The Solicitors Regulation Authority (SRA) is attempting to clear up confusion over the reporting of misconduct, with a wide-ranging consultation aimed at clarifying what – and when – law firms are required to report.

The consultation follows what the SRA calls "widespread confusion" among firms over pinpointing exactly when they are required to report a potential breach – whether in its earliest stages, or only after firms have determined that regulatory misconduct has occurred.

The consultation states: "In recent discussions with firms and individuals around the use of non-disclosure agreements (NDAs), it has become clear that understanding of when their duty to report a potential breach is triggered can differ.

"We want to make sure there is greater clarity about this issue, so all firms better understand their regulatory obligations over what, and when, they should report."

"The purpose of the consultation is to bring clarity over what the regulations are," said SRA executive director Crispin Passmore, who denied the move was solely prompted by the recent spate of sexual misconduct allegations at major law firms.

"There has been some debate around this for a while – and it's not just been around the sexual misconduct/NDA issue," Passmore said. "There was widespread confusion about what the [reporting] obligation was. The core objective here is to come to a set of drafting [of rules and guidance] that we're comfortable with."

Recent months have seen a raft of major law firms thrust into the headlines following allegations of sexual misconduct. The SRA has been looking into Baker McKenzie's handling of a historic sexual harassment allegation involving a senior partner, while Quinn Emanuel Urquhart & Sullivan referred itself to the regulator in response to allegations of inappropriate behaviour by now-dismissed City litigation partner Mark Hastings.

Earlier this year, the SRA warned law firms against using NDAs to prevent the reporting of professional misconduct within their own businesses, while the Equality and Human Rights Commission told the magic circle firms it could take legal action if they fail to take appropriate action to prevent and respond to sexual harassment in the workplace.

Nevertheless, SRA chief executive Paul Philip echoed Passmore's point: "The NDA stuff was never the driver for the consultation," he said, emphasising the 12,000 complaints the SRA receives annually. "There is a mammoth unseen. Of the 12,000 complaints received a year – a figure which has remained roughly stable – we take action on just a few hundred.

"The consultation is not here to reduce the number of complaints, but to clarify when it is law firms should be reporting to us. Some law firms think it is only when misconduct has occurred. But it's our job to decide misconduct, not firms. We've got powers and information they haven't, be that to investigate or to retrieve information."

On the question of whether the bigger issue is one of overreporting by firms rather than underreporting, Philip said it is likely that certain issues remain underreported. "The issue here is when [a breach] should be reported – and that's why we're putting out this discussion document."

As to what the SRA plans to do following the consultation, Passmore said the regulator was aiming to refine its code, "so that the wording is clearer". Philip added: "The goal here is to develop a more mature relationship with law firms – mature in terms of protecting the public and also the interests of firms. We want to highlight to firms that they should recognise their obligations, and that if they have a concern they can raise it with us."

This consultation is open from today (2 August) until 27 September.