$5,000 fines in lawyers’ disciplinary prosecutions

In this post, I noted the New South Wales Court of Appeal’s review of fines in solicitors’ disciplinary proceedings. I did my own little survey of Victorian cases recently in order to justify to the VCAT a joint submission as to penalty following a plea.

How naughty does a lawyer have to be to cop a fine of $5,000 in a disciplinary prosecution where that is the principal penalty (often paired with a reprimand, and costs of about $5,000)?  This naughty:

In LSC v Turner [2007] VCAT 1986, Acting president Bowman J issued a fine of $5,000 for a charge described as follows:

‘[3] … Turner signed a bank guarantee in three places, witnessing it as a legal practitioner, allegedly employed by the Complainant, Mrs F, who is also the guarantor in relation to that document. In essence, he witnessed Mrs F’s signature, and certified that he had explained the effects of the guarantee to her and that she appeared to understand it. However, she was not present. The document had been previously signed by Mrs F, allegedly under duress, although this allegation was not known to Turner at the time. What was known to him was that Mrs F was not present when he witnessed her signature and certified as to his status, his advice, and her apparent understanding of the situation.’

In a 2010 prosecution, Senior Member Howell issued a fine of $5,000 for professional misconduct at common law constituted by grossly neglecting the practitioner’s duties to take care to ensure that all discoverable documents of his husband client were discovered to the wife in matrimonial litigation.

LSC v Faigen [2011] VCAT 1726 was a guilty plea to one charge of common law misconduct constituted by a willful or reckless breach of the obligation to avoid conflicts of duties, with serious consequences for clients. Member Butcher issued an aggregate fine of $5,000.

In LSC v Turner [2012] VCAT 373; [2013] VCAT 390 (rehearing following remitter) (both Member Butcher), a barrister failed to pay tax for 10 years as summarised more fully by Senior Member Smithers in LSC v RVB [2013] VCAT 1579 at [32]. The fine (before and after the appeal) was $5,000.

In LSC v Jackson [2012] VCAT 372, Senior Member Smithers issued a fine of $5,000 where the practitioner forged his wife’s signature and used a false document 6 times.

In LSC v Barrett [2012] VCAT 1800, Senior Member Smithers issued a fine of $5,000 following a guilty plea to two counts of professional misconduct and two counts of unsatisfactory professional conduct by charging a contingency fee ignorant of the relevant prohibition.

In LSC v Thalakada [2013] VCAT 2208, Member Butcher fined a practitioner $5,000 for two counts of professional misconduct at common law: lying to the Titles Office and lying to a fellow practitioner.

In LSC v Macauley [2013] VCAT 1271 Member Butcher fined a practitioner $5,000 for non-compliance with a previous disciplinary order of VCAT.

In LSC v Blaker [2013] VCAT 87, Member Wentworth issued a fine of $6,000 having found s. 4.4.3(1) misconduct, commenting:

‘[55] The conduct is serious. Mr Blaker continued to act for a period of years, despite obvious signs that Mr and Mrs Lewis were failing to meet their obligations under the loan agreement and had different interests to Mr Smith as a result. He acted for both clients in relation to two variation agreements, in 2004 and 2007, that were almost entirely in Mr and Mrs Lewis’ interests.’

In LSC v Galatas [2013] VCAT 214 Senior Member Smithers issued a fine of $2,000 in a case of a guilty plea to two charges of professional misconduct: gross delay leading to losses to clients. That there was a possibility of civil compensation payable in the future seems to have been of relevance. Mr Smithers noted that it was not the case that ‘a fine will only be appropriate where moral turpitude is involved’: [23].

In LSC v Karakoulakis, the practitioner falsified his resume and his website claimed on his website to have written three articles which were largely plagiarised.  He was fined $5,000, ordered to undertake some additional CPD in ethics (seemingly on the basis that it was not studying professional ethics hard enough the first time round which led to confusion about whether it was ok to lie or not), and ordered to pay the Commissioner’s costs of the prosecution of about $6,708.

The New South Wales Court of Appeal recently surveyed fines in solicitors’ disciplinary proceedings over the last decade or so, in Russo v Legal Services Commissioner [2016] NSWCA 306. Two decisions from that jurisdiction involved a $5,000 fine for the dishonest misappropriation of trust funds, and recording of trust monies in willful breach of the trust accounting rules:

’69. … Council of the Law Society of New South Wales v Ross [2013] NSWADT 106 and Law Society of New South Wales v Hannam [2006] NSWADT 24 where the fine imposed for the misconduct in each case was $5,000. In Ross, the practitioner received fines of $5,000 each for two matters – deliberate transfer of $9,900 for costs from trust to office without authority; and subsequently failing to pay counsel’s fees after authorisation to transfer from trust to office of a sum of $2,200 more than required for those fees in any event. In Hannam, there was a failure to keep proper accounting records in respect of 16 client matters.’

 

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