Stephen Warne on professional negligence, regulation and discipline around the world

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SCNSW’s Nine Commandments of Interlocutory Applications in a Civil Procedure Act world

April 21st, 2014 · No Comments

In Tugrul v Tarrants Financial Consultants Pty Limited [No 5] [2014] NSWSC 437, Kunc J, deciding the fifth interlocutory matter in a proceeding, gave a warning to the profession about the need to try hard to resolve interlocutory skirmishes including picking up the telephone.  It was a little reminiscent of the Victorian Court of Appeal’s fulmination in Yara Australia Pty Ltd v Oswal [2013] VSCA 337.  An applicant for security for costs against individual opponents was ordered to pay the costs of the unsuccessful application forthwith and on an indemnity basis. His Honour’s Nine Commandments were:

  1. How do these dicta and the requirements of ss 56 and 59 of the CP Act translate into practice when interlocutory issues arise, including such matters as amendments, strike outs, discovery and security for costs? Assuming compliance by the practitioner with the relevant professional conduct rules, nine points may be made by way of general, practical guidance. Nevertheless, the variety of circumstances confronted in practice means that what follows cannot be exhaustive.
  1. First, it must be emphasised that s 56 of the CP Act and its related provisions are not just pious exhortations to be acknowledged and then ignored. They have real consequences for the clients and lawyers in this Court and are to be applied rigorously in the conduct of all litigation, great or small.
  1. Second, solicitors and barristers are members of a profession. It is of the essence of a profession that relations between its members are characterised by civility, trust and mutual respect. The Court sees far too much correspondence between lawyers that bears none of those qualities. They must never be abandoned at the behest of clients or in the misguided belief that that is what successful representation of a client requires.

[Read more →]

→ No CommentsMore articles on: Civil Procedure Act 2010 (Vic) · Party party costs

VSCA orders solicitor director of incorporated legal practice to pay costs personally because veil ‘gossamer thin’

April 15th, 2014 · No Comments

Lillas and Loel Lawyers Pty Ltd v Celona [2014] VSCA 70 is just a little decision about the costs of an appeal, but it seems to me to be interesting indeed. That is because the Court was prepared to look through the ‘gossamer thin’ veil between James Loel and Lillas and Loel Lawyers Pty Ltd, a $2 company and — presumably — an incorporated legal practice, of which he was the sole director and, through another company, the owner.  The Court ordered the director to pay personally the costs order made in favour of the firm’s former client in the appeal.  The firm’s website suggests that the firm today is no one-man band, listing two employee solicitors and one law graduate. [Read more →]

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The Lawchestra

March 20th, 2014 · No Comments

Indulge me while I go off message for a second.  Mind you, I am going to tell you about a band that is decidedly heavy with costs lawyers, since Liz Harris is on harp and I’m playing flute, so in my own mind I have a weak but arguable case for relevance.  This Saturday sees the debut performance of the Melbourne Lawyers’ Orchestra, aka the Lawchestra, following in the steps of the several excellent doctors’ orchestras in Victoria (and even an engineers’ orchestra) and lawyers’ orchestras in London, and America. There are a handful of barristers, many solicitors, and some law students, brought together with patience and brill all at once by the rather wonderful conductor Robert Dora. We’ve got it all, mate: harp, bass drum, cor anglais, horn francais, piccolo, bass trombones, and they all get a thrashing. You should come, because it’s going to be a cracker, and also because you might very well get to hear me play in a general pause: book here. [Read more →]

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Section 18(d) of the Civil Procedure Act 2010 (Vic)

March 13th, 2014 · No Comments

Section 18(d) of the Civil Procedure Act 2010 requires litigants and their lawyers alike not to make claims in civil proceedings, or defend such claims, unless ‘on the factual and legal material available to [them] at the time of making the claims’ the claim or defence has ‘a proper basis’.  A court may make any order it considers appropriate in the interests of justice if satisfied that a person has breached s. 18(d): s. 29 and may take any contravention into account in exercising any of its powers, including specifically in relation to costs: s. 28.

As Derham AsJ said in Matthews v SPI Electricity Pty Ltd (No 2) (below):
‘The overarching obligations [including that in s. 18(d)]:

(a)          apply to any legal practitioner or any law practice acting for or on behalf of a party: Civil Procedure Act10(1)(b), (c);

(b)          apply in respect of the conduct of any aspect of a civil proceeding, including, but not limited to any interlocutory application or interlocutory proceeding: Civil Procedure Act11(a);

(c)          do not override any duty or obligation of a legal practitioner to a client to the extent that those duties and obligations and the overarching obligations can operate consistently: Civil Procedure Act13(1); and

(d)          must be complied with by a legal practitioner or a law practice engaged by, or on behalf of, a client in connection with a civil proceeding despite any obligation the legal practitioner or the law practice has to act in accordance with the instructions or wishes of the client: Civil Procedure Act13(2).

In this very workmanlike post, I simply summarise the not particularly illuminating jurisprudence to have emerged around this new provision so far. [Read more →]

→ No CommentsMore articles on: Alleging fraud & misconduct · Civil Procedure Act 2010 (Vic) · Civil Procedure Acts · duty to court · litigation ethics

More Corby saga lawyer shenanigans

March 6th, 2014 · No Comments

I have been saying for a while now that Schapelle Corby’s saga is a case study in the importance of choosing your legal team wisely. Moss v Eagleston [2014] NSWSC 6 provides further analysis of the performance of a lawyer selected by another of the players in the saga. That selection was a selection made by a man without the resources to pay for orthodox representation and who obtained rather unorthodox representation.

The decision examines the scope of a duty of care, including by reference to an argument that pro bono work requires a lower duty of care, and the appropriate response to late assertions of the defence of advocates’ immunity, and demonstrates how the courts will deal with a claim of loss suffered as a result of a failure to provide promised legal representation at a trial.

William Moss, also known as William Miller, is a former criminal.  You can see him and hear him in this video. He says that he was supposed to pick up a package in return for a substantial sum and that shortly after Schapelle Corby’s arrest, he was told not to bother because it had ended up in Bali.  He believed that these facts strongly support Ms Corby’s protestations of innocence.  The Daily Telegraph published the claims.  He says they ratted on a promise to pay him $250,000, or at least that they conned him into divulging his claims to them in the expectation of receiving that sum.  They then published articles which were defamatory of him with the imputations that he was a small time shyster lying to get cash. So he approached lawyers.  Quite a few of them.  Finally he found one who would act for him: the firm Reimer William Winterson of Penrith.  They sent a letter of demand for damages for breach of an oral agreement.  The publishers denied the agreement.  The firm ceased to act. [Read more →]

→ No CommentsMore articles on: Advocates' Immunity · Barristers' immunity · Causation · Negligence

Application to set aside costs agreements for disclosure defaults fails

March 3rd, 2014 · No Comments

A decision of the Supreme Court of Queensland has made clear what ought to be more obvious than it appears to be, namely that costs disclosure defaults will not result in the setting aside of a costs agreement in the absence of evidence that the non-disclosures had some effect on the client’s decision to enter into the costs agreement on the terms in fact adopted between the solicitor and client. [Read more →]

→ No CommentsMore articles on: Costs agreements · costs disclosure defaults · Professional fees and disbursements · setting aside costs agreements

Rules relating to unjustified allegations of fraud, etc.

March 2nd, 2014 · No Comments

This post, based on research by Zoe Dealehr, collects together the various Bar conduct rules around Australia relating to the requirement of a proper factual foundation for making allegations of criminality, fraud and other serious misconduct as well as for allegations in litigation more generally.

First of all, the relevant Victorian rules are set out.  They are more detailed than the other states’ and territories’ rules.  Apart from Tasmania’s, the rest of Australia’s conduct rules for barristers are almost uniform and are similar to, but different from Victoria’s.

Tasmania appears to have no conduct rules on the subject, but it is said that it is soon to adopt the national rules which are the foundation for the non-Victorian rules.

[Read more →]

→ No CommentsMore articles on: Alleging fraud & misconduct · duty to court · Ethics · litigation ethics

The costs consequences of failing to prove a responsibly advanced allegation of fraud

February 26th, 2014 · No Comments

The irresponsible advancement in litigation of allegations of fraud undoubtedly triggers the jurisdiction to award indemnity costs and even to make personal costs orders: White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169, approved on appeal at (1999) 87 FCR 134, discussed in this post.

But what about responsibly advanced, but ultimately unsuccessful, allegations of fraud? In a leading case, Woodward J said:

‘It is sometimes said that [special] costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court’s discretion: for example, the allegations of fraud have been made  knowing them to be false, or they have been irrelevant to the issues between the parties’.[1]

That statement has been followed subsequently and, in my view, very likely represents the law in Australia.[2]

Nevertheless, it is possible to find statements made, apparently without consideration of Woodward J’s observation, in cases[3] and commentaries which appear to say that the mere failure of a fraud allegation justifies departure from the usual rules of thumb in to costs. Professor Gino Dal Pont’s outstanding Law of Costs speaks of ‘the “rule” that a party alleging but failing to prove fraud is deprived of costs even if successful in the action generally’ without citing Australian authority, before suggesting that it is too broadly formulated.[4]

Conduct rules often require lawyers in Australia to make allegations of criminality, fraud and other serious misconduct only after having warned their clients of the consequences of doing so and obtained specific instructions to go ahead and make the allegations (e.g. Victorian Bar Conduct Rules, r. 34).  Quite what such an advice ought to contain is, I suspect, not immediately apparent to most lawyers.  Conceivably, uncertainty about the content of this obligation, and fear about costs consequences even in the absence of misconduct on the part of those responsibly advancing fraud allegations, are matters which contribute to allegations of fraud being made so rarely.  It would be helpful if the law in relation to the consequences of failing in a responsibly advanced serious allegation were clarified and more widely disseminated throughout the profession. [Read more →]

→ No CommentsMore articles on: Alleging fraud & misconduct · duty to court · Ethics · litigation ethics · Vic Solis' Conduct Rules

Clyne v NSW Bar Association: the leading case on unfounded allegations

February 11th, 2014 · No Comments

Clyne v New South Wales Bar Association (1960) 104 CLR 186; [1960] HCA 40 is a unanimous decision of the Dixon Court confirming the striking off of a Sydney barrister, Peter Clyne, for making unfounded and serious allegations on behalf of a husband against the wife’s solicitor in matrimonial litigation for the admitted purpose of getting the wife’s solicitor out of the case.  Those allegations were in fact made in a private prosecution by the husband of the wife’s solicitor for maintenance. Reading the decision, one might think that striking off the rolls was a relatively harsh penalty by today’s standards for the conduct recorded, especially since his client succeeded at committal in having the wife’s solicitor presented for trial.  And also if one believes Mr Clyne’s autobiography where he asserted:

‘Particulars given by the New South Wales Bar Association made it quite clear that it was not part of the charge to say that my advice to prosecute was wrong, or improper.  Indeed, as I have mentioned before, the advice to prosecute Mann was given in writing, by the eminent and respected Sydney QC, Mr Newton, who later became (and still is) a judge of the New South Wales District Court; and no one has ever criticized Mr Newton for his advice.’

But Mr Clyne had done it before and been sternly warned (see CLR 202) and was unrepentant to the moment he was struck off. Further, he was absolutely one out of the box (he will be the subject of a further blog post) and was no doubt regarded as an excrescence on the legal system to be excised at almost any cost.  He went on to irritate the authorities as a professional tax evader and unashamed advocate of tax evasion, writing many books on the subject and others (e.g. Adventures in Tax Avoidance, How Not to Pay Any Taxes, Guilty But Insane) while living a decadent lifestyle which hopped, first class, between hotels in Sydney and his native Vienna.  Like George Herscu, one of the villains in White Industries v Flower & Hart, Clyne spent time in jail, and only avoided spending more time by fleeing America without a passport while on appeal bail.  He seems to have been intelligent and to have had enough charm to be married to a Welsh entomologist who also wrote many rather different books (e.g. Silkworms, All About Ants, and Plants of Prey).  But his autobiography (Outlaw Among Lawyers; the Peter Clyne Story, Cassell Australia, 1981) reveals a thoroughly dishonest if colourful character with very little if any regard for the law. [Read more →]

→ No CommentsMore articles on: "disgraceful and dishonourable" · Abuse of process · Alleging fraud & misconduct · Discipline · duty to court · Ethics · Evidence · Legal writing · litigation ethics · Misconduct · prosecutors' duties · Striking off

National Costs Lawyers’ Conference: you’re invited

February 10th, 2014 · No Comments

I’m speaking on Friday at the National Costs Lawyers Conference in Melbourne.  My topic is the civil and disciplinary consequences of making serious allegations without an adequate factual foundation.  Obviously, some of those consequences include costs orders.  The Civil Procedure Act 2010 (Vic) takes things further than the obligations imposed on lawyers previously and provides a smorgasbord of hitherto unexplored remedial powers to trial judges and the Costs Court alike.  The new solicitors’ conduct rules which are on their way to Victoria will extend solicitors’ obligations too in small but important ways. Think ‘allegations’ rather than ‘serious allegations’, in fact these days.

$450 gets you 6 CPD points across four categories including (thanks to me) ethics, some lunch and some wine. But you wouldn’t pay all that money just to hear me.  You’d pay it to hear the Supreme Court’s Justice Croft give the keynote address, Dr Sue McNicol SC talk about legal professional privilege in taxations (I’m so waiting to have her authoritatively sort out this hoary chestnut for me), Federal Court Registrars Pringle and Burns on party-party taxations in the Federal Court, a psychologist on professional wellbeing and a panel including Cate Dealehr and two eminent interstate costs lawyers updating delegates on recent cases on costs disclosure and costs agreements.

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