading level or lower. In other words, the recitation of rights upon arrest may be beyond the comprehension of the average arrestee.
In Hong Kong, a survey of customs officers who combat crime at the border revealed that 55% did not understand the right to remain silent as a protection against self-incrimination. This is a problem, because an officer who does not fully understand the right to remain silent cannot adequately communicate that right to arrestees.
Another study in the United States published by American Psychologistrevealed that 31% of defendants believed that remaining silent in the face of police questioning could be used as incriminating evidence at trial. This misunderstanding can compel individuals to offer information, including incriminating information, for fear that remaining silent will make them seem more culpable, thus completely defeating the purpose of the right to remain silent.
The current method of reciting to arrestees their right to remain silent does not take into account the varying levels of comprehension that different people may have. People who are uneducated, mentally-ill, or intellectually disabled are more likely to come into contact with the justice system; many people are arrested when they are under the influence of drugs or alcohol, all factors which inhibit their ability to understand the rights read by police.
In Canada, the “Operating Mind Test” is used to determine whether arrestees have sufficient cognitive capacity to understand their rights. However, this test looks at whether the warnings provided are comprehensible in theory, rather than whether the arrestee actually understood them. In the 1994 case ofWhittle, the Candian Supreme Court determined that the warnings provided were comprehensible even though the defendant was suffering from schizophrenia and auditory hallucinations. This standard does not take into account the physiological effects of a mental disorder that may impede the ability to understand one’s rights. The Whittle decision has made it more likely that people who do not understand their rights will be found guilty.
The recent Court of Appeal decision in Proctor v Raleys  EWCA Civ 400 raises the interesting question as to whether commoditisation of legal services, which may lead to cheaper more accessible justice for consumers, should be held to the same professional standards as lawyers providing services in a more traditional manner. Put like that, the answer seems to be a plain yes, though I am tempted to complicate the case by suggesting that, as long as consumers understand that ‘commoditised’ services are a riskier proposition (if indeed they are a riskier proposition) , then a market for legal services might very sensibly allow a lower standard of service to be provided. There are signs in the research on wills and online divorce that consumers have something of a grasp of this, but I would not say it was a good grasp (yet).
In this case a personal injury claimant had a relatively straightforward claim for compensation which he pursued with a firm (Raley’s) who tended to use questionnaires and standard form letters to communicate with their clients. These letters were long and gave the Court of Appeal (Tomlinson LJ gave the judgment) concerns about being misleading in that they failed to describe ‘service claims’ in a way that was clear.
For whatever reason, the claimant did not make a claim for ‘services’ (the cost of having to get someone to do his own gardening etc.) when it seems he would likely have succeeded. There were a number of warning signs (especially in his medical evidence) that he might be able to make such a claim but because the claimant did not tick the relevant box saying he wanted to make a services claim Raley’s assumed he did not want to make that claim. Subsequently, having accepted an offer settling the claim without making a service claim (and having definitely turned down another element of the claim he might have made which would have delayed his settelemnt) he decided to sue Raley’s for negligence.
The case provides something of a lesson in how the evolution of legal case management systems needs to be adaptive to the humans it works with. Raley’s clearly did try and adapt (they seem to have picked up the potential claim but were not able to say they spoke to the claimant about the point either in person or on the phone). They could point to three long standard letters where the potential to make the claim was explained to the claimant but that was not enough.
It is worth observing that not only were these letters pretty long, but using the Flesch–Kincaid readability score (which I did on the third letter) the letter did not fall into the category easily readable by a 13-15 year old using this test. According to the Wikipedia page on this test, insurance policies in the US are required to be written to something like this standard. Also the letter got a similar readability score to Moby Dick (although it was of course shorter). I don’t know about you, dear reader, but I’ve put Moby Dick down at Chapter One more than once.
Because the judge at first instance did not accept that the letters were misleading, it was submitted by Counsel for Raleys, “that it was not open to the judge to conclude that the solicitors should have done more to ensure that Mr Procter [the claimant] actually understood the advice he was receiving.”
It is worth observing also that (according to the judge at first instance):
…The Claimant had stated in evidence that his education was limited. Even if the Defendants were not aware of this they could have assumed that most miners were not highly educated. …it was clear from the documents …that the Defendants knew there were risks in accepting information from the clients at face value. …There is some indication from the Defendants records that they were regularly experiencing clients who had not notified them of a potential service initially, but changing their minds at a later stage on receipt of further information.
That evidence suggested the firm had changed its procedures to speak to clients in person or on the telephone when dealing with offers because, “more clients made claims for services if they actually spoke to the lawyer directly about the issue either in person or on the telephone.” Given a series of warning signs that the client might have such a claim, the guts of Tomlinson LJ ‘s judgment is as follows:
In my judgment the situation here cried out for a short discussion with the client, preferably face to face, but if necessary over the telephone, in order to ensure that the client understood the circumstances in which a claim for [services] could be made. … [As calls were had with the client this could easily have been discussed]
I would add that, on the assumption that the client was responsible for payment of the solicitors’ fees, taking up the point in the course of these telephone conversations would have been likely to increase the cost to the client by only a trifling amount, if anything. At the hearing I was under the impression that Mr Procter had himself been responsible for Raleys’ fixed fees, and that Raleys would receive a fee in respect of advice concerning a services claim only in the event of a successful claim under that head. Closer perusal of the documents subsequent to the hearing leads me to wonder whether Mr Procter in fact had any potential liability for Raleys’ fees, as the documents seem to suggest that the relevant fees were paid to Raleys by IRISC. For the avoidance of doubt however I reject the notion that a solicitor should feel inhibited from ensuring that his client has understood advice given to him by the consideration that so ensuring might generate a further fee payable by the client.
Whilst it is clear that Tomlinson LJ is suggesting that the solicitors cannot resist the idea that a client cannot be advised in person (or on the telephone) on an economic basis, and that they must so advise the client, in person or on the phone where the facts demand it, he is also doing so in circumstances where he can see that Raleys’ could readily adapt. It seems to me the judges may have been influenced also by the uncertainty over who had conduct of the file, although they do not say so explicitly. The judges also were plainly influenced by the series of warning signs that the Claimant probably did have a services claim and had not explicitly declined the opportunity to pursue it. Tomlinson LJ returns to the commoditisation point:
…Mr Pooles drew to our attention the difficulties posed for solicitors in modern conditions, where financial constraints may require them to “commoditise” their advice to potential claimants. …The circumstances in which a claim for services could be made were not complex but as I have already pointed out not entirely straightforward. These letters in my view signally failed to give a clear exposition [on the services claim] …Furthermore, whatever may be the practical and economic constraints in conducting face to face meetings or telephone discussions with clients in claims handling of this nature, it is apparent that in this case there were at least two opportunities to give, without significant additional cost, a straightforward exposition …It is to the solicitors’ credit that their system did generate internal reference to these very matters. To impose liability for the failure to follow up the issues flagged in this way does not, to my mind, involve the imposition of an unrealistic standard. The solicitors were dealing with a client who could fairly be regarded as unsophisticated in the relevant field. The written advice given to him was unclear, and there were clear indications that it may not have been understood. It is not asking much of a solicitor in such circumstances to make sure that his client understands the opportunity apparently being passed up.
To my mind, this passage is important. What is being shown here is a system that is not, for a certain class of clients, effective; that Raley’s knew they had a problem; and, that they failed to deal with it adequately. An attempt to pass the system’s inadequacy back onto the client failed and responsibility remained with the professional service provider. I think that is a good thing. Of course, there is a potential for injustice if the claimant had understood he was turning down a service claim, but that is a risk which Raley’s can adopt to – apparently relatively cheaply- by having a better system. The interesting question will be whether other cases provide a better contrast between a rough and ready system which it would genuinely not be economic to run the other way. Tomlinson’s judgment seems to me to leave that question open, whilst leaning towards the view that lawyers’ will not easily push responability for errors back onto clients. Of course, such claims will not generally be brought, as rough and ready systems are likely to apply to minor cases, but it’s not impossible.
One further point is worth noting. Lawyers are not always notoriously brilliant communicators with lay clients. Traditional legal service providers might get an easier ride if they have had a meeting with a client and given them a muddled explanation of a services claim which a client then fails to pursue. In such a case, the commoditisers might be subject to higher standards: the judge is forcing on them something of a requirement to develop systems that clients genuinely understand. Whilst I do not think the courts should close their minds to the argument that rougher justice may be necessary to make some types of case economic, they probably should resist for now attempts to shift the blame for negligence claims onto clients not filling in convoluted forms properly.
Gordon Exall has written an interesting piece on his excellent blog on the commoditisation argument which I think is important context.He says this:
The “economics” of the situation makes for interesting reading.
According to the Mellor Hargreave’s Blog
“The fee income of Raleys as a result of handling these claims under the compensation scheme, which also included a scheme for respiratory disease illness, rose between 1999 and 2003 from £2.5 million to £15.7 million and £11.8 million for 2004. Mr Firth and Mr Barber the two senior equity partners took respectively as their share of the profit for the years 2003, 2004 and 2005 a total of £9.9 million and £7.2 million.”
…Far be it for me to ponder on the economics of running a practice. However it appears likely that, for a tiny smidgeon, of that amount it would have been possible to hire at least one (and possibly several) fully qualified lawyers whose sole task was to explain settlements and offers personally to clients and ensure that the client understood what they could claim for. If I have misunderstood this I am sure that there is an accountant or solicitor out there who can put me right.
I too perused the Mellor Hargreaves blog and it says this:
Raleys handled in excess of 12,000 claims under the scheme. It is understood that in the region of 63% of the miners qualified to claim for services, yet this defendant only claimed for 20% of those. Notwithstanding the fact they submitted to the court this claim would not have been successful, their own statistics suggest that 97.2% of those claims submitted, were in fact successful.
If they are right, and I must emphasise it is an if, then the question raised is whether Raley’s undersettled a raft of cases and whether that undersettlement was caused by the design of their system?
I find the psychology of professional ethics endlessly fascinating. Take this piece by Elaine Doyle, Jane Frecknall Hughes and Barbara Summers (2013) An Empirical Analysis of the Ethical Reasoning of Tax Practitioners, J Bus Ethics (2013) 114:325–339 DOI 10.1007/s10551-012-1347-x (open access here), which I thank Iain Campbell for mentioning to me. The researchers used Rest’s original Defining Issues Test (and a tax specific version) to compare the moral reasoning of Irish tax practitioners and a control group of non-tax specialists.
They find that:
(i) tax practitioners generally reason at lower levels in tax contexts than in social scenarios (i.e. they can be moral, just not in tax situations);
(ii) that the professions do not appear to attract people who reason at lower levels (i.e. tax does not, on the evidence here, attract bad apples); and
(iii) that practitioners appear to be affected by training/socialization in their professional context (in particular tax practitioners in private practice demonstrate lower levels of moral reasoning than practitioners working for the Irish revenue service).
The research is based on Rest’s well known six stages of moral reasoning:
1. The morality of obedience: do what you are told
2. The morality of instrumental egoism and simple exchange: let’s make a deal
3. The morality of interpersonal concordance: be considerate, nice and kind: you’ll make friends
4. The morality of law and duty to the social order: everyone in society is obligated to and protected by the law
5. The morality of consensus-building procedures: you are obligated by the arrangements that are agreed to by due process procedures
6. The morality of non-arbitrary social cooperation: morality is defined by how rational and impartial people would ideally organize cooperation.
The higher up the scale, the higher the level of moral reasoning that is applied by the subject of the test. On a quick read of the paper the authors seem particularly concerned with accountants (who we are told to expect may already be prone to, “a lower level of moral reasoning than would be expected, given their age and education” based on other research). Similarly, “auditors and accounting students… [appear to] apply a more principled level of reasoning to resolve social dilemmas than to resolve moral dilemmas in accounting or auditing.” However, their study is on tax practitioners and this its seems may include lawyers, accountants and possibly others.
…The research instrument was administered to 384 tax practitioners and 306 non-specialists in Ireland in 2009 using a combination of random, convenience, and snowball sampling techniques.
What did they find?
The fact that tax practitioners do not reason significantly differently from non-specialists in the social context suggests that individuals whose reasoning is less principled than the norm (as measured by the non-specialist control group) are not self-selecting into the tax profession. …Once the context changed to tax, however, differences in moral reasoning were evident, with tax practitioners utilizing significantly lower level moral reasoning than non-specialists who remained consistent in their reasoning across both contexts. This difference was substantial in size, with the level of principled moral reasoning being 34 % higher in non-specialists.
An interesting question is whether we (or they) should care. Are tax practitioners more prone to a a kind of lazy positivism: a client friendly convenient roolz is roolz approach may fit with the architecture of tax law:
This may be driven by the weight tax practitioners give to legal rules in the tax context, of which non-specialists are unaware, but further analysis is needed before any such conclusions could be reached.
The interesting thing is that Revenue practitioners, who are operating in the same legal architecture after all, are rather different:
… Revenue practitioners show a pattern of reasoning that is very similar to non-specialists and their reasoning is not at a significantly different level in either the social or tax contexts. On the basis that Revenue practitioners fulfill a public service role with an emphasis on collecting the maximum tax revenue in accordance with legislation, in order to fund government spending and support society as a whole, this finding is, perhaps, not surprising. The fact that Revenue practitioners reason differently from private sector practitioners, however, indicates that tax knowledge and experience are not what is driving the difference between reasoning in the social and tax contexts for practitioners, as Revenue practitioners also possess tax knowledge and years of experience working in tax. Equally, moving from a social context to a work-related context is not driving the difference, as tax is also the working domain for Revenue practitioners. The results suggest that the differences observed in the reasoning of tax practitioners in the tax domain arise only in a private practice environment. While the results do not identify the reasons for the differences in moral reasoning in a private tax practice domain, the differences found may be due to a socialization effect in private sector tax practice.
A more pithy way of putting this might be that private practitioners in tax become morally inhibited because it pays or because their ethical rules demand that they prioritise the client’s interests over others (that’s not the case in this country but it may be the case in Ireland). The fascinating question posed by the study (but not answered) is what if anything might be done to redress the problem (if indeed, it is a problem). To boil it down unfairly: do tax practitioners need training to be more principled or should they be more tightly proscribed by rules?
Finally, if one likes a joke at accountants and tax practitioners’ expense (we’re only human after all), then there’s this little nugget on which I will conclude. You’ll remember accountants generally scored poorly on moral reasoning in work contexts, well tax practitioners it seems are worse:
……the scores from this study are most comparable with those of average senior high students and are well below the level of adults in general and college students. These scores are also much lower than the average P scores of accountants found in other studies …
If the study is right, it seems its not the law, but the cultures and rules of private practice that might be dumbing down tax practitioners of Ireland. Couldn’t be happening here, could it?