Legal Services Commissioner seeks to overturn privilege against penalties

There is an old and well established privilege, the privilege against penalties, which is a relative of the privilege against self-incrimination.  It entitles solicitors facing disciplinary prosecution to stay silent throughout the proceedings until the end of the Commissioner’s case unless the Tribunal makes an order requiring provision of written grounds and an outline of argument identifying in broad terms what is in issue.  And even if such an order is made, compliance will not require the foreshadowing of any evidence or the admitting or denying of any facts.

The other day, a full frontal attack by the Legal Services Commissioner on the privilege in disciplinary prosecutions of solicitors did not result in it being distinguished out of existence.  Though there was no contradictor in the hearing, the President of VCAT, Justice Greg Garde, gave the challenge short shrift in LSC v Spaulding [2015] VCAT 292.

Since practitioners started increasingly exercising their right to stay silent after the disciplinary investigation has concluded and before the conclusion of the Commissioner’s case, the Commissioner has begun increasingly to seek orders for the service of a notice to admit, despite the absence of any rule-based regime in VCAT governing the consequences of non-response to such notices.  Some practitioners have consented to such orders and VCAT has made them.  There may be grounds to review decisions in such cases where the practitioner did not ‘waive’ the privilege, since President Ross said:

‘in the absence of a statutory provision to the contrary, or waiver by a respondent, the effect of penalty privilege is that a respondent cannot be ordered to make discovery, produce documents, provide information or respond to a notice to admit.’

Waiver as a concept in the law generally requires a high level of deliberate abandonment.  No doubt for that reason, the Commissioner began some time ago to alert practitioners to the existence of the privilege when proposing such orders.

President Garde has also made clear that the Tribunal itself has a duty ‘to ensure that a respondent is informed of the options in order to make an informed and voluntary decision whether or not to waive the privilege.’

The President also observed that many professionals will wish to make admissions if for no other reason than to be seen  to be appropriately cooperative, and to attenuate the issues and so diminish the costs which will be payable if the practitioner loses.  My clients often make extensive admissions, sometimes make denials, but often remain silent in relation to some issues and strenuously resist the characterisation of such silences the matters about which they have stayed silent as ‘denials’.  There is, however, nothing to be gained from consenting to an order to provide a response to a notice to admit.  When, as I have found to be the case, the notices are framed in a manner which purports to graft onto VCAT’s procedures a presumption of admission in the event of non-denial, great procedural uncertainty is generated, because, unlike in the state courts, there are no rules of procedure which provide a legal basis to generate such an admission.  And it will often be more convenient for the practitioner to craft the admissions in the form he or she considers most appropriate, possibly in a discursive letter, and at a time convenient to him or her.  Furthermore, the notices to admit usually track the allegations in the Application itself extremely closely, regardless of the admissions made during the investigation in correspondence which is annexed to the Application, so that the requirement to respond to the notice to admit is akin to a requirement to serve a defence, and the drafting, filing and service of the notice to admit generates a substantial cost on a party-party basis.

Finally, for some reason, no one ever seeks orders to serve notices to admit on the Commissioner.  If, for some reason, one were to consent to orders for the provision of a response to a notice to admit, it would seem appropriate to me to reserve a right to reciprocity. Continue reading “Legal Services Commissioner seeks to overturn privilege against penalties”

Jones v Dunkel inferences in disciplinary hearings

In Council of the Law Society of NSW v Clapin [2011] NSWADT 83, NSW’s Bureau de Spank rejected a submission based on Jones v Dunkel which the Law Society said should be drawn against the solicitor, who did not give evidence:

In dealing in this way with the question whether the Solicitor violated the statutory requirements with full awareness of their contents or because he was ignorant of them, we are rejecting a submission put by Mr Stitt. He argued that because the Solicitor chose not to give evidence in these proceedings we should infer that he was fully aware of the nature of these requirements. In disciplinary proceedings such as these, however, we should not make findings of seriously improper conduct against the respondent unless they are affirmatively established by cogent evidence. We decline to draw the inference urged upon us by Mr Stitt.

New cases

Legal Services Commissioner v Dempsey [2010] QCA 197 is an unsuccessful appeal from a disciplinary prosecution in which findings of dishonesty were made.

Dye v Fisher Cartwright Berriman Pty Ltd [2010] NSWSC 895 is a case in which an application for a costs assessment (NSW version of taxation) outside the allotted 12 month period succeeded.

Young v Masselos & Co [2010] NSWDC 169 is one of those cases where a solicitor negligently let a limitation period go by and damages had to be assessed based on the plaintiff’s prospects of winning the case foregone.

Council of the Law Society of New South Wales v Harrison [2010] NSWADT 201 is a decision about the Law Society’s successful application to amend a charge against the respondent solicitor.  It reviews a lot of NSW law about the requirements for pleading disciplinary charges, and considers the application of Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 to disciplinary hearings.


Penalties privilege and the corporate interrogee

Graymarshall Pty Ltd v Department of Environment, Climate Change & Water [2010] NSWLEC 54 is a decision of NSW’s Land and Environment Court about the application of the privilege against penalties (related to, but separate from, the privilege against self-incrimination). A regulator issued a notice compelling the production of information to a company. The statute provided that the privilege against self-incrimination was not a good answer to refusing to comply with the notice. It also said that there was a presumption that a contravention of the Act by the company was a contravention by the directors.  There are similarities between this legislative scheme and the Legal Profession Act, 2004‘s scheme for the investigation by the Legal Services Commissioner of incorporated practitioners.  Justice Pepper said: Continue reading “Penalties privilege and the corporate interrogee”