Disciplinary prosecution halted because Law Society’s reasons for deciding to prosecute were inadequate

The NSW Supreme Court has quashed decisions of the NSW Law Society to commence disciplinary proceedings against a Sydney solicitor following complaints that the solicitor advanced allegations of negligence in a costs assessment against two barristers without an adequate factual foundation: SAL v Council of the Law Society of NSW [2017] NSWSC 834, a decision of Wilson J. The Court restrained the Council from continuing the disciplinary prosecution which had been stayed pending the application for judicial review. The Council’s reasons were inadequate in not dealing with exculpatory material advanced by the practitioner during the investigation, and in not disclosing the Council’s path of reasoning in relation to why the conduct was professional misconduct rather than unsatisfactory professional conduct or why it was appropriate to prosecute rather than make an in-house determination such as a reprimand and a compensation order.

The implications of this decision are profound, for many a set of reasons at the conclusion of a disciplinary investigation are likely no better than those which were examined in this case, for the simple reason that no one has ever really sought to take the adequacy of these kinds of reasons to task.  First, those who are subject to current prosecutions might seek prohibition to stop them in their tracks: if you are involved in a disciplinary prosecution, careful study of this decision is advised. Secondly, with the rise in the quality of reasons at the conclusion of a disciplinary prosecution which one presumes the decision will generate, it may be hoped that better decisions about what to prosecute will be made.  Continue reading “Disciplinary prosecution halted because Law Society’s reasons for deciding to prosecute were inadequate”

Applicant brings case beyond jurisdiction; respondent doesn’t take the point until the last minute; no one gets costs

Jasmin Solar Pty Ltd v Fitzpatrick Legal Pty Ltd [2017] VSC 220 is a little case, but it is instructive about a number of things: solicitor-client taxations can take an awfully long time; some businesses probably don’t understand that they are ‘commercial clients’ and so fail to negotiate rights in lieu of the rights to seek taxation which, under the LPUL they no longer have; some lawyers no doubt have standardised disclosures which advise their clients that they have rights which, if they are commercial clients, they do not have; the costs proportionality provisions extend to cases where costs have become disproportionate as a result of a simple oversight by one or other side’s lawyers.

Continue reading “Applicant brings case beyond jurisdiction; respondent doesn’t take the point until the last minute; no one gets costs”

What can barristers charge for?

I gave a presentation at the really well organised Junior Bar Conference this year.  The Bar sought questions which the junior barristers who attended wanted answers to.  One question, which I thought odd, but which I answered  earnestly, was ‘What can a barrister charge for?’  This was my answer:

The starting position is freedom of contract, such that barristers can charge for whatever they can get someone to promise to pay. The costs provisions of the LPUL (the Legal Profession Uniform Law (Victoria)) mostly do not apply in favour of commercial or government clients and commercial and government third party payers. There is newly room, therefore, for much greater creativity in contracting with such clients. Note the application of some provisions about conditional costs agreements and contingency fees, however, even in relation to such clients and such third party payers: s. 170. Continue reading “What can barristers charge for?”

The Civil Procedure Act’s overarching obligation to keep costs proportionate

The Civil Procedure Act 2010 applies to proceedings in the Magistrates’ Court, County Court, and Supreme Court but not federal courts or VCAT. Its overarching purpose is to

‘facilitate the just, efficient, timely and costs effective resolution of the real issues in dispute’: s. 7. Continue reading “The Civil Procedure Act’s overarching obligation to keep costs proportionate”

Appeals from VCAT on the basis of inadequate reasons

A failure to give reasons is an error of law.[1] Seriously inadequate reasons are corrosive of public confidence in the administration of justice and ought not to be tolerated by an appeal court, since justice must not only be done but be seen to be done. This is the first public policy informing the requirement for reasons by courts and court-like tribunals. As the Supreme Court has observed:

‘To have a strong body of evidence put aside without explanation is likely to give rise to a feeling of injustice in the mind of the most reasonable litigant.’[2]

That is especially so in relation to factual determinations where a right of appeal lies only on a question of law. Even more especially so in a quasi-criminal[3] prosecution with serious consequences for the practitioner in which a disciplinary prosecutor carries the burden of proof as described in Briginshaw v Briginshaw. Continue reading “Appeals from VCAT on the basis of inadequate reasons”

The latest on pro bono costs agreements which preserve the possibility of a costs order against the other side

For far too long, the law was unclear about whether costs agreements which said ‘We’ll only charge you if you win and only for work in respect of which we get a costs order’ actually worked.  The problem was that losing parties invoked the indemnity principle in the law of costs, arguing that what was recoverable under a costs order was nil.  The indemnity principle says that party-party costs awards are in no way punitive; they are wholly compensatory. Party-party costs orders are awarded as a partial indemnity to the winning party’s liability for their lawyers’ fees and other expenses of the litigation.  If the winning party has no such liability at the time of the costs order, there is nothing for the losing party to be ordered partially to indemnify.  Where the winner’s liability to pay their lawyer was conditional on a party-party costs order, there was, at the moment of making the costs order, nothing to indemnify.  Wentworth v Rogers [2006] NSWCA 145 was the leading case for many years.  Justice Santow’s dictum was favourable to pro bono solicitors while Justice Basten’s was unfavourable.  The third judge did not weigh in on this question.

What the judges in that case said, however, was obiter dicta.  Now there is a unanimous decision of the Victorian Court of Appeal which actually decides that this kind of costs agreement works; the winning party may obtain from the losing party a party-party costs order by way of a partial indemnity against the liability to pay their lawyers.  The case is Mainieri v Cirillo [2014] VSCA 227 and Nettle, Hansen and Santamaria JJA expressly preferred Justice Santow’s reasoning in Wentworth. It may be expected that state courts, including Courts of Appeal, elsewhere in Australia will follow the Victorian Court’s decision:  Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 at [134] and [158].

That is the good news though.  The bad news is that an unfortunate level of confusion still prevails in relation to costs agreements which are even closer to pure pro bono in that they say ‘We won’t charge you anything unless you get a costs order, and then we will only charge you so much as you are actually able to recover from the person ordered to pay costs under the costs order’.  A costs agreement which was, as a matter of substance, to that effect was found not to present a problem in LM Investment Management Limited v The Members of the LM Managed Performance Fund [2014] QSC 54.  Then in Mainieri, the Court of Appeal left open in obiter dicta  the possibility that a costs agreement in which the winning party’s liability to pay their solicitors was conditional on recovery of costs from the losing party might not work.  Subsequently, in Mourik v Von Marburg [2016] VSC 601 the Costs Judge in Victoria decided that such an agreement in fact does not work, but the correctness of that decision has subsequently been doubted in dicta of a Victorian Federal Court judge sitting in Sydney.  What a mess.  But I am not convinced that the pro bono sector should give up on obtaining judicial recognition of a costs agreement which, as a matter of substance, predicates recovery of costs on the actual recovery of costs from the other side. Continue reading “The latest on pro bono costs agreements which preserve the possibility of a costs order against the other side”

Does the Legal Services Board have the power retrospectively to excuse inadvertently practising briefly without a practising certificate?

As with most years, no doubt scores of Victorian lawyers forgot to renew their practising certificates last year.  For months, in some cases, this situation was allowed by the regulators to persist without intervention.  In Victorian Bar Inc v GSL [2006] VCAT 435 the VCAT, constituted by Judge Bowman, Peter Jopling QC, and Ms F Harrison made clear that the disciplinary Tribunal expected regulators to be proactive to prevent practitioners inadvertently practising uncertificated. Eventually, at least in some cases, the regulators seem to have raised the issue with some practitioners whose sudden apparent cessation of practice at a young age seemed unlikely.

May I respectfully suggest that you go and check, now, whether you actually have a practising certificate for the current financial year.

The question now that the regulators have apparently complied imperfectly with VCAT’s guidance is what ought to happen?  Should the practitioners who are close to blameless for practising without a certificate be given a new one with retrospective effect (some were told, for example, by their office manager that the applications had been lodged before the end of the year, and were entitled to assume that their existing practising certificate had ongoing operation pending the Board getting around to dealing with the application, by virtue of a legislative provision to that effect discussed below). Or should the full consequences of the law, including disciplinary investigation, and the refunding to clients of fees for work done while uncertificated (s. 10, LPUL), be brought to bear? The latter approach has the disadvantage of causing lawyers’ professional indemnity insurer to cancel cover during the period of non-certification and the Fidelity Fund may be unavailable to clients of the lawyers in question in relation to conduct engaged in while uncertificated.

What VCAT said was:

Continue reading “Does the Legal Services Board have the power retrospectively to excuse inadvertently practising briefly without a practising certificate?”