A decision of Senior Member Howell on 31 August 2007 has only just hit the screens: Legal Services Commissioner v IDE [2007] VCAT 2244. A solicitor of 32 years’ standing let a file fester in the too hard basket for too long and then ‘buried his head in the sand’ when the Bureau sent over a ‘please explain’. A clinical psychologist’s report said he had a tendency towards denial. He was remorseful. He did not self-represent. On the other hand, he had been found guilty of delay by a Bureau before. The result: 2 findings of misconduct, a reprimand, a little fine of just $500, plus costs in the order of $2,750, $800 odd of which were costs which the solicitor volunteered to pay the complainant, who had travelled from South Australia. It was said that his demotion from partner of a country firm to employee solicitor was the result of the charge, and so the solicitor had already suffered considerably. Unfortunately, the reasons do not reveal how long the period in which the Bureau was ignored for was.
Solicitor gets away with fees of $83,000 after estimating at $2,500 and never updating
Ok, ok, that’s a bit of an exaggeration, but the solicitor did put out a costs agreement and fee disclosure document which contained no estimate other than $2,500, and did charge $111,000, which was reduced on an assessment — a NSW privatised version of taxation — and did not provide any re-estimates before putting out the first bill for $88,000. Savings Factory Pty Ltd v Daniel [2007] NSWSC 1343 is a useful case to illustrate that failure to comply with costs disclosure regimes is not the end of the world for lawyers. You just have to get the costs taxed at your expense. Justice Palmer held that the estimate was just an estimate, and was confined to one part of the work which was to be the subject of the retainer (no estimates were provided in respect of the other work). Here, the client maintained the solicitor’s retainer long after receiving the initial bill.
The case also illustrates another principle which you would think lawyers would get fairly readily, but which, sadly, we don’t. It is that you can’t just put your rates up whenever you feel like it. One reason why about 20% was taxed off the bills was that the lawyer’s rates were allowed only at the rate originally provided for under the costs agreement.
NSW judge refuses to admit affidavit adopting contents of another’s affidavit
I provided my 25 handy hints on affidavits earlier. Two of them were:
- it is undesirable for one deponent to refer to another’s affidavit and effectively incorporate it by reference; much better to reiterate the whole story in the second witness’s own words;
- a few inconsistencies between affidavits enhance their credibility rather than detract from it — you can get all your ducks in an implausibly neat line, in other words: see Timms v Commonwealth Bank of Australia [2001] NSWSC 560 at [69]ff by way of example;
Now it could probably only happen in NSW where they get very excited about the rules relating to affidavits (I do not say that disparagingly, au contraire), but in Singh v Singh [2007] NSWSC 1357, one Justice Barrett yesterday actually refused to admit into evidence the following statement in affidavits of Mr Singh, Mr Singh, and Mr Singh: “I agree with the contents of his [another Mr Singh’s] affidavit”. (Tragically, his Honour missed the pun about sikhing too enthusiastically to singh from the same songbook.)
Evidence is supposed to be comprised exclusively of facts from the witness’s own knowledge, and opinion which the witness is qualified to give, and it is generally impermissible to give oral evidence about the contents of a document. Since an affidavit stands in substitution for oral evidence at trial, the rule applies equally to affidavits. Either the statement in the affidavits of the three Messrs Singh offended these rules, or they were irrelevant. I will not bother trying to condense the judgment, which is fairly to-the-point. So here it is, word for word: Continue reading “NSW judge refuses to admit affidavit adopting contents of another’s affidavit”
Appeal succeeds in Lawcover indemnity dispute with entrepeneurial solicitor
I posted about Swart v Carr here and here. It is a decision about whether a solicitor’s liability for certain entrepeneurial activities undertaken by him ‘was incurred “in connection with” “the business of practising as a solicitor”. The trial judge answered affirmatively. Now Justice Palmer’s decision has been reversed by the New South Wales Court of Appeal, in a decision about which professional indemnity insurers of lawyers will be relieved: Carr v Swart [2007] NSWCA 337.
On the way through, the solicitor served a creditor’s statutory demand on Lawcover, and Lawcover succeeded in having it set aside. The decision ([2007] NSWSC 306) might conceivably be a useful illustration of the nature of the rights and obligations of a claimant, insured and insurer, but I have not read it.
Director of company counterclaiming for negligence in professional fees claim pays costs personally
In Chantrey Vellacott v The Convergence Group PLC [2007] EWHC 1774 (Ch) chartered accountants sued their former client for a quarter of a million pounds sterling in fees. They were met with one of those absurd counterclaims which such suits often generate, for negligence, claiming 115 million pounds sterling in damages. The defendant and counter-claimant’s director was ordered to pay the accountants’ costs of the claim and counterclaim personally. Latham & Watkins’s note of the case says:
‘Rimer J found that Mr Robinson was the real party to the litigation and had been “personally responsible for the prosecution of a false and dishonest case”. He had prevented Chantrey from obtaining security for costs and had assisted the funding of the litigation personally and through other companies within his control. Rimer J also found that had the counterclaim been successful the ultimate benefit would have passed, via a family trust, to Mr Robinson.’
The latest English cases on non-party costs orders in England mentioned are: Continue reading “Director of company counterclaiming for negligence in professional fees claim pays costs personally”
Yet another corporate counsel privilege case; the US position.
Even though legal professional privilege, duties of confidentiality, and other evidentiary privileges are something I try to keep up with, and though I have just advised a litigation funder on the subject, I would be challenged by an urgent brief to argue the privilege of a communication between in-house counsel and a staff member or officer of his or her corporate employer. There are just so many single-judge cases and so few appellate cases, and I’m not sure they all stitch together too well. The latest is Telstra Corporation Limited v. Minister for Communications, Information Technology and the Arts (No.2) [2007] FCA 1445, and Cutler Hughes & Harris’s note on it is here. Telstra’s resistance to the other side inspecting certain documents failed for want of evidence as to the independence of the relevant in-house counsel.
The law on the question has recently been summarised in the US in In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d 789 (E.D. La. 2007). Hogan & Hartson’s note on the decision, well worth reading, is here.
Auditors’ liability for failure to ‘blow whistle’ on fraud
English firm CMS Cameron McKenna has published a case note on Case Stone & Rolls Limited (in liquidation) v. Moore Stephens (a firm) [2007] EWHC 1826 (Comm). It is a decision which considers the rule ex turpi causa non oritur actio in the context of a professional liability claim, in this case to a claim of liability in a professional whose task was to prevent fraud. The rule says no cause of action can be founded on illegality or immorality in the plaintiff. The case note begins:
‘In an important decision, the [English] Commercial Court considered whether or not a company which had perpetrated a fraud could claim against its auditors for failing to detect and report that fraud. Even though this involved the company relying on its own fraud, the Court nevertheless held that it could continue with its claim against the auditors. This was, according to the Court, because the fraud was “the very thing” that the auditors were under a duty to identify, and the “ordinary citizen” would not find anything repugnant in allowing the company to make a recovery in such circumstances.’
Misconduct constituted by ignoring the Bureau
In the last post, a solicitor ignored the Bureau de Spank for 3 months, a default explicable by personal circumstances and depression during the relevant period. In Legal Services Commissioner v JEH [2007] VCAT 2181 (27 September 2007), a Warragul solicitor ignored the Commissioner for almost 6 months. The reasons are broad-brush in their approach to the nature of the plea, but it sounds like the excuses were more diffuse and less tied down to the relevant period of the default than those in the previous case, so Member Howell made a finding of misconduct. The reasons’ characterisation of the self-represented plea was:
‘7 [the solicitor] gave evidence about events of a stressful nature that have arisen in his practice, and in his personal life, during the last 15 years. I have no reason to doubt his evidence, and his evidence caused me to have considerable sympathy for him, but the events about which he gave evidence do not excuse him from providing to the Commissioner a full written explanation of his conduct.’
To add to the confusion about the difference betweeen misconduct and unsatisfactory professional conduct under the new Act, however, exactly the same penalty was meted out as in the previous case: a $1,000 fine and costs, fixed at $2,352, but without the reprimand.
The solicitor might have pointed to s. 4.2.8 of the Legal Profession Act, 2004 in the context of the fact that the Commissioner did not even publish the complaint to him for a month after receiving it, and said something about the pot calling the kettle black, but unrepresented though he was, I infer from the reasons that he restrained himself, probably quite sensibly. That section says: Continue reading “Misconduct constituted by ignoring the Bureau”
How to distinguish between unsatisfactory professional conduct and professional misconduct under the new Act
The definitions of the greater and lesser disciplinary offences under the Legal Practice Act, 1996 and the new Legal Profession Act, 2004 are different. Under the old act, the one was distinguished from the other by the absence or presence or wilful contravention of norms, or recklessness as to whether conduct would contravene norms. No longer. But in Legal Services Commissioner v SM [2007] VCAT 2117, Member Butcher held that intent is still a useful guide in distinguishing between the two. In that case, a 47 year old sole practitioner sought to explain a 3 month delay in responding to a demand by the Legal Services Commissioner for a written explanation of conduct a former client had complained about, and succeded in having his conduct characterised as the lesser rather than the greater species of disciplinary offence. He was fined $1,000 and ordered to pay costs of $2,165. How the costs were calculated is once again intriguing, since a salaried employee of the Commissioner appeared on her behalf. The plea went like this: Continue reading “How to distinguish between unsatisfactory professional conduct and professional misconduct under the new Act”
Rule against charging for storing old client files
Update, 15 January 2008: Senior Member Howell decided costs and penalty on 17 December 2007: [2007] VCAT 2465. The Commissioner sought an injunction to restrain the solicitor from repeating the conduct. Unnecessary, said Mr Howell, who refused to make any such order. Now that the solicitor has had the law clarified, as he was entitled to do, it is inconceivable that he will fall foul of it again. Similarly, Mr Howell declined to reprimand the solicitor. But he did slot him for costs agreed by the parties at $6,700.
Original post: On 12 October 2007, Senior Member Howell found a solicitor guilty of the lesser disciplinary offence of unsatisfactory professional conduct, in the case of Legal Services Commissioner v JR [2007] VCAT 2180. The solicitor’s practice had charged $55 in response to a request by solicitors for an executor for the deceased’s will which was held by the solicitor. The Legal Services Commissioner prosecuted him for breach of rule 37 of the Victorian Solicitors’ Professional Conduct and Practice Rules 2003, which is reproduced below, and says you can only charge storage or retrieval fees by express agreement with a client. Costs and penalty remain to be determined in another hearing. Mr Howell said: Continue reading “Rule against charging for storing old client files”
Latest proportionate liability decision
Here’s the latest proportionate liability case, from the Supreme Court of Victoria’s Justice Hargreaves: Atkins v Interprac Financial Planning Pty Ltd [2007] VSC 445, decided just today.
NSW Law Society goes down and pays costs in unqualified practice case
In The Law Society of New South Wales v Spring [2007] NSWSC 1273, the Supreme Court of NSW referred to one of the defendants as ‘Lolly Pops’. Its principal was another defendant, Mr Spring. He was a retail leases specialist and helped people with retail lease problems, and represented them in statutory tribunals where advocacy was not the preserve of lawyers. The Law Society sought injunctions against him continuing to do what he does, saying he was engaging in legal practice though unqualified to do so. Justice Barr found for Lolly Pops, and ordered that the Law Society pay its costs. This is the case to read if your unqualified practice matter involves non-lawyer advocates in statutory tribunals.
English Legal Services Act gets royal assent; patnerships of barristers contemplated
The English Legal Services Act (see this earlier post) has received Royal Assent. They’re looking for a non-lawyer to be the new Chairman of the Legal Services Board. The Times reports: Continue reading “English Legal Services Act gets royal assent; patnerships of barristers contemplated”
Father instructs lawyer as daughter’s agent then daughter sues him: whose privilege?
Here’s a weird old privilege case: Sugden v Sugden [2007] NSWCA 312. A minor from Orange in rural NSW suffered bad injuries in a car crash while she was driving. She was on L plates and her father was supervising. Since she was all banged up and in the Royal North Shore Hospital in Sydney, her father went to the local solicitor in Orange and gave a statement with a view to getting advice as to who was responsible for compensating her for her injuries. Turns out, he was the one to blame, so the daughter sued him. He and the daughter’s solicitor had stopped communicating after a while, of course, but there were the communications beforehand. Needless to say the only reason the daughter was suing her father was that her father had liability insurance. The insurer obviously wanted a copy of the father’s statement. The President of the NSW Court of Appeal and Justices Ipp and McDougall JJ said they couldn’t have it because it was privileged and the owner of the privilege was the father, who had been acting as his daughter’s agent. The analysis was under the uniform evidence legislation which does not apply in Victoria except in the Federal and Family Courts etc. exercising federal jurisdiction.
The US position on legal professional privilege for in-house counsel communications
Here’s the state of the law in the US on the vexed issue of whether companies can assert legal professional privilege (aka client legal privilege) for the advice of employed lawyers (aka in-house counsel). It discusses the case of In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d 789 (E.D. La. 2007)
More on the Home Office v Harman implied undertaking in relation to litigation documents
In a case in which a company is a party, the company gives an implied undertaking to the Court to use documents obtained through litigation compulsion — discovery, subpoena, call for production, etc. — only for the purposes of the proceeding, at least until they come into the public domain, for example by being adduced into evidence at a public trial (see previous posts on the subject here). Street v Hearne [2007] NSWCA 113 is a long decision of the NSW Court of Appeal which discusses whether officers of such a company may themselves be dealt with for contempt if they use documents otherwise than for the purposes of the litigation. The Court said they could. Ipp JA went further, and said:
‘The rule applies to all persons into whose hand the discovered documents come, if they know that the documents were obtained by way of discovery or other compulsory Court process. The Court should not allow such persons to use those documents for purposes other than those for which they have been disclosed.’
And ignorance of the law is no defence.
ABC Radio National’s Law Report on ‘Lawyers Going AWOL’
Today’s Law Report is a panel discussion set up by its presenter, Damien Carrick, at a recent conference of legal regulators in Brisbane. There is a hypothetical about a sole practitioner who goes off the rails, and there’s discussion about the inexplicable controversy over Dr Haneef’s barrister Stephen Keim SC’s provision of his client’s transcript of interview to the media, and the varying responses of the Queensland Law Society and its Bar Association. There is talk too of Peter Faris. Dr Christine Parker, a Melbourne University academic and co-author with Professor Adrian Evans of Inside Lawyers’ Ethics (Cambridge University Press, 2007), makes the same observation I made on this blog:
‘it’s very strange to me that the Bar should be saying that they’re investigating something; surely they should be making a complaint to the Commissioner, because it’s the Commissioner in Victoria who is supposed to receive complaints and then decide who is going to investigate them, and for them to be saying that publicly seems very odd.’
Mind you, I’m not sure that the Bar is saying that. Seems to me everyone else is talking about an investigation by the Bar. And it’s not clear to me whether the Bar is still considering the issues now that Mr Faris is no longer a member.
Queensland’s rule 60 (and 61 for good measure):
‘Integrity of hearings
60. (a) A barrister must not publish or assist the publishing of material concerning a current proceeding except by supplying only:
(i) copies of pleadings or court documents in their current form, which have been filed and which have been served in accordance with the court’s requirements;
(ii) copies of affidavits or witness statements, which have been read, tendered or verified in open court, clearly marked so as to show any parts which have not been read, tendered or verified or which have been disallowed on objection;
(iii) copies of transcript of evidence given in open court, if permitted by copyright and clearly marked so as to show any corrections agreed by the other parties or directed by the court;
(iv) copies of exhibits admitted in open court and without restriction on access;
(v) answers to unsolicited questions concerning the current proceeding and the answers are limited to information as to the identity of the parties or of any witness already called, the nature of the issues in the case, the nature of the orders made or judgment given including any reasons given by the court and the client’s sintentions as to any further steps in the case;
(vi) copies of submissions used in open Court and available to the parties, provided that where the barrister is engaged in the current proceeding, the barrister does so only with the consent of the client first obtained.
(b) Subject to sub rule (a), a barrister must not publish or take any step towards the publication of any material concerning any current or potential proceeding which –
(i) is inaccurate;
(ii) discloses any confidential information;
(iii) appears to or does express the opinion of the barrister on the merits of the current or potential proceeding or on any issue arising in the proceeding, other than in the course of genuine educational or academic discussion on matters of law.
61. A barrister will not have breached Rule 60 simply by advising the client about whom there has been published a report relating to the case, and who has sought the barrister’s advice in
relation to that report, that the client may take appropriate steps to present the client’s own
position for publication. ‘
Morwell solicitor to pay $5,500 for ignoring Bureau de Spank
A Morwell solicitor has been ordered to pay a fine of $3,000 and costs of almost $2,500 for ignoring the Legal Services Commissioner’s demands under the Legal Profession Act, 2004 power resident in her to compel written explanations of conduct the subject of a complaint and to compel the production of documents — in this case, the file in relation to the matter which was the subject of the complaint. The case is Legal Services Commissioner v NT [2007] VCAT 1987. I was down at the Tribunal that day for a matter in which I was briefed in the Legal Practice List. When that was over, I popped in to watch this matter at random. The solicitor had not showed up, and the advocate was leading a winsome witness from the Commissioner’s office through her evidence. Turns out that the advocate was a staff member of the Commissioner’s office. The Commissioner is absolutely to be commended for keeping costs down in this way. If the police can prosecute complex crimes in the Magistrates’ Court, there is no reason why the Bureau should not have an in-house advocate — or a member of the Bar on retainer — to do simple prosecutions. How the costs of $2,500 odd were arrived at is a different and interesting question, but I cannot comment on that since it does not appear from the reasons. Continue reading “Morwell solicitor to pay $5,500 for ignoring Bureau de Spank”
Settlement offers aren’t confidential after all if one party sues their solicitor
Update, 14 November: here’s an English firm’s note about Vaseghi and another case involving without prejudice privilege in an employment dispute context.
Original post: You don’t often see cases about waiver of without prejudice privilege, whereas forests fall at an alarming rate in relation to nice questions like whether ‘fairness’ or ‘inconsistency’ is the right touchstone for imputed waiver of legal professional privilege. Here’s one, though, from the English Court of Appeal: Vaseghi v Brunel University [2007] EWCA Civ 482. I have reproduced below the little precis of the law of negotiation privilege in the judgment, which emphasises that the privilege is a joint privilege ‘owned’ by each party to the communication and cannot be unilaterally waived by one party. Meanwhile, VCAT’s Senior Member Vassie has allowed evidence to be tendered in a professional negligence claim of what went on in a mediation in the underlying litigation, at the instance of one participant (who was suing his lawyer) without the consent of the other participant: Louis v G&O’B [2007] VCAT 1997 refusing to follow an earlier decision dead on point of a fellow Senior Member. Continue reading “Settlement offers aren’t confidential after all if one party sues their solicitor”
Former Marsdens partner struck off the roll of solicitors in NSW
Here’s a decision from the NSW Court of Appeal, apparently exercising original jurisdiction, in which a former partner of Marsdens in Campbellfield was struck off the roll by consent for receiving secret commissions of $180,000 amongst other things, including deceiving the investigation into that conduct: Prothonotary of the Supreme Court of NSW v Alcorn [2007] NSWCA 288. The analysis of whether the solicitor was a fit and proper person was as follows: Continue reading “Former Marsdens partner struck off the roll of solicitors in NSW”