The Legal Services Commissioner’s office and its predecessors have apparently long taken the view that the obligation in s. 86 of the Legal Practice Act, 1996 to provide certain costs disclosures to clients at the time of retainer is imposed on the solicitor with responsibility for the file regardless of whether or not the retainer is with them personally, with a firm of which they are a member, or with a company of which they are a director. The Law Institute had a go at a solicitor on this basis in 1992 and 1999: Victorian Lawyers RPA Ltd v Vernon, unreported T0070 of 2002, 17 May 2002, Registrar Howell and Victorian Lawyers RPA Ltd v GAVS  VLPT 4. Those attempts failed, but not squarely on the basis that the charges were incompetent for having been brought against the wrong person. Now the question has been fully argued and decided contrary to the Commissioner’s position. According to VCAT, the obligation was prima facie imposed exclusively on the retained entity. In the case of incorporated legal practitioners, there were such provisions under the 1996 Act attributing liability to directors, but not non-director employees. Quite amazing really that this point was first squarely decided 15 years into the 1996 Act’s operation.The section said:
86. What information must be given to a client?
(1) Before being retained by a client to provide legal services or as soon as practicable after being retained, a legal practitioner or firm must give the prospective client or client a concise written statement setting out—
(a) details of the method of costing the legal services, billing intervals and arrangements; and
(b) the client’s right to—
(i) negotiate a costs agreement with the legal practitioner or firm; and
(ii) receive a bill of costs from the practitioner or firm; and
(iii) request an itemised bill within 30 days after receipt of a lump sum bill.
Under the 1996 Act, entities other than individuals within the definition of ‘legal practitioner’ (such as incorporated practitioners) and firms could be charged with disciplinary offences (see, for example, Legal Ombudsman v DB & Co Pty  VLPT 6). VCAT essentially found that the use of the words ‘a legal practitioner or firm’ was intended to cover the class of entities which may be retained by a client. It was not intended to mean that any legal practitioner with an association with a matter may be prosecuted for breach of s. 86. Otherwise, an employee lawyer in the Perth office might engage in unsatisfactory conduct in relation to a file she knew nothing about being handled by a Melbourne partner, or a barrister might be made liable for the non-disclosure of the solicitor’s costs. Absurd examples, you might say. But where is the line to be drawn? What if a number of practitioners have the day to day conduct of the matter? What if the supervising partner told the employee solicitors that costs issues were all taken care of, or no business of the file handler?