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Gross overcharging penalties surveyed

In Legal Profession Complaints Committee v PJO’H [2011] WASAT 95 (S), delivered on 20 February 2012 and not yet on Austlii, the Tribunal helpfully reviewed the penalties awarded in the gross overcharging cases over the years before suspending the respondent from practice for 6 months (the Committee wanted 18).  Two other things are notable about the case.  First, the Complaints Committee’s costs of the matter were $134,000 and were described as reasonable.  Second, the practitioner drafted his character witnesses’ evidence himself.  Didn’t go down well.  The decision was the work of a tribunal of three presided over by Justice Cheney.  Here’s the Tribunal’s survey:

‘In Re Veron; Ex parte Law Society (NSW) [1966] 84 WN (Pt 1) (NSW) 136, the practitioner was struck off following findings of some 65 instances of overcharging clients in respect of personal injury actions. The overcharging was found to be deliberate and there were related charges proved against the practitioner involving dishonesty or fraud in respect to the practitioner’s dealings with his clients and their money. Continue reading “Gross overcharging penalties surveyed”

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Ron Baker: Firms of the Future

An American by the name of Ron Baker is coming to town. I am certain I have never seen a mission statement with such a resolutely split infinitive as Baker’s: ‘To, once and for all, bury the billable hour and timesheet in the professions.’  He is a leading exponent of ‘value pricing’, who’s moved out of the accounting world whence he hails into the legal arena.  He has written what are said to be some of the best books on the subject.

Our foremost indigenous enthusiast for the same philosophy, John Chisholm, is quite the disciple, and is helping to publicise Baker’s ‘Firms of the Future’ forums which will feature value pricing heavily, but will predict other aspects of best firm practice.  At this point in my journey towards understanding what Baker’s on about, it is easier to point to what value pricing is not.  As the mission statement suggests, it is not recording time on timesheets and then arriving at a charge by reference to the hourly rates of the fee earners.  It is agreeing a price for the work at the start, and it involves moving away from arriving at that price principally by reference to the time it is going to take.  Baker is speaking for a day in Melbourne on 5 March 2012 — I’ll be going, briefs permitting — and conducting a half day masterclass at the MCG the following day. (Hobart = 2nd, Brisbane = 12th, Sydney = 15th).  To go, you have to pay $1,628, or $935 for just the talk or $880 for just the masterclass, but if you’re not completely satisfied, you can ask for a refund of the difference between what you paid and what you think it was worth, a version of value pricing I suppose.

 

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Important new case on when retainer by multiple clients will be taken to be several rather than joint

I have always been a bit dubious about the proposition to be found in the texts that in the absence of specification one way or the other, a multiple retainer is presumed to be a several retainer (so that the clients are severally responsible for their fair share of the costs) rather than a joint retainer (so that the clients are each responsible for the whole of the costs associated with acting for either or both).  The South Australian Supreme Court has gone through the authorities and said that there is no presumption, but the onus of proving a joint retainer falls on the solicitor, and the mere fact that joint instructions are given or that representation advances joint interests is not sufficient to found an inferred agreement to that effect: D A Starke Pty Ltd v Yard [2012] SASC 19.

So: if you’re one of several clients your lawyer has in relation to one matter, and you want to limit your liability to your fair share of the costs, you should stipulate for ‘several liability’, and if you’re a lawyer, and want to be able to recover all of the costs from each client, you should stipulate for ‘joint and several liability’.  And if you’re one of a number of clients against whom a lawyer is seeking to recover fees, wherever the written costs agreement is silent on the question, then so long as you believe that it was not actually agreed between you, albeit by implication rather than express communication, you should not agree to pay anything more than your fair share, which might be 50% if the work benefitted each of the clients equally (as where husband and wife conduct litigation over jointly owned matrimonial property) but which might be quite different from the other client’s/s’ faire share, as in this case.

Two things occur to me.  First, in a joint retainer, one client may well be an associated third party payer vis-a-vis the lawyer in respect of that client’s promise to pay the other client’s fair share of the lawyer’s fees.  I cannot immediately think of how this might affect the solicitor-client relation, but no doubt it might.  Secondly, in a regime such as that under the Legal Profession Acts where costs agreements must be written or evidenced in writing, all the major terms of the agreement are required to fulfil that requirement.  This case was decided by reference to the law of the one state which does not have a Legal Profession Act (South Australia).  A lawyer seeking to rely on an implied term (and therefore one very likely not evidenced in writing) might have difficulty in establishing such a term by virtue of the writing requirements.

What the Supreme Court of South Australia’s Justice Kourakis said on this subject is set out below:

Continue reading “Important new case on when retainer by multiple clients will be taken to be several rather than joint”

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It’s a new Victorian barrister blog a minute

Hardly news any more, but Carrie-Rome Sievers is the latest Victorian barrister bitten by the blog bug. Her blog (carrieromesievers.wordpress.com) covers insolvency and the Personal Property Securities regime.  And it turns out Carrie’s husband Chris Sievers, also a Victorian barrister, has a blog on GST (http://chrissievers.wordpress.com) with vast resources in the form of scores of case notes, and links to commentary on the GST. Welcome to the blogosphere Carrie and Chris.

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Accord and satisfaction as a defence to a suit for taxation

[Edited and updated 13.2.12] I have two taxations at the moment where accord and satisfaction is pleaded as a defence, in proceedings governed by the Legal Profession Act 2004 (Vic).  In the first, the client and the solicitor cut a deal in relation to costs, and the client subsequently sought to tax the costs.  In the second, a non-associated third party payer and the client cut a deal in relation to the amount the former was obliged to pay the latter pursuant to a loan agreement, and the third party payer has now brought an application against the client’s solicitors for taxation.

Accord and satisfaction is a litigation estoppel.  It serves a similar function to res judicata where the original dispute is quelled by contractual agreement (i.e. a ‘settlement’) rather than by judicial determination. It is what stops a party who settles a pre-litigious dispute from suing on it, and, depending on how the proceeding is disposed of (withdrawn, discontinued, struck out, dismissed, judgment for one party), may also be what stops a party to litigation who settles it from re-instituting it (res judicata flowing from the Court’s orders disposing of the proceeding is the other possibility).

Helpfully, the NSW Court of Appeal recently drew the authorities on accord and satisfaction together in El-Mir v Risk [2005] NSWCA 215 and provided a cute little restatement of the law, which is reproduced below.  There seems to be little authority on accord and satisfaction preventing taxation where disputes in relation to the quantification of liability for legal fees are settled before the institution of taxation proceedings. Certainly, the US Court of Appeals for the Third Circuit had no difficulty with the application of accord and satisfaction as a bar to taxation: Michael J Benenson Associates, Inc v Orthopedic Network of New Jersey 2002 U.S. App. LEXIS 23559; 54 Fed. Appx. 33, and the Federal Court seems to have assumed the possibility in Amos v Monsour Pty Ltd (formerly Monsour Legal Costs Pty Ltd) [2010] FCA 741, but in neither case was the question argued. Does anyone know of any other useful authorities? Continue reading “Accord and satisfaction as a defence to a suit for taxation”