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Ombudsman carries out own-motion investigation of Legal Services Commissioner

September 22nd, 2009 · 3 Comments

A former client of mine, dissatisfied with the adverse outcome in a complaint he lodged making serious allegations against a senior member of the profession has tipped me off to an own motion investigation conducted into the Bureau de Spank by the Victorian Ombudsman.  The results, reproduced below, will not assist morale at the Bureau (compare his excoriation of the migration agents’ Bureau).  But solicitors can expect, I suppose, for the investigation process to become a bit more investigative than the gentlemanly exercise it has been as long as I can recall, and for more prosecutions to be brought.

In the hierarchy of regulators, I doubt that the Legal Services Commissioner is a particularly desirable post, but it should be.  Regulate the lawyers diligently, and the scope for all the others’ wrongdoing which the other regulators regulate is likely to be retarded.  It should also be desirable because it would be fun: the Commissioner doesn’t have to worry about the privilege against self-incrimination, and at least in complaints brought by former clients, can cruise past the usual irritant to pious investigators, legal professional privilege.  Imagine an investigation where you can gun for fines of $50,00o per offence, or the inherently spectacular thrill of seeing a lawyer fall from his perch with the wonderfully archaic fanfare of being struck from the rolls, but where you can essentially administer as many interrogatories as you like.  And imagine that default in answering the interrogatories is a crime the investigation of which is to be carried out by an investigator you personally get to choose in your capacity as head honcho of the Legal Service Board!  It should be enough to make an investigator pant with excitement.  Many a federal policewoman would probably give up her taser in exchange for these kinds of powers.

The statistics I report from time to time in the Bureau’s annual reports speak for themselves. Few complaints result in any outcome other than dismissal.  If I were the government, I would appoint a former director of public prosecutions as the new Ombudsman, or an aspirant for that job who missed out.  I would get a few ASIC and ACCC chiefs in and conduct a few oral examinations (might have to tweak the Act a bit…).  That would get things going.  In my humble opinion, the last thing the Commissioner’s office needs is more community outreach or more community representatives.  They will just get trampled over.  It needs cops, man. Cops!

Only when there is a law of legal ethics which is readily available, easily understood, and predictably applied, will lawyers uniformly play by the rules.  This should be a key aim of the national model now being worked on.  Many are the times when I have taken statements from clients over my career, tried to play by what I understand the no-coaching rules to be, and worried that I was putting my client at a disadvantage because my opponent may be playing by a different understanding of the rule, or not playing by them at all.  Hardly any rule could be more fundamental to the ascertainment of truth, and therefore the attainment of justice than the rule about coaching witnesses, but there is no bright line about where witness preparation and witness coaching begins and ends.  My impression is that judges assume that full compliance with what they understand the rules to be is an exceptional case.  Why else would they rail so at the obviously convenient adduction of evidence in chief by affidavits, and demand increasingly that litigants give their evidence viva voce?  Why on earth is there not a video of 12 mock client interviews with the line drawn between the 6 non-infringing and the 6 infringing interviews, which every lawyer must watch online?  Education such as this could be part of the online application for a practising certificate each year.

I hear the Bar is considering an ethics exam for entry into the Bar Readers’ Course as well as entry into that half of the profession which practises as barristers.  A former judge is leading the charge.  Judging how many people congratulated me on going to the Bar, and then on completing the Bar Readers’ Course, I suspect that the general impression is that there is an exam or two between becoming a solicitor and becoming a barrister.

Here’s what the Ombudsman said about the Bureau in this latest annual report:

Legal Services Commissioner
The Legal Profession Act 2004 established the office of the Legal Services Commissioner and lists its objectives, one of which is:

to ensure that complaints against Australian legal practitioners and disputes between law practices or Australian legal practitioners and clients are dealt with in a timely and effective manner [s. 6.3.2].

The role of the Legal Services Commissioner is to protect both consumers of legal services and the public interest in the proper administration of justice. The Legal Services Commissioner has the power to address complaints made against Victorian legal practitioners to ensure that they acted within the confines of the law, with appropriate ethical standards and with deference to their professional position.

The Legal Services Commissioner can receive complaints which relate to disputes about legal costs, claims of up to $25,000, or disciplinary matters. The legal system can be financially costly and the law can be complex, with intricacies which many members of the public find difficult to navigate and understand. This can leave the public vulnerable to unscrupulous, negligent or unprofessional practices of legal practitioners.

Over the past year I received 95 complaints about the Legal Services Commissioner, which replaced the former Legal Ombudsman in December 2005. There were recurring themes in the complaints which pointed to a systemic failure by the Legal Services Commissioner to adequately undertake its statutory role. For example, complainants alleged that:

• complaints were inadequately investigated or not investigated at all
• there were significant delays – sometimes in excess of three years – in finalising complaints
• documentation practices were poor and failed to provide complainants with information about the Legal Services Commissioner’s internal review process and external review mechanisms investigations lacked procedural fairness.

The following case study highlights that the lack of appropriate review powers in place for the Legal Services Commissioner is still the case. It illustrates how this can result in injustice to complainants and allow practitioners to avoid detection and/or prosecution as a consequence of the current legislative framework. I recommended that the Attorney-General consider amending the Legal Profession Act 2004 to enable the Legal Services Commissioner to review its merits-based decisions where there have been deficiencies in its investigations or errors in its decisions.

I understand that this is being considered as part of a national reform of the Australian legal profession announced by the Council of Australian Governments.

Lack of appropriate review powers
The complainant required life-saving medical treatment and so his legal practitioner referred him to a mortgage broker, who sourced a short-term loan. Because the complainant was overseas his brother signed the contract, which contained different terms and conditions from the original agreement.

When the complainant defaulted on the loan the mortgage company sued. In this case the legal practitioner, who formerly represented the complainant, also represented the mortgage company.

The complainant contacted the Legal Services Commissioner (LSC) and maintained that the legal practitioner had a conflict of interest. He also complained that the legal practitioner failed to follow his instructions and advise him properly. The LSC dismissed the complaint because of insufficient evidence.

I investigated the complaint and established that the LSC did not interview the complainant, his brother or the legal practitioner. Although the LSC requested documents from the practitioner, it failed to exercise its powers to obtain the documents when they were not supplied. Instead of gaining access to documents which may have provided evidence, the LSC relied solely on the legal practitioner’s assertions.

Outcome
I asked the LSC to seek legal advice on whether the case could be re-opened. The advice identified that the solicitor ‘acted for both financier and borrower contrary to rules 10.2 and 10.6 [Professional Conduct and Practice Rules 2000]’; that the solicitor ‘failed to protect his client’s interests’ and ‘acted in a potential conflict of interest’.

The deficiencies in the LSC investigation and errors in the final decision drew into question the merits of the decision. However, the legal advice indicated that the legality of the decision was not brought into question because the LSC had followed the legal procedures set out in its governing legislation, the Legal Profession Act 2004.

The advice concluded that deficiencies in an LSC investigation or an error in its decision (which may have been caused by the deficiencies in its investigation) cannot be classed as a ’legal’ error but is an error that goes to the merits of the complaint (‘merits’ error). A merits error does not give the LSC the power to re-open a discipline complaint. This is unsatisfactory. Complainants should be entitled to reviews of deficient investigations or erroneous decisions. I have recommended to the Attorney-General that he amend the Legal Profession Act 2004 to allow the LSC to re-open a case where there has been a merits error.

I note that since this recommendation the Council of Australian Governments (COAG) announced that it had devised a plan to achieve a national regulation for the Australian legal profession and any proposed changes to the Legal Profession Act (including complaint-handling and professional discipline) will be considered as part of this process.

I also conducted an own motion investigation into the Legal Services  Commissioner and its decision-making processes under section 14 of the Ombudsman Act because of the number of complaints I had received. My investigation identified a lack of understanding by staff of the Legal Services Commissioner’s statutory powers and a restricted skills-set to conduct investigations. The Legal Services Commissioner’s investigators showed limited knowledge of the basic techniques of investigative processes. Case files lacked:

• investigation plans
• thorough and professional approaches to gathering evidence
• follow-up on serious allegations
• substantiating documents such as practitioners’ files
• timely conclusions
• verification of practitioners’ responses
• reasons for decisions.

I made 28 recommendations to the Legal Services Commissioner and am pleased to note that it has taken steps to address a number of problems identified in my own motion investigation. I intend to review the Legal Services Commissioner’s implementation of my recommendations over the next year. I also referred the report of my investigation to the Attorney-General for his information, particularly in relation to the inability of the Legal Services Commissioner to re-open cases on the basis of merits.’

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Tags: Client Legal Privilege · Discipline · Judges · Legal Profession Act · Legal Services Commissioner · Professional regulation