Consequential Responsibility for Client Wrongs: Lehman Brothers and the Regulation of the Legal Profession

36 Pages Posted: 4 Jan 2013

See all articles by David Kershaw

David Kershaw

London School of Economics - Law Department

Richard Moorhead

Centre for Ethics and Law, Faculty of Laws, UCL London

Multiple version iconThere are 2 versions of this paper

Date Written: January 2013

Abstract

Should transactional lawyers bear responsibility when their competent actions facilitate unlawful activity by their client? Or is a lawyer's only concern to act in the client's interest by providing her with the advice and support she seeks? The high profile failure of Lehman Brothers provides a unique opportunity to explore these questions in the context of the provision of a legal opinion by a magic circle law firm. A legal opinion which, although as a matter of law was accurate, was a necessary precursor to an accounting treatment by Lehman Brothers which was described by the Lehman's Bankruptcy Examiner as ‘balance sheet manipulation’. The article argues that the law's existing understanding of when consequential responsibility should be imposed on those who assist another's wrongdoing provides a theory and a tool‐kit whose application can be justifiably extended to the professional regulation of transactional lawyers.

Suggested Citation

Kershaw, David and Moorhead, Richard Lewis, Consequential Responsibility for Client Wrongs: Lehman Brothers and the Regulation of the Legal Profession (January 2013). The Modern Law Review, Vol. 76, Issue 1, pp. 26-61, 2013. Available at SSRN: https://ssrn.com/abstract=2196306 or http://dx.doi.org/10.1111/1468-2230.12001

David Kershaw

London School of Economics - Law Department ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

Richard Lewis Moorhead

Centre for Ethics and Law, Faculty of Laws, UCL London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Downloads
4
Abstract Views
1,072
PlumX Metrics