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Lodging a civil complaint with the Legal Services Commissioner limits you to compensation of $25,000 per complaint

January 25th, 2011 · No Comments

First of all, happy new year!

The take-home point of this post is that if you lodge a civil complaint (e.g. a pecuniary loss dispute or a costs dispute) with the Legal Services Commissioner, you limit the amount of compensation you can get in VCAT to $25,000 because of s. 4.3.2(1)(c) of the Legal Profession Act, 2004. That prevents the commencement of proceedings in relation to the subject matter of the complaint until the complaint has been finally determined, or dismissed, by which time it will often be res judicata, at least in those cases where the final determination is by VCAT or the Supreme Court or the Court of Appeal (subject, perhaps, to (i) the operation of s. 4.2.14(2), which is what the Court of Appeal calls the ‘two bites of the cherry’ provision, and (ii) the possibility of adding a Fair Trading Act, 1999 cause of action to a proceeding originally instituted in VCAT under the Legal Profession Act, 2004, discussed below).  In this touchy feely win win alternative dispute resolution Civil Procedure Act, 2010 world, it is apparently anomalous that those who choose to travel to VCAT’s Legal Practice List via the obvious alternative dispute resolution channel (i.e. via a civil complaint to the Commissioner’s dispute resolution jurisdiction) are penalised so severely in comparison with those who proceed immediately to litigation in that List by invoking the parallel jurisdiction of the Fair Trading Act, 1999.In what is her first set of reasons in a Legal Practice List matter to be published on Austlii, VCAT member Julie Grainger has turned out a nicely written and compact set of reasons for dismissing the claim of an applicant who succeeded in establishing that their former solicitor had withdrawn their VCAT proceeding without his instruction.  The breaches of retainer caused no loss, and presumably the applicant did not think to seek nominal damages in contract, so the applicant got nought. In keeping with previous decisions of the Legal Practice List such as Wilkins v Johanssen Solicitors [2006] VCAT 2199, and Pentony and Richardson v Goodwin [2007] VCAT 1199, Member Grainger appeared willing to reduce the fees as a result of costs disclosure defaults, despite any explicit legislative mandate to do so under the Legal Profession Act, 2004 (cf contra s. 91 of the Legal Practice Act, 1996) but decided not to on the basis that the applicant would have proceeded in exactly the same fashion as he did had the disclosures been made properly.

What is more interesting about the decision is that, the applicants having lodged a civil complaint with the Legal Services Commissioner under the Legal Profession Act, 2004 before proceeding to VCAT, they were stymied in their ambition to proceed at VCAT under the Fair Trading Act, 2004 (and so stymied in attracting to VCAT jurisdiction to award compensation without limitation as to amount). They were forced to proceed under the Legal Profession Act, 2004 in which each applicant is not entitled to any more compensation than $25,000 in respect of each civil complaint.  That was so even though they had not sought to rely on the Legal Profession Act, 2004, and had relied exclusively on the Fair Trading Act, 1999.  Member Grainger relied on s. 4.3.2(1)(c) of the Legal Profession Act, 2004, which provides:

‘a complainant must not commence proceedings against a law practice or an Australian legal practitioner in relation to the subject- matter of a civil dispute with the practice or practitioner after the complainant has made a civil complaint about the conduct of the practice or practitioner in respect of the dispute- until the complaint is determined or dismissed and any appeal rights are exhausted.’

The decision is consistent with Mitchell v Swayn [2009] VCAT 2336 (see [14]).

It may be that the applicant’s mistake was to seek to proceed exclusively under the Fair Trading Act, 1999. It would be a harsh decision to deny an applicant in VCAT the full extent of its applicable jurisdictions under the two Acts if the claim under the Fair Trading Act, 1999 was simply added to the Legal Profession Act, 2004 claim.  Granted, that analysis relies on a distinction between the addition of a cause of action to an existing proceeding by amendment and the commencement of a proceeding, a distinction VCAT might not be willing to draw.

See also:

Tags: costs disclosure defaults · costs disputes · Fair Trading Act · Legal Practice Act · Legal Profession Act · Legal Services Commissioner · Professional fees and disbursements · VCAT