In the Legal Profession Uniform Law (Vic), there are simple prohibitions, prohibitions breach of which are punishable by civil penalties, and criminal offences punishable by fines and jail. The civil penalty provisions are new to the LPUL compared with the previous legislation. What does it all mean? Continue reading “Bog-ordinary, disciplinary, civil penalty, criminal”
I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by victorious litigants who engage their lawyers on the basis of a greater variety of pro bono arrangements. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the last few days, I published parts one and two of the paper I distributed. What follows is the third and final part, which considers different kinds of client-favourable costs agreements (some quite esoteric) and analyses their indemnity principle implications. It also provides some thoughts on how to draft costs agreements for work done otherwise than on a purely commercial basis, and how to ensure counsel get paid. Part one is here and part two here
Species of client-favourable costs agreements
Options available to lawyers who wish to do work at less than their usual rates for non-commercial reasons include:
(a) not making any arrangements as to fees at all;
(b) charging your usual rates and leaving it to your discretion whether you send out a bill, or whether you forgive some or all bills given in the event that certain outcomes obtain;promising to do the work for free;
(c) agreeing to do the work at a reduced rate;
(d) doing the work on a no win = reduced fee basis;
(e) doing the work no win = no fee;
(f) doing the work no costs order = no fee;
(g) doing the work on no actual recovery of costs / compensation / costs or compensation = no fee basis. Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 3”
I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by victorious litigants who engage their lawyers in a greater variety of pro bono bases. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the next few days, I will publish, in digestible chunks, the paper I distributed. What follows is the second part. Part one of this article is here.
The Court of Appeal declared that the indemnity principle is not offended by a costs agreement which is conditional on the client obtaining a costs order in Mainieri v Cirillo (2014) 47 VR 127. In that case, the successful party’s solicitors’ costs agreement said: Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 2”
In England, the stern sounding Bar Standards Board brought disciplinary proceedings against a black barrister, Portia O’Connor, the first barrister to become a partner in one of the very modern alternative business structures they allow in old Blighty these days. They succeeded but the decision was overturned on appeal and the appellate tribunal was not complimentary about the procedures of the Board. So the barrister sued the Board for discrimination. The regulator relied on limitation defences. The Supreme Court has just decided that the defences were misconceived: O’Connor v Bar Standards Board  UKSC 78. Should be an interesting case.
Meanwhile, in Kaczmarski v Victorian Legal Services Board  VSC 690 the Board, represented by an external firm of solicitors and experienced counsel, tried unsuccessfully to shut an unrepresented shareholder of an incorporated legal practice out of an appeal against the reappointment of an external manager to the practice. It did so by arguing for an extraordinarily strict and as it turned out quite wrong approach to what it said was an un-extendable 7 day time limit for appealing.
I must say I’m puzzled what all the fuss was about, in view of s. 155 of the Legal Profession Uniform Law Application Act 2014. That section makes clear that nothing in the LPUL limits or restricts the Supreme Court’s administrative law jurisdiction, so that the reappointment of the external manager might have been challenged by judicial review, for which order 56 of the Supreme Court’s rules provides a 60 day extendable time limit, or under the Administrative Law Act 1978 which provides a 30 day time limit. But neither side seems to have made argument by reference to it. The bases on which the decision might have been challenged, and the relief available might well have been different between the three avenues of challenge, of course. Continue reading “Supreme Courts tell legal regulators their limitation defences are bollocks”
I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by litigants who engage their lawyers in a greater variety of pro bono bases. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the next few days, I will publish, in digestible chunks, the paper I distributed. What follows is the first part.
The amendments to Order 63 of the Supreme Court’s rules and of Order 63A of the County Court’s rules are designed to overcome one aspect of the operation of the indemnity principle in costs law.
Simply put, costs are awarded as a partial indemnity to a successful party for that party’s liability to pay their own lawyers and witnesses and for such payments already made. The indemnity principle says that the amount allowed under a costs order may not exceed the total of those liabilities. Put most pithily, the loser’s costs liability cannot be greater than the winner’s fees and disbursements. Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 1”
VCAT has published reasons, the first I’ve come across, dealing with the allowance of costs under a costs agreement void for disclosure defaults: Sleath v RGL  VCAT 1998. Though they do not say so, it seems that the principal logic of the determination, under the same principles as the Costs Court is required to have regard to in taxations, was to keep the practitioners to their original written estimate notwithstanding subsequent oral updates. Scary stuff for lawyers if other decision makers reason similarly. Whether the Costs Court will reason similarly is an interesting question. It may be more likely that the Legal Services Commissioner will feel compelled to adopt similar reasoning in those costs disputes which it determines itself rather than referring off to VCAT. Good news for clients and third party payers if so. Continue reading “Holy moly! VCAT finds costs agreement void for ambiguous disclosure then orders solicitors to content themselves with original estimate”
An ACT practitioner seems to me to have been skilfully represented, escaping with findings of unsatisfactory professional conduct, a reprimand and a fine. The decision in Council of the Law Society of the ACT v LP  ACAT 74 just shows how far cooperation and a persuasive articulation of remorse and insight can go.
The practitioner illegally sued his former client for fees in circumstances where he knew that the very person who had instructed him, a director of the client who had given a director’s guarantee and so was a third party payer, had sought taxation. Generally speaking, solicitors cannot sue their clients for fees once the client has commenced taxation.
In support of applications for default judgment, and to wind up the corporate client, the practitioner represented to the court, including on oath, that there was no dispute about fees. Given that the director, a builder, was the alter ego of his building company client, the proposition that the company did not dispute the fees attracted a charge of professional misconduct by swearing a false affidavit, a thoroughly serious allegation. By a plea bargain, it was downgraded to a weird charge of unsatisfactory professional conduct (varied by me for readability):
The practitioner breached his general law ethical duty of professional conduct or the duty owed to the director of his former client pursuant to Rule 1.1 of the Legal Profession (Solicitors) Rules 2007 to continue to treat the former client fairly and in good faith, and not to treat it otherwise than in an honourable and reputable manner during the dispute over costs owed by the director or the former client.
Rule 1.1 was itself a weird old rule:
‘A practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner.’
Perhaps the horribleness of the original false affidavit charge’s drafting contributed to the prosecution’s willingness in the end to back away from it and retreat into the weirdness set out above. The original charge (again, varied by me for readability) was: Continue reading “Suit for fees goes badly wrong but could have gone much worse”
Professor Hampel has been telling me recently that the rule in the House of Lords’ judgment in Browne v Dunn (1893) 6 R 67 is much mis-understood by advocates and decision makers alike. Another judge apparently gives a talk to the participants in the Victorian Bar’s readers course each intake emphasising the narrowness of the obligation. Good advocates and judges, it appears, find unnecessary and inelegant recitations of strings of ‘I put it to yous’ as irritating as good advocates find irritating the suggestions from not so good decision makers that matters which were not required to be put to a witness must be put, or, after the event, ought to have been put.
The general tenor of these teachings is that there is an obligation to put matters to opposing witnesses less often than is sometimes assumed, or that a counsel of caution in putting things to witnesses to be on the safe side of the rule has its forensic downsides. As I understand it, the perception is that some counsel see the need to lay out their whole case to opposing witnesses to give them an opportunity to comment on it, regardless of whether the witness is already well appraised by witness statements or documents of the cross-examiner’s client’s case or whether the matters put in fact contradict or tell against any evidence of the witness.
Professor Hampel’s half-serious theory about the confusion flowing from the decision — that no one has ever read it — may be correct. Someone else seems to have had the same concern, having set up a website devoted solely to putting the hitherto obscurely reported and difficult to find decision on the net. (And, what do you know? The case is actually about relations between solicitors and clients which is principally about privilege and the liability of a solicitor to action for words spoken between solicitor and client.)
But there is one aspect of the rule which repeatedly attracts criticism when it is not complied with. There is an obligation to squarely put to a witness in cross-examination allegations of dishonesty (or, to use a precise synonym, fraud). Lord Herschell said at 70-71: Continue reading “Is there an obligation to put in cross-examination that the witness is lying?”
Update, 30 November 2017: The Full Court of the Tasmanian Supreme Court has weighed in, deciding that a practitioner who was admitted but yet to apply for a practising certificate was not a person to whom the Chorley exception applied: QRS v Legal Profession Board of Tasmania  TASFC 13, and that the exception only favours lawyers who held a practising certificate at the time they did the work.
Update, 24 October 2017: Readers have brought my attention to a couple of developments in relation to the law about the costs awards available to various classes of litigants who represent themselves. First, in Joint Action Funding Limited v Eichelbaum  NZCA 249 (14 June 2017), the New Zealand Court of Appeal decided that the Chorley exception in favour of lawyers who represent themselves is not available to a barrister who acted for himself. But as Andrew Beck pointed out in ‘Who Gets Costs? The Plight of the Unrepresented’  NZLJ 281 (I have a copy if you want one), the Court’s reasoning may affect a broader class of unrepresented persons, and the decision may in time come to be seen as a substantial inroad into the Chorley exception. Though the New Zealand High Court considered the Australian authorities in some detail, between the NZ case being argued and judgment being delivered, the NSW Court of Appeal delivered what seems to me likely to be a decision on rather similar questions in Coshott [sic!] v Spencer  NSWCA 118 (31 May 2017). Continue reading “Costs of the lawyer litigant: judgments all over the place”
Associate Justice Derham from time to time produces beautifully succinct and thorough summaries of the law, especially laws relating to procedure, in his careful judgments. Busy practitioners are very grateful. Here is his most recent such summary, from Fotopoulos v Commonwealth Bank of Australia  VSC 61. It is a helpful exposition of the substantive legal obligation which is sometimes referred to as an ‘implied undertaking’ or ‘the Harman principle’ after the House of Lords’ decision in Harman v Secretary of State for the Home Department  1 AC 280. Continue reading “The ‘implied undertaking’ which is really a substantive legal obligation”
Update, 10 August 2017: It once seemed to me having read Pizer’s Annotated VCAT Act (2015) at [8.60] that there was an argument to be made that the Evidence Act 2008 might have some operation to the extent that it is not over-ridden by s. 98 of the VCAT Act 1998, in that the Evidence Act 2008 empowers courts to do certain things which might not be described as part of the ‘rules of evidence’ referred to in s. 98. The Evidence Act 2008’s definition of ‘Victorian court’ (in whose proceedings the Act is said to apply) is inclusive of tribunals bound by the law of evidence, rather than excluding all tribunals which are not bound by the law of evidence, and VCAT has been regarded as a ‘court’ for various purposes. But the Court of Appeal has effectively decided (albeit without considering my thought) that the Evidence Act 2008 simply does not apply in VCAT: Karakatsanis v Racing Victoria Limited  VSCA 305 at  – .
Update, 9 August 2017: To gather the law together in one place:
(a) Pizer & Nekvapil, Pizer’s Annotated VCAT Act treats this question at [VCAT.98.160] citing Curcio v. Business Licensing Authority (2001) 18 VAR 155 at ; Pearce v. Button (1986) 8 FCR 408 at 422; Golem v TAC (2002) VAR 265 at [9(iv)]; Secretary to the Department of Infrastructure v Williamstown Bay and River Cruises Pty Ltd  VSC 191 at ; and Medical Practitioners Board of Victoria v Saddik  VCAT 366 at .
(b) A reader commended Justice Giles’s article ‘Dispensing with the Rules of Evidence’ at Vol 7 No 3 Australian Bar Review.
(c) Consider also Danne v The Coroner,  VSC 454, noted here.
Original post: Here is a useful collection of interstate and federal law about what statutes are actually to be taken to mean when they say that a tribunal is not bound by the laws of evidence (like VCAT), from Justice Refshauge’s reasons in Pires v DibbsBarker Canberra Pty Limited  ACTSC 283: Continue reading “Tribunals not bound by the laws of evidence”
The English High Court’s Justice Leggatt (now a judge of the Court of Appeal) was called upon to decide a claim for £14 million in which the plaintiff relied on a contract said to have been entered into at the Horse & Groom public house in Great Portland Street in London. (Freshfields’ case note is here). In Blue v Ashley  EWHC 1928. His Honour reiterated earlier comments he had made to the effect that:
‘While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people’s memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate.’
The modern approach, his Honour essentially said, is to get all the authentic documents and study them carefully and then allow memory only to fill in the gaps. This is what his Honour said:
Often enough, judges refer the conduct of lawyers appearing before them (or disclosed by the case they are adjudicating) to the Legal Services Commissioner for investigation. A recent example is Re Manlio (no 2)  VSC 130. Judges also refer the conduct of non-lawyer parties to investigative agencies, e.g. where a tax fraud is suggested by evidence in the case.
Generally, this is not done pursuant to any statutory directive or authority. An exception is s. 202 of the Legal Profession Uniform Law which requires the Costs Court to refer a matter to the Legal Services Commissioner if it considers that the legal costs charged, or any other issue raised in the assessment, may amount to unsatisfactory professional conduct or professional misconduct. (Compare s. 3.4.46 of the Legal Profession Act 2004 which authorised rather than required the Taxing Master to make a referral.)
I have never been particularly clear about the nature of such a referral, or as to the procedures which ought to be followed. Gibson DCJ set out the principles recently, at least as they apply in NSW, in Mohareb v Palmer (No. 4)  NSWDC 127: Continue reading “Judges’ referrals to the ATO, police, Legal Services Commissioners”
The NSW Supreme Court has quashed decisions of the NSW Law Society to commence disciplinary proceedings against a Sydney solicitor following complaints that the solicitor advanced allegations of negligence in a costs assessment against two barristers without an adequate factual foundation: SAL v Council of the Law Society of NSW  NSWSC 834, a decision of Wilson J. The Court restrained the Council from continuing the disciplinary prosecution which had been stayed pending the application for judicial review. The Council’s reasons were inadequate in not dealing with exculpatory material advanced by the practitioner during the investigation, and in not disclosing the Council’s path of reasoning in relation to why the conduct was professional misconduct rather than unsatisfactory professional conduct or why it was appropriate to prosecute rather than make an in-house determination such as a reprimand and a compensation order.
The implications of this decision are profound, for many a set of reasons at the conclusion of a disciplinary investigation are likely no better than those which were examined in this case, for the simple reason that no one has ever really sought to take the adequacy of these kinds of reasons to task. First, those who are subject to current prosecutions might seek prohibition to stop them in their tracks: if you are involved in a disciplinary prosecution, careful study of this decision is advised. Secondly, with the rise in the quality of reasons at the conclusion of a disciplinary prosecution which one presumes the decision will generate, it may be hoped that better decisions about what to prosecute will be made. Continue reading “Disciplinary prosecution halted because Law Society’s reasons for deciding to prosecute were inadequate”
Jasmin Solar Pty Ltd v Fitzpatrick Legal Pty Ltd  VSC 220 is a little case, but it is instructive about a number of things: solicitor-client taxations can take an awfully long time; some businesses probably don’t understand that they are ‘commercial clients’ and so fail to negotiate rights in lieu of the rights to seek taxation which, under the LPUL they no longer have; some lawyers no doubt have standardised disclosures which advise their clients that they have rights which, if they are commercial clients, they do not have; the costs proportionality provisions extend to cases where costs have become disproportionate as a result of a simple oversight by one or other side’s lawyers.
I gave a presentation at the really well organised Junior Bar Conference this year. The Bar sought questions which the junior barristers who attended wanted answers to. One question, which I thought odd, but which I answered earnestly, was ‘What can a barrister charge for?’ This was my answer:
The starting position is freedom of contract, such that barristers can charge for whatever they can get someone to promise to pay. The costs provisions of the LPUL (the Legal Profession Uniform Law (Victoria)) mostly do not apply in favour of commercial or government clients and commercial and government third party payers. There is newly room, therefore, for much greater creativity in contracting with such clients. Note the application of some provisions about conditional costs agreements and contingency fees, however, even in relation to such clients and such third party payers: s. 170. Continue reading “What can barristers charge for?”
The Civil Procedure Act 2010 applies to proceedings in the Magistrates’ Court, County Court, and Supreme Court but not federal courts or VCAT. Its overarching purpose is to
‘facilitate the just, efficient, timely and costs effective resolution of the real issues in dispute’: s. 7. Continue reading “The Civil Procedure Act’s overarching obligation to keep costs proportionate”
A failure to give reasons is an error of law. Seriously inadequate reasons are corrosive of public confidence in the administration of justice and ought not to be tolerated by an appeal court, since justice must not only be done but be seen to be done. This is the first public policy informing the requirement for reasons by courts and court-like tribunals. As the Supreme Court has observed:
‘To have a strong body of evidence put aside without explanation is likely to give rise to a feeling of injustice in the mind of the most reasonable litigant.’
That is especially so in relation to factual determinations where a right of appeal lies only on a question of law. Even more especially so in a quasi-criminal prosecution with serious consequences for the practitioner in which a disciplinary prosecutor carries the burden of proof as described in Briginshaw v Briginshaw. Continue reading “Appeals from VCAT on the basis of inadequate reasons”
For far too long, the law was unclear about whether costs agreements which said ‘We’ll only charge you if you win and only for work in respect of which we get a costs order’ actually worked. The problem was that losing parties invoked the indemnity principle in the law of costs, arguing that what was recoverable under a costs order was nil. The indemnity principle says that party-party costs awards are in no way punitive; they are wholly compensatory. Party-party costs orders are awarded as a partial indemnity to the winning party’s liability for their lawyers’ fees and other expenses of the litigation. If the winning party has no such liability at the time of the costs order, there is nothing for the losing party to be ordered partially to indemnify. Where the winner’s liability to pay their lawyer was conditional on a party-party costs order, there was, at the moment of making the costs order, nothing to indemnify. Wentworth v Rogers  NSWCA 145 was the leading case for many years. Justice Santow’s dictum was favourable to pro bono solicitors while Justice Basten’s was unfavourable. The third judge did not weigh in on this question.
What the judges in that case said, however, was obiter dicta. Now there is a unanimous decision of the Victorian Court of Appeal which actually decides that this kind of costs agreement works; the winning party may obtain from the losing party a party-party costs order by way of a partial indemnity against the liability to pay their lawyers. The case is Mainieri v Cirillo  VSCA 227 and Nettle, Hansen and Santamaria JJA expressly preferred Justice Santow’s reasoning in Wentworth. It may be expected that state courts, including Courts of Appeal, elsewhere in Australia will follow the Victorian Court’s decision: Farah Constructions Pty Ltd v Say-Dee Pty Ltd  HCA 22 at  and .
That is the good news though. The bad news is that an unfortunate level of confusion still prevails in relation to costs agreements which are even closer to pure pro bono in that they say ‘We won’t charge you anything unless you get a costs order, and then we will only charge you so much as you are actually able to recover from the person ordered to pay costs under the costs order’. A costs agreement which was, as a matter of substance, to that effect was found not to present a problem in LM Investment Management Limited v The Members of the LM Managed Performance Fund  QSC 54. Then in Mainieri, the Court of Appeal left open in obiter dicta the possibility that a costs agreement in which the winning party’s liability to pay their solicitors was conditional on recovery of costs from the losing party might not work. Subsequently, in Mourik v Von Marburg  VSC 601 the Costs Judge in Victoria decided that such an agreement in fact does not work, but the correctness of that decision has subsequently been doubted in dicta of a Victorian Federal Court judge sitting in Sydney. What a mess. But I am not convinced that the pro bono sector should give up on obtaining judicial recognition of a costs agreement which, as a matter of substance, predicates recovery of costs on the actual recovery of costs from the other side. Continue reading “The latest on pro bono costs agreements which preserve the possibility of a costs order against the other side”
As with most years, no doubt scores of Victorian lawyers forgot to renew their practising certificates last year. For months, in some cases, this situation was allowed by the regulators to persist without intervention. In Victorian Bar Inc v GSL  VCAT 435 the VCAT, constituted by Judge Bowman, Peter Jopling QC, and Ms F Harrison made clear that the disciplinary Tribunal expected regulators to be proactive to prevent practitioners inadvertently practising uncertificated. Eventually, at least in some cases, the regulators seem to have raised the issue with some practitioners whose sudden apparent cessation of practice at a young age seemed unlikely.
May I respectfully suggest that you go and check, now, whether you actually have a practising certificate for the current financial year.
The question now that the regulators have apparently complied imperfectly with VCAT’s guidance is what ought to happen? Should the practitioners who are close to blameless for practising without a certificate be given a new one with retrospective effect (some were told, for example, by their office manager that the applications had been lodged before the end of the year, and were entitled to assume that their existing practising certificate had ongoing operation pending the Board getting around to dealing with the application, by virtue of a legislative provision to that effect discussed below). Or should the full consequences of the law, including disciplinary investigation, and the refunding to clients of fees for work done while uncertificated (s. 10, LPUL), be brought to bear? The latter approach has the disadvantage of causing lawyers’ professional indemnity insurer to cancel cover during the period of non-certification and the Fidelity Fund may be unavailable to clients of the lawyers in question in relation to conduct engaged in while uncertificated.
What VCAT said was: