Ok, so the High Court is still ruminating after the recent hearing of an appeal from Jackson Lalic Lawyers Pty Ltd v Attwells  NSWCA 335 in which the immunity was again challenged. And advocates’ immunity was probably already abolished in certain respects in Victoria by the Civil Procedure Act 2010, s. 29 of which gives anyone who suffers loss as a result of a lawyer’s breach of the overarching obligations in litigation a right to seek compensation from the court (but not VCAT) in which the case was conducted. But I just noticed something else not mentioned in any of the submissions, and about which I have heard not the faintest whisper of chatter more generally. Chapter 5 of the new uniform legislation in force in Victoria and NSW allows compensation orders to be made for professional negligence and appears to abrogate advocates’ immunity in relation to those kinds of claims. Section 263(1) of the Legal Profession Uniform Law, which has been in operation in Victoria and NSW since 1 July 2015, says:
‘A provision of this Law or any other applicable law that protects a person from any action, liability, claim or demand in connection with any conduct of the person does not affect the application of this Chapter to the person in respect of the conduct.’
Advocates’ immunity is, axiomatically, a law that protects lawyers from actions in connection with their conduct in litigation. But that law ‘does not affect the application of’ only Chapter 5 of the Uniform Law. How, I hear you ask, do you get damages for professional negligence under Chapter 5 of the Legal Profession Uniform Law? The possibilities in Victoria and NSW are twofold: lodge with the local Legal Services Commissioner a complaint about a disciplinary matter or lodge a complaint about a consumer matter (or both: s. 271), and seek compensation. The first is the most orthodox, and sanctioned route. But you might not be able to convince the Commissioner to deal with your complaint as a consumer matter until his office acquires a taste for this new power. If you cannot, you may be able to force the Commissioner to deal with it as a disciplinary matter, and seek a compensation order, with costs, in any prosecution which ensues.
If the Commissioner can be convinced to treat the complaint as a consumer matter (see s. 269(1)), he can investigate it using extraordinary powers hitherto available to him only in disciplinary prosecutions. Where the circumstances justify it, he can bust down the doors of a law firm, download the contents of the hard disk, and interrogate anyone on the premises about anything on pain of criminal prosecution if they do not comply, ignoring legal professional privilege all the way. All that without a warrant. See LPUL, chapter 7.
The determination of small professional negligence claims is not a new jurisdiction. In Victoria, the Legal Profession Tribunal used to hear small civil disputes between lawyers and clients. The Tribunal even used to provide Counsel Assisting the Tribunal who would assist unrepresented claimants. Then, under the Legal Profession Act 2004 (Vic) such disputes were heard by VCAT’s Legal Practice List (albeit surprisingly infrequently). That jurisdiction of VCAT has been substituted by the Commissioner’s decision making jurisdiction now. In neither former regime was privilege abrogated and at the beginning of my career, on behalf of Victorian lawyers’ liability insurer, I used to get such disputes dismissed by reference to advocates’ immunity (see, e.g., W v Maitland-Smith & Associates Pty Ltd  VLPT 6). The other thing that is new under the LPUL is that the decision is made outside court or tribunal proceedings, in the inquisitorial context of the office of the Legal Services Commissioner. So: no chance of an adverse costs order, but equally no immediately obvious vehicle for the Commissioner to order a practitioner who has negligently caused loss to the complainant to contribute towards the complainant’s legal fees associated with prosecuting the complaint.
The Commissioner himself can make a compensation order of up to $25,000 per complaint about a consumer matter: s. 290(2)(e). A failure to comply with such an order may amount to professional misconduct, which is very handy for the claimant: s. 290(3). The Commissioner can also require repayment of fees already paid to the lawyer, or the forfeit of fees claimed but not yet paid: s. 308(3). There is no apparent limitation on the Commissioner’s power to make such an order which is within the concept of a ‘compensation order’. Such an order could be in respect of a great deal of fees (e.g. where a firm got the legal architecture of the claim wrong and wasted a whole proceeding’s worth of costs). Extraordinarily, the Commissioner apparently has the power to make such an order which contradicts the final order of a court in a finalised suit for fees. If you find that improbable, read s. 308(3)(b) and tell me what else that provision could mean.
If the Commissioner cannot be convinced to treat the complaint as a consumer matter, he probably has an obligation to deal with a non-frivolous, non-vexatious disciplinary complaint of substance (see ss. 277, 292(1), and 315 which speaks of a duty to deal with all complaints properly made), subject to his power of uncertain compass to close a disciplinary complaint having formed the view after considering the complaint that it requires no further investigation (s. 277(1)(h)).
Professional negligence is squarely within the definitions of unsatifsactory professional conduct and professional misconduct. Any falling short of the standards of competence and diligence a member of the public is entitled to expect of a reasonably competent lawyer or law firm is unsatisfactory professional conduct: s. 296 LPUL. Obviously, that test is either identical to or scarily similar to the test for professional negligence. A substantial failure or a consistent series of failures is professional misconduct: s. 297. The Victorian Legal Services Commissioner has frequently prosecuted lawyers for that species of unsatisfactory professional conduct and that species of professional misconduct: many of these cases are such prosecutions.
Though the Commissioner has new powers to make orders if satisfied that unsatisfactory professional conduct is established (s. 299), for some inexplicable reason they do not include a power to make a compensation order. Of course, the Commissioner might very well tell the practitioner that making restitution to the complainant would likely result in him declining to prosecute the practitioner (which would give rise to some fascinating discussions between the practitioner and his professional indemnity insurer). The Victorian Commissioner is accustomed to that kind of negotiation within a disciplinary investigation because of s. 4.4.13(4) of the Legal Profession Act 2004 which expressly provides for just such a condition on not prosecuting. But, that scenario aside, a compensation order proper may be obtained only through a disciplinary prosecution, and then only if it succeeds.
The existence of a claim for compensation is, quite properly, a matter which the Commissioner takes into account when deciding whether to prosecute (see the fifth last bullet point on p. 4 of this Victorian Legal Services Commissioner policy). Now that one of the only routes to compensation for victims of professional negligence by Victorian and NSW lawyers in litigation is via a disciplinary prosecution, the Commissioner might be expected to do the kind thing and launch a prosecution if he took the view that a lawyer had been negligent and the lawyer was not willing voluntarily to pay compensation.
To get a compensation order (including an order for repayment or forfeit of fees rendered) through the disciplinary process, the Commissioner must prosecute the practitioner or firm and succeed, and the complainant must then seek compensation successfully. The complainant then has the benefit of the Commissioner’s counsel’s conduct of the prosecution, the benefit of the ability to test by a conventional trial the practitioner’s evidence, the benefit of experienced and professional decision makers making the decision, and a couple of other benefits. First, the complainant’s costs are presumptively payable by the practitioner.
A complainant prosecuting a compensation claim would be well advised to retain his or her own counsel, since it would surprise me if a compensation order application of any complexity were not dealt with separately (as in days or weeks afterwards) from the liability phase of the disciplinary prosecution and might amount to a mini-trial on issues like causation and reliance which the Commissioner’s counsel may not be prepared for, or the Commissioner may not be prepared to pay for him or her to prepare properly for. Secondly, the disciplinary tribunal may order compensation of more than $25,000 per client per complaint: s. 308(2)(b). It may do so with the practitioner’s consent. Such consent might be grudgingly given if the practitioner believed that giving it would mitigate the penal orders to be made in the disciplinary prosecution.
There are some extendable time limits. Complaints about consumer matters which involve a dispute about legal costs (‘costs disputes’) are to be made within 60 days after the legal costs became payable, or 30 days of an itemised bill. That is much much shorter than the effective time limit to challenge most bills in the Costs Court. The extent to which this time limit may be circumvented by dealing with the complaint as a complaint about a disciplinary matter remains to be seen. But whether any complaint is a ‘consumer matter’ is something which the Commissioner gets to decide in the exercise of a discretion (s. 269(1)), so presumably a complaint about legal costs could be treated as not a consumer matter, so that the 60 day time limit would have no application. In the case of all other complaints, the basic time limit is 3 years after the conduct complained of, which is considerably shorter than the non-extendable statute of limitation for most professional negligence claims against lawyers (6 years from the date when some loss was first suffered as a result of the allegedly negligent acts).
- Judicial review of decisions to dismiss disciplinary complaints
- States’ and territories’ disciplinary systems summarised by the government
- Legal Services Commissioner’s new decision making powers
- Validity of a Bureau de Spanque notice requiring information in relation to a complaint
- It’s ok for solicitors to try to resolve complaints directly with the complainants