Open offer under cover of denial of negligence averts hearing

Chen’s Case [2006] VCAT 748 (Senior Member Howell): costs; s. 132(b); s. 133(2); s. 407 (see the associated disciplinary decision here)

A solicitor averted being found negligent by openly offering to pay the claimant the maximum amount VCAT could award under cover of a denial of negligence. Mr Howell found that it would not be “fair” to put the solicitor through a hearing only to determine negligence.

The limit of the Legal Profession Tribunal’s jurisdiction under the Legal Practice Act, 1996 was unlimited, but its power to award compensation was limited to $15,000 per dispute. VCAT’s Legal Practice List’s power is now limited to $25,000, but this case was caught by transitional provisions whereby VCAT had to pretend it was the Legal Profession Tribunal — not a difficult exercise, since the decision maker, Senior Member Howell, was formerly the Legal Profession Tribunal’s Registrar.

The solicitor, having been found guilty of two counts of unsatisfactory conduct on the same facts, offered to pay Ms Chen $15,000 16 days before the merits hearing. Ms Chen said she wanted her day in court as much as the money and wanted a formal determination of her case. When she said she wanted to punish the legal practitioner and that she wanted a determination of liability so she could have her second bite of the cherry in the courts under s. 133(2) of the Legal Practice Act, 1996, she may have been a little too frank, because Mr Howell refused to allow the case to proceed. Though s. 132(b) of the Legal Practice Act, 1996 said that the Tribunal “must hear and determine” a dispute which was not settled at conciliation, Mr Howell found in the injunction to act “fairly” in s. 407 an implied obligation only to hear and determine the dispute if it would be fair to do so. He found that where the solicitor was willing to hand over the maximum amount of compensation the Tribunal was empowered to award, it would be unfair to compel the solicitor to endure a two day hearing in order to determine that which the solictor refused to concede, liability for negligence.

He ordered that Ms Chen pay the solicitor’s legal costs from the time of the offer to the day of hearing. County Court scale D ($50,000 and above) was said to be appropriate because of the complexity of the facts and the legal issues involved (as was said to be demonstrated by the reasons for the disciplinary decision). He said:

“The Legal Profession Tribunal decided on many occasions that an appropriate court scale should be used as a guide in the making of orders as to costs. An appropriate court scale is a scale that deals with matters of a similar kind and similar complexity to the matter dealt with by Tribunal.”

A rough taxation suggested that the costs were $7,303, and they were rounded down to $6,000. For some reason, the solicitor’s attendance to give evidence was disallowed. The solicitor’s lawyer’s photocopying was allowed at the rate of $1.90 per page and the solicitor’s own scanning of documents to give instructions and to prepare for giving evidence was allowed at the rate of $1.50 per page. Counsel’s appearance was allowed at $1,689. Mr Howell also ordered Ms Chen to pay the witness expenses of a doctor she had summonsed to appear, and in fact reduced the compensation by the amount of the witness expenses and ordered the solicitor to pay the witness expenses direct in a most unusual exercise of his discretion.

Roisin Annesley was Counsel Assisting the Tribunal; Danny Masel was for the solicitor

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