On the perils of the undersupervised law clerk

Legal Practitioners Complaints Committee and JCB [2005] WASAT 213

A sole practitoner dictated many precedent letters for his routine suburban personal injuries practice. His law clerk of 16 years’ experience, an arts graduate and a one-time law student, did all the work in a workers compensation file: she took instructions, signed letters taken from the precedent bank, negotiated with the counterparty, and was charged out at $240 per hour plus GST and $30 per short letter, $50 per one-page letter and $70 per long letter. The solicitor was unable convincingly to establish that he had done anything very much at all.

He was found guilty of “neglect” in failing properly to supervise the clerk and of “unprofessional conduct” in grossly overcharging. The first finding gave rise to a reprimand, the second to a $2,000 fine. Costs claimed at $10,000 were allowed at only $5,000 on the basis that the solicitor successfully resisted a third charge of constructively misrepresenting that the law clerk was a solicitor and on the basis that the retention of senior counsel by the prosecuting Committee was unnecessary. The third charge failed because no evidence was sought to be adduced of the solicitor’s complicity in the alleged deception, a timely reminder of an oft-forgotten principle that there is no disciplinary version of vicarious liability (a different concept from the wrong of failure to supervise). The law as to the supervision of clerks is well summarised in a neat and detailed judgment of Justice Barker, a Supreme Court Judge.

The law on the supervision of clerks was said to be as follows:

“97 The obligations of a practitioner to supervise work performed by clerks within his or her firm were discussed by Malcolm CJ in D’Alessando and D’Angelo v Bouloudas (1994) 10 WAR 191 at 211 – 213. The following propositions may be derived from the Chief Justice’s reasons:

“(1) the obligation of the practitioner to supervise and employ a clerk is imposed in order to ensure that the client receives an appropriate standard of advice and service;

(2) failure to adequately supervise the work of the clerk may constitute unprofessional conduct;

(3) the nature and extent of the obligation to supervise will depend upon the particular circumstances in which the solicitor’s practice is conducted;

(4) ‘the level of supervision required will vary according to the level of competence and experience of the clerk, but it must remain supervision and not amount to complete delegation;

(5) the supervising solicitor should settle and sign all of the clerk’s letters (except formal letters);

(6) there should be in place a system by which each file relating to a matter to which the clerk has the conduct is reviewed by the solicitors at appropriate periodic intervals;

(7) proofing witnesses and discovery and inspection of documents must be carried out under the direction of and specifically reviewed by the supervising solicitor;

(8) so called general supervision which relies on the clerk bringing any difficulty to the attention of the solicitor would not be sufficient.”

In relation to the charge of inadequate supervision, the Tribunal found:

“104 In effect, the law clerk was permitted to act as a practitioner might with either no or inadequate supervision. The practitioner should have had in place a proper system that ensured his actual involvement or supervision of all files handled by the law clerk from the time of the initial consultation with the client. He failed to do so.
105 At material times, the law clerk acted without any direct supervision from the practitioner. It was not until the client was informed that the workers compensation insurers were not prepared to pay out any significant sum on account of compensation, save for amounts referred to in the second schedule of the workers compensation legislation, and the client became “difficult” (some two years later) that the client’s affairs were in any material way referred to the practitioner.
106 The practitioner’s case was that, his law clerk was very experienced had worked with other law firms, and following further training from him, very competent in handling workers compensation matters. She dealt with a range of insurers. They knew her and she knew them. She was very competent in what she did. It followed, in the practitioner’s submission, that close supervision was not required.
107 The Tribunal considers that much of this may be so, but the law clerk is not a legal practitioner. The practitioner more or less delegated to her the function of seeing clients in the first instance, imparting legal advice to them, opening a file and then acting on their behalf thereafter. Only if anything “out of the ordinary” arose would the law clerk refer a file to the practitioner.
108 In the Tribunal’s view the degree of automony given or allowed by the practitioner to the law clerk in this particular case was inappropriate and inadequate. While the law clerk met with the practitioner weekly, according to an established protocol put in place by the practitioner, to discuss files she was handling, she would only raise matters at those weekly meetings on which she thought she needed guidance.”

The gross overcharging charge turned on the practitioner’s own evidence that a law clerk could only justifiably be charged out at the rate of $160 per hour, and he sought to justify the difference on the basis of a “loading” representing his involvement about which the Tribunal simply was not convinced. $240 per hour plus GST was the same as solicitors were entitled to charge under the Supreme Court Scale. The decision is of little value as a precedent in this respect. The Western Australian law on overcharging was summarised like this though:

“98 The rendering of grossly excessive fees for legal services may amount to unprofessional conduct: D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 214; De Pardo v Legal Practitioners Complaints Committee [2003] WASCA 274 at [5]. Factors relevant to determining what a reasonable fee were discussed in D’Alessandro v Legal Practitioners Complaints Committee (supra) at 214.
99 It is not necessary in every complaint of unprofessional conduct by grossly excessive charging, to determine what a reasonable charge would have been in the circumstances, if the amount actually charged was grossly excessive: De Pardo v Legal Practitioners Complaints Committee [2003] WASCA 274 at [18] – [20]; De Pardo v Legal Practitioners Complaints Committee (2000) 170 ALR 709 (Fed C of A) at 725 – 726 [44]–[46].
100 Where there is no applicable scale imposed by way of determination under the relevant legislation controlling a legal practitioner, guidance may be derived, by way of analogy, on an appropriate scale which is substantially similar in nature and responsibility to the business which is the subject of the bill: Pryles & Defteros v Green [1999] WASC 34 at [27].”

The decision on the charge of an alleged holding out of the law clerk as a solicitor started with an admonition that:

“117 There is much to be said for the view that good practice requires a legal practitioner who engages a law clerk to see one of his clients, to ensure the client is informed that he or she is not a legal practitioner, but is working under the supervision of the legal practitioner.”

But there is no vicarious liability for such things:

“120 … In the absence of any evidence that the practitioner was aware, aided, abetted or condoned the making of the representation (assuming that a failure to disclose her status constituted a representation by Mrs EP to the client) the third allegation cannot succeed.”

The statutory framework was that complaints could be made about “unsatisfactory conduct”, defined by s. 3 of the Legal Practice Act, 2003 (WA) to include:

“(a) unprofessional conduct on the part of a legal practitioner, whether occurring before or after admission as a legal practitioner;

(b) illegal conduct on the part of a legal practitioner, whether occurring before or after admission as a legal practitioner;

(c) neglect, or undue delay, in the course of legal practice;

(d) a contravention of this Act, the regulations or the rules; and

(e) conduct occurring in connection with legal practice that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.”

“Unprofessional conduct” was said to have be understood by judge-made law as:

“96 … conduct that would be reasonably regarded as disgraceful or dishonourable by a practitioner of good repute and competence, or conduct that, to a substantial degree, fell short of the standards of professional conduct observed or approved by members of the professiona of good repute and competence: Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 71 – 72 [61].”

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