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

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Does a subrogated claim give rise to a general res judicata if an insured’s loss is partly insured and partly uninsured?

September 5th, 2016 · No Comments

In De Armas v Peters [2015] NSWSC 1050, the Supreme Court of NSW declined to grant leave to appeal from a decision of the Local Court.  The Local Court had allowed a man to sue for the cost of repairs to his car, even though he had previously sued her for car hire costs he incurred while those repairs were being undertaken.  And even though, in that first case, the Local Court had found him to be the negligent driver, not the woman.  Impossible?  There was of course a twist.  The first suit was brought with the involvement of a car hire company from whom the man had hired the car he used while his car was being repaired. No doubt they had told him that the car would be at no cost to him and the cost of the hire would be recovered by the car hire company’s solicitors from the negligent driver.  The second suit was brought by his insurer, having stepped into his shoes through the law of subrogation.  The man’s losses were partly insured and partly uninsured, hence his deal with the car hire company to which he was probably referred by his repairer.  And the woman’s insurer had not taken any defence of abuse of process in either proceeding before she obtained judgment in the first.  You can watch a discussion between AAMI’s solicitor and barrister about the decision on the excellent BenchTV here. [Read more →]

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News from Tibet

August 15th, 2016 · No Comments

For some reason the latest of many stories I keep up with from Tibet, where I have travelled, prompts me to share it with you.  Maybe it’s the contrast with the case of wrongfully convicted Steven Avery, the subject of ‘Making a Murderer’ (did you hear that Brendan Dassey’s conviction has just been overturned?).  Maybe it’s that I too have a 6-ish year old, whose school is forever receiving delegations of kids from China who, and their parents before them, have likely been fed exclusively propaganda about Tibet which they no doubt consider to be a fractious and backward, quaintly religious outpost of neo-feudalists, a wild west.  Maybe it’s the people smuggler angle.  Maybe it’s the amazement at finding a story which causes the Don Dale saga to pale into comparative insignificance. Maybe it’s a frustration with the self-censorship about China which is so pervasive, and the near-complete control by the Communist Party of China of even Australian media (Chinese language media, to be precise).  Maybe it’s that this case has been thoroughly investigated by New York’s Human Rights Watch, whom I trust absolutely, and whose 108 page report forms the basis of much of what follows.

Who knows? But here goes with the short version (I’m going to assume the Tibetans’ suspicions are correct, which seems fair to me, given the Chinese authorities’ lack of enthusiasm for sharing and enthusiasm for repeatedly cremating details of the case). The Chinese framed one of the most senior supporters of the Dalai Lama still in Tibet, Tenzin Delek Rinpoche, himself a venerated lama with a philanthropic flair. They charged him with financing a terrorist bombing, sentenced him to death in a mockery of a trial along with a co-accused whom they probably procured to implicate Tenzin Delek by torturing him.  Delek’s, but not the co-accused’s, sentence was later commuted to life imprisonment.

The Chinese tortured Delek for 13 years, beating him, starving him, throwing boiling or freezing water over him, all the while sarcastically suggesting he use some of his magic lama powers.  They hurriedly cremated him inside the prison without an autopsy after his death in jail, locked his grieving sister and her daughter up without charge for weeks and released them only after trying to have them promise they would not publicly suggest he was poisoned, and harassed or detained 60-80 supporters at around the same time 100 human rights lawyers and activists were thrown into jail. All of which prompted the super-cool looking niece Nyima Lhamo, pictured, to pay people smugglers $10,000 to trudge her across the Himalaya to Dharamsala, the Dalai Lama’s place of exile in the Indian Himalayas, to tell the story, leaving to the depravities of infuriated Chinese officials her ailing mother and 6 year old daughter.

And guess what? Since I started this post, news has reached me that the mother and daughter have gone missing after being detained by Chinese police. And news has also come to my attention of the propaganda video with a purported confession of a prominent lawyer arrested in the 2015 arrests.  As the Washington Post put it, ‘Wang rips apart her entire career of human rights law. Speaking in mellifluous tones while sitting underneath a tree, she denounces her former colleagues and refuses to accept a prestigious human rights prize awarded to her by the American Bar Association.’  The op ed explains how this is achieved: ‘…  the authorities might move to physical torture, including chaining detainees to a “tiger bench” in excruciating positions for days and sometimes weeks, applying electric shocks to their genitals, jolting and beating them with electric police batons, or placing them in long solitary confinement, to name a few. Some activists have been so traumatized as to be unable to speak after being released from detention …’.

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Privilege and disciplinary investigations

August 8th, 2016 · 1 Comment

Lawyers have an obligation proactively to assert and protect the privilege enjoyed by their clients and former clients: Re Stanhill Consolidated Ltd [1967] VR 749 at 752. I wrote about it in this post about the Legal Profession Act 2004 (Vic).  Lawyers have no implied or, I would suggest, ostensible authority to waive privilege belonging to former clients. The administration of justice will protect the privilege of persons who are unaware of the issue arising and make no assertion of the privilege: Legal Services Board v Garde-Wilson [2007] VCAT 1406 at [89].

In investigations of complaints by former clients about their former lawyers, no privilege issue arises, either under the Legal Profession Act 2004 or the Legal Profession Uniform Law.  The complaint would amount to an implied waiver at common law, and the question is put beyond doubt by statute.  Of course, this proposition has its limits and the wholesale use of client secrets against them in a manner disproportionate to the need to divulge them in response to their complaint is a seriously ugly look.  The issue of client privilege arises where disciplinary investigators are investigating complaints by non-clients, or in own motion investigations.  So, for example, I am advising in relation to a complaint made by the husband about conduct by the wife’s solicitors in a matrimonial proceeding between them.

Where a lawyer purports to waive a former client’s privilege without the client’s instructions, or simply fails to consider the question before handing documents over to the State, the law requires ‘the cat to be put back in the bag’ as far as possible: B v Auckland District Law Society [2003] UKPC 38 at [69]; British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 at [192].  So a disciplinary tribunal might well not receive, or put from its mind, evidence of privileged communications obtained by legal regulators in the course of investigations of non-client complaints where the client had not waived privilege, and indeed exactly that occurred in a VCAT case in which I was involved.

The law in relation to privilege and non-client complaints under the Legal Profession Act 2004 was clearly declared by VCAT.  The situation faced by  lawyers investigated under the LPUL following the complaints of non-clients, and in own motion investigations, in respect of pre-LPUL conduct is not so clear.  It is the subject of this post, which suggests that notwithstanding what the Legal Services Commissioner will tell you is a clear abrogation of privilege by the LPUL for all investigations conducted under it, lawyers in such circumstances should think carefully before giving up privileged communications without their former clients’ informed consent.  They should, in my submission, at least alert their clients to the possibility that the privilege might still be available to be asserted and give them the opportunity to assert it, if they care to sufficiently.

It will be increasingly important in the future to make clients aware that lawyer-client confidentiality has been largely done away with: all a person curious about the advice being obtained by his adversary need do is make a complaint about the adversary’s lawyer.  The old advice that ‘everything you tell me is strictly confidential’ cannot now be given without risking a negligence suit. Every time a solicitor tells a battered woman that whatever she tells him will be just between her and him, and he will seek her permission before using the information publicly or even in the Family Court, will have to add ‘unless your boyfriend or his father or a men’s rights action group make a disciplinary complaint against me, as they are perfectly entitled to do’.  So too the QC representing BHP in relation to tax matters: ‘Of course you understand that all this is privileged (unless the judge, who’s getting pretty cranky at me, refers me off for investigation by the Legal Services Commissioner)’.  I don’t think I’m being hyperbolic; I’m acting at this very moment for a solicitor whom the Commissioner is compelling to divulge privileged communications connected with the subject of proceedings, in a complaint by the other side to the proceedings, mid-proceedings.

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Yet more on the obligation on Legal Services Commissioners to plead their case properly and stick to it

August 7th, 2016 · No Comments

Legal Services Commissioner v AL [2016] QCAT 237 is a decision of a disciplinary tribunal presided over by Justice David Thomas, President of QCAT and a Supreme Court judge. It is therefore of high persuasive value, and treats Queensland provisions which are the same as the equivalent Victorian provisions. And it provides what I suggest with respect are the correct answers to the following questions:

  • How negligent do you have to be before you can be found guilty of unsatisfactory professional conduct as defined in provisions which say that the concept includes ‘conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent’ lawyer holding a practising certificate? (Answer at [44] and [27]: substantial and very obvious fallings short of the standard, established by direct inferences from exact proofs.)
  • What must be pleaded specifically in a disciplinary charge? (Answer at [82] – [92]: all states of mind, not only dishonest intents, and all facts to be relied on (‘the charges to be levelled must be fully and adequately set out in the Discipline Application. As a matter of procedural fairness, the Practitioner should not be left in any doubt as to the extent of the allegations that is to be met.’)
  • To what extent is a disciplinary tribunal constrained in its decision making by the allegations specifically made in the charge? (Answer at [96] – [108]: absolutely: if no state of mind is alleged, the prosecution should not be allowed to call evidence as to state of mind; ‘it would be wrong to admit evidence the principal purpose of which is to establish conduct that lies beyond the ambit of the charge’.)
  • Does the mere fact that charges are not allowed on taxation mean that there has been overcharging such as to warrant discipline? (Answer at [76] – [77]: no)

The Tribunal dismissed charges against a solicitor who lodged a caveat pursuant to an equitable mortgage without checking that it satisfied the Statute of Frauds’ writing requirements and against a partner of her firm who took over her files when she was on holidays and billed the client for the work in attempting unsuccessfully to register the caveat.

I move from the specific facts of this QCAT case to general comment (what follows is certainly not veiled reference to the conduct of the Commissioner’s counsel in QCAT). There is a very real reason to insist on the particularization of states of mind in disciplinary tribunals, including particulars of actual and constructive knowledge. These details do not always get left out just because it is thought that disciplinary tribunals are not courts of pleading and such minutiae is not appropriate. Nor do they just get left out because they are thought to be inherent in the allegation, or because of incompetence, or mere mistake. Rather, they get left out because bureaucrats have investigated incompetently and when competent counsel come to plead disciplinary applications based on the investigation, they do not have a sufficient factual foundation to make these allegations, or perhaps are simply too timid.

But sometimes counsel with civil practices, untutored in the art of prosecutorial restraint, and safe in their private belief that the practitioner is in fact much more evil than incompetent investigation established, might fall prey to temptation. Mealy-mouthed, ambiguous allegations might be made which require the practitioner to get into the witness box. Then, all manner of unpleaded allegations as to states of mind and as to completely un-pleaded conduct, justified in relevance as tendency evidence or circumstantial evidence of the pleaded facts, might be cross-examined out of the practitioner and an unpleaded case presented to the disciplinary tribunal in closing. In a tribunal not bound by the rules of evidence, such questioning may be waved through with lip service to the proposition that objections will be dealt with by according appropriate weight to the evidence in the final analysis. Queensland leads the charge against such conduct, and I can’t help thinking it’s because Supreme Court judges seem to get involved in disciplinary decisions more often up there. All power to them. So impressed am I with this latest judgment, I have decided to go on a study tour of the Sunshine Coast in the September school holidays.

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A little case about a barrister suing a solicitor for fees

July 14th, 2016 · No Comments

Barnet Jade has given us an admirably constructed decision of Assessor Olischlager, a no-doubt busy decision maker in the Small Claims Division of the Local Court in NSW.  Dupree v Russo [2016] NSWLC 8 was a barrister’s suit for fees against a solicitor.  Call me a dag, but it is always a pleasure to find diligent, elegant decisions carefully considering bang-on authority from the busiest decision makers who generally receive little assistance in the researching and writing of decisions. The decision considers whether costs agreements came into existence by the continued giving of instructions, and between whom, what disclosure obligations the barrister had, and whether the limitation period for suing for the fees was re-set by an acknowledgement of debt by the solicitor.

The barrister offered to enter into a costs agreement jointly and severally with his instructing solicitor and their client.  The offer said that the continuing provision of instructions would be taken as acceptance.  The solicitor continued to give instructions on behalf of the client.  The Court found that a costs agreement arose: the instructions were given by the solicitor personally and as agent for his client, as an act of acceptance on both their parts.  As the Assessor said: [Read more →]

→ No CommentsMore articles on: Costs agreements · costs disclosure defaults · Legal Profession Act · Professional fees and disbursements · The suit for fees

A defendant seeking in Victoria to join a concurrent wrongdoer need not establish a prima facie case by evidence

July 7th, 2016 · No Comments

Here is a link to a presentation by Ross Macaw QC on proportionate liability.  It is produced by benchTV, an enhancement to the long-excellent new case notification service, Benchmark, provided by AR Connoly & Co in Sydney.  Mr Macaw considers Justice John Dixon’s beautifully written judgment in Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Limited [2016] VSC 99.

In that case, there was a fire in a warehouse and the plaintiffs’ goods and nearby land were damaged. They sued the occupier of the warehouse and others.  The occupier said that if it was liable, then it was also the fire inspector’s, the builder’s, and others’ fault as well. The question was what a defendant needed to do in order to have alleged concurrent wrongdoers not sued as defendants by the plaintiffs joined.  Was a mere pleading assertion sufficient, as in the case of a third party notice? Or was it necessary to produce some evidence sufficient to allow the Court to see a prima facie case against the alleged concurrent wrongdoers, and exercise a discretion to join?  Even though those seeking to join are not usually forced to establish by evidence a prima facie case, is that just because it is often waived by the person resisting joinder?

The answer is: you need a pleading which is not hopeless; you generally don’t need to put on evidence; the power to join is in s. 24AL of the Wrongs Act 1958 and the Rules of the Supreme Court are not really to the point; the power is discretionary and evidence might be necessary if some point which goes to the discretion (e.g. prejudice by virtue of delay, or abuse of process) is enlivened, but that evidence would not generally be as to the merits of the claim sought to be brought). [Read more →]

→ No CommentsMore articles on: "professional negligence" · defences · Negligence · Proportionate Liability

Proving a loss for insurance purposes; inadequacy of reasons as an appeal ground

July 5th, 2016 · No Comments

In Kalloghlian v Chubb Insurance Company of Australia Ltd [2016] NSWSC 902 (the Court’s summary is here), a man said he purchased a Rolex in Syria in 2005.  He insured his things with Chubb against loss anywhere in the world.  The policy was described as ‘Deluxe’.  It specifically insured items  which the insured owned as well as things he possessed.  The insured said he lost the watch on Copacabana Beach in July 2014.  The police declined to take a report.  He had no receipt from its purchase.  He could not remember from which jeweller he had purchased it.  He had lost his passport for the period of the trip to Syria.  Chubb declined the claim.  The insured sued.  The Magistrate dismissed the suit.  The insured appealed. The Supreme Court ordered a new trial.

The decision is hardly ground breaking.  But it is simple.  And it is useful to be reminded about the following:

  1.  An insured may prove a loss by giving oral evidence of the loss.  A lack of documentary or other corroboration is not fatal.  It is just something to be assessed in considering whether the plaintiff has satisfied the Court it is more likely than not that he suffered the loss.
  2. That is so even where it is a condition of cover under the policy that the plaintiff provide various proofs of ownership and of loss.  That is because s. 54 of the Insurance Contracts Act 1984 excuses breaches by the insured of policy conditions where the breach cannot have caused the loss, except to the extent of any prejudice to the insurer.
  3. Even busy decision makers in over-worked jurisdictions have to identify controversies raised by the parties which are necessary to determine in order to find for one party or the other, and explain why they resolved those controversies the way they did.  A failure to do so will result in the decision being set aside.  Robert Sheldon QC’s blog keeps an eye on this area of law.  See here and here and here.  The Court’s summary of the obligation in New South Wales to give adequate reasons is set out in full below.
  4. Where the facts are ascertained sufficiently that there is only one correct decision, the appellate tribunal may substitute its decision.  Where, as here, however, it was necessary to take into account how witnesses presented, the appellate tribunal will remit the case to be re-heard, where necessary (as here) by a new decision maker.

The obligation to give proper reasons, especially where there are contests of oral evidence, is an important one and should be jealously guarded.

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Advocates’ immunity: at once more powerful and narrower than most yet understand

June 23rd, 2016 · No Comments

Advocates’ immunity was, until recently, more powerful than many lawyers were aware. Since the 1 July 2015 introduction of the Legal Profession Uniform Law and the High Court’s May 2016 decision in Attwells v Jackson Lallic Lawyers Pty Limited,[1] however, it may be narrower than many realise. And perhaps not everyone is aware that the immunity these days is very likely peculiar to Australia; it is certainly not a feature of English, American, Canadian, Continental, Indian, South African or New Zealand law.[2] [Read more →]

→ No CommentsMore articles on: Advocates' Immunity · Barristers' immunity · Civil Procedure Act 2010 (Vic) · Costs Court · Discipline · Insurance · Legal Profession Uniform Law · Legal Services Commissioner · National Profession Uniform Law · negligence as disciplinary breach · Professional fees and disbursements · Taxations · The suit for fees · Wasted costs

Applications to extend time to tax lawyers’ bills: keep ’em tight

June 21st, 2016 · No Comments

Many disputes about costs are still governed by the Legal Profession Act 2004.  It specified as the time in which to seek taxation a period of 12 months.  Where a bill is given, the 12 month period starts from the date of service of the bill.  But since Collection Point Pty Ltd v Cornwalls Lawyers Pty Ltd [2012] VSC 492, it is clear that clients have until 12 months after the service of the final bill in any particular matter to seek taxation of any previous bill.  Of course what is the final bill in the same matter is a difficult question.  What is clear is that one costs agreement may govern several matters.

Applications to extend time must be made to a Justice of the Supreme Court (as opposed to any decision maker in the Costs Court or any Associate Justice) under s. 3.4.38(6).  The law is well-summarised by John Dixon J in Rohowskyj v S Tomyn & Co [2015] VSC 511, and his Honour’s guidance about the nature of an extension of time application is useful and prone to be overlooked: [Read more →]

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The Bureau de Spank’s obligation not to publish about disciplinary orders until lawyers’ appeal rights are spent

June 19th, 2016 · No Comments

Parliament is considering a bill to re-instate the disciplinary register, and to prohibit the Bureau de Spank from trumpeting its successes before the respondent practitioners’ appeal rights are exhausted: Legal Profession Uniform Law Application Amendment Bill 2016 (Vic.).  Cl. 150E of the Bill proposes to prohibit the Legal Services Board from providing to the public information about disciplinary orders made by the VCAT’s Legal Practice List while appeals or appeal rights are live.  The prohibition extends beyond publication on the proposed disciplinary register to disclosure of information to the public more generally.

There is a problem with the Bill though: it focuses its protection of the profession on prohibitions of publications by the Legal Services Board about final orders.  The Board shares a website and premises with the office of the Legal Services Commissioner.  The CEO of the Board is in fact the Legal Services Commissioner, Michael McGarvie, who is also the applicant in all disciplinary prosecutions of lawyers in Victoria.  Yet the CEO, qua Commissioner, is content for his staff to write about cases he is prosecuting, before any orders have been made and while the tribunal is considering what orders to make.  On the homepage of the Board + Commissioner’s website, no less.

If parliament is concerned to ensure that the reputation of practitioners is not to be ruined by accounts of current proceedings by one of the parties to them where the aspect of things might change dramatically upon appeal, or even by bad decisions in such proceedings which are to be appealed, it ought to consider adding the Commissioner to the class of person covered by the prohibition, and to make clear that neither the Board nor the Commissioner ought publish details of disciplinary prosecutions while they are before the disciplinary tribunal.

It is not uncommon for appellate courts — the Supreme Court or the Court of Appeal — to reverse decisions unfavourable to lawyers in disciplinary prosecutions of lawyers in VCAT’s Legal Practice List, or to substitute decisions more favourable to lawyers than those of VCAT or the legal regulators.  So the no publicity pending appeal proposition actually has some important work to do in the real world.  Consider, to name a few, Legal Services Commissioner v McDonald [2015] VSC 237PLP v McGarvie [2014] VSCA 253Stirling v Legal Services Commissioner  [2013] VSCA 374Burgess v Legal Services Commissioner [2013] VSCA 142Brereton v Legal Services Commissioner [2010] VSC 378Byrne v Marles [2008] VSCA 78, Quinn v Law Institute of Victoria [2007] VSCA 122Byrne v Law Institute of Victoria [2005] VSC 509. Consider also non-lawyers: Omant v Nursing and Midwifery Board of Australia [2014] VSC 512, and Towie v Medical Practitioners Board of Victoria [2008] VSCA 157 where the Court found that VCAT’s standard orders in disciplinary hearings were contrary to the privilege against penalties.  It will be observed that some of those decisions were made by very experienced members of VCAT’s Legal Practice List, and several by its Vice-President, a judge.

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