Ethics in Law and Business

Jenna Doucet (2009).

Ethics in Law and Business

The subject of ethics is an important topic in the legal system, one that highlights duty and obligation, and one that comes with consequences in the event of non-compliance. These days businesses are making big headlines for subjecting themselves to unethical behaviour. The regulations, standards and consequences surrounding legal practice and fair representation differ from those that surround businesses. When it comes to business and law, aspiring for a more just system requires individuals to understand the business client’s and the lawyer’s duties as well as the ramifications of both. As stated by Yates, Bereznicki-Korol and Clarke (2008) the issue with ethics is that they are not always governed by law, but often by our own convictions and personal values. Simply stated “ When a person breaks the law, he has also acted unethically. However, if a person acts unethically, he may not have broken the law” (p.14). How then can one expect individuals to display ethical behavior in situations that offer no repercussions to the unethical act? A compelling paper written by McGraw (2004) offers some insight into the psychology behind man’s conflict with ethics. McGraw’s (2004) paper highlights Thomas Hobbes’ social contract theory of ethics, which states that individuals are motivated by self-preservation and self-interest. Hobbes theory proposes that in the absence of societal rules and consequences, man would behave in a fashion that served his own best interest and not necessarily act ethically. Hobbes attributes the rules of society and government to “ individuals’ self-interest and fear” (p.236). In order for individuals to survive and attain their desires, they must co-operate with one another, this is achieved by way of social contract. McGraw writes that “ because individuals cannot trust each other to keep their promises a powerful government is necessary in order to enforce the social contract” (p.236).

Following Hobbs logic, the reasons for which a lawyer should practice good ethics are simple. Unethical behaviour can lead to the loss of credibility among clients and more importantly disbarment. It is in the lawyer’s best interest to follow their professional code of ethics. One of the complexities surrounding a lawyer’s duty is that their professional obligations may pose a conflict with their personal duties in fulfilling their social contract with society at large. Protecting the client’s best interests, no matter how unethical the client, is the lawyer’s responsibility. Furthermore, a lawyer’s non-compliance with the standards of the profession are not taken lightly. In Canada, the Canadian Bar Association, the Minister of Justice and Attorney General are responsible for ensuring that lawyers are in compliance with the ethics and responsibilities of the profession. When probable cause that a lawyer has committed a criminal offense or acted unethically, the lawyer is subject to a complaint resolution procedure and upon investigation can be given penalties ranging from suspension to disbarment (Yates, Bereznicki-Korol and Clarke, 2008).
One of the main differences between the lawyer’s duty of ethics and the business client’s is that the client as the face of a corporation has a moral duty to act ethically in order to protect the interest of society at large. Again, it is in the businesses best interest to uphold a positive public image, especially in an increasingly competitive industry. Business like law, is highly regulated by a number of different regulating bodies. The consequences for unethical behaviour in business are also increasing in severity as more and more cases of unethical behaviours are being publicized and scrutinized. The consequences of unethical behaviour in business has a greater number of negative outcome ranging from a loss in customer support, decline in sales and revenue, bankruptcy, forced resignations, loss of employment, large fines and even jail.

In conclusion, ethics play a large role in law and business. As long as ethics and are regulated and valued by society, both lawyers and businesses will be motivated to follow good ethical behaviour- if not by moral choice at least by Hobbes’ self-preservation and social contract theory.


References
Yates, A., Bereznicki-Korol, T. & Clarke, T. (2008). Business law in Canada (8th ed). Canada: Pearson Education Canada.

McGraw, D. (2004). A social contract theory critique of professional codes of conduct. Info, Comm & Ethics in Society (2), 235-243. Retrieved on December 18th 2009 from Ebsco database.