Legal Services Board v DF  VSC 292 will be of considerable interest to those who draft and work within no-win no-fee retainers. Justice Karin Emerton found that though Victoria’s repealed Legal Practice Act, 1996 implicitly prohibited the charging of uplift fees otherwise than upon a ‘successful outcome’ it was open to parties to provide for the payment of an uplift in circumstances which could not be described, in ordinary parlance, as a ‘successful outcome’, such as where the client terminates the solicitor’s retainer. Her Honour also found that ‘if you recover any money from your case’ was a sufficient definition of the ‘successful outcome’, finding that objectively construed, what those words meant were ‘if you recover any compensation’, as opposed to costs. The decision will be of assistance in interpreting the similar provisions under Victoria’s Legal Profession Act, 2004 and the other states’ (South Australia excepted) equivalents.
First of all, happy new year!
The take-home point of this post is that if you lodge a civil complaint (e.g. a pecuniary loss dispute or a costs dispute) with the Legal Services Commissioner, you limit the amount of compensation you can get in VCAT to $25,000 because of s. 4.3.2(1)(c) of the Legal Profession Act, 2004. That prevents the commencement of proceedings in relation to the subject matter of the complaint until the complaint has been finally determined, or dismissed, by which time it will often be res judicata, at least in those cases where the final determination is by VCAT or the Supreme Court or the Court of Appeal (subject, perhaps, to (i) the operation of s. 4.2.14(2), which is what the Court of Appeal calls the ‘two bites of the cherry’ provision, and (ii) the possibility of adding a Fair Trading Act, 1999 cause of action to a proceeding originally instituted in VCAT under the Legal Profession Act, 2004, discussed below). In this touchy feely win win alternative dispute resolution Civil Procedure Act, 2010 world, it is apparently anomalous that those who choose to travel to VCAT’s Legal Practice List via the obvious alternative dispute resolution channel (i.e. via a civil complaint to the Commissioner’s dispute resolution jurisdiction) are penalised so severely in comparison with those who proceed immediately to litigation in that List by invoking the parallel jurisdiction of the Fair Trading Act, 1999. Continue reading “Lodging a civil complaint with the Legal Services Commissioner limits you to compensation of $25,000 per complaint”
Here begins a series of posts on costs disclosure obligations under the Legal Profession Act, 2004, and the consequences of not complying with them. It is a work in process, and I would be grateful for any experiences of this area of the law you might have, and any authorities of interest which I have not included.
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We have had costs disclosure obligations mandated by legislation for a long time now. The Legal Practice Act, 1996 came into operation on 1 January 1997, and applied to matters in which the solicitor was retained after that date, and to costs agreements made after that date: cl 18, Schedule 2. There is a similar regime under the Legal Profession Act, 2004, which came into force on 12 December 2005 but, as we will see, the differences are kickers. The Legal Profession Regulations, 2005 contain provisions relevant to about the costs disclosure and bill disclosure regimes alike. Continue reading “Costs disclosure obligations and consequences of not complying: part 1”
Virgtel Ltd v Gadens Lawyers  VCAT 1584 might be VCAT’s Legal Practice List’s highest value case. Not all that long ago in the scheme of things, I remember learning that VCAT had certain jurisdictions which were unlimited, and realising that — shock! — it might hear cases which the Magistrates’ Court could not hear. Well, this case is an application pursuant to s. 103 of the Legal Practice Act, 1996 to set aside a costs agreement pursuant to which bills totalling $2.3 million were charged. That explains why two QCs faced off on a pre-trial application.
The respondents applied for summary dismissal under s. 75 of the VCAT Act, but advised the day before the hearing that they would withdraw it. The applicants sought costs of the application. Senior Member Howell granted that application, on a solicitor-client basis. That was because the application was misconceived. Its thesis was that there was no point making an order setting aside the costs agreement because all but one of the bills was out of time for taxation anyway. But it did not follow from the unavailability of taxation that the fees billed by the respondents could not be adjusted. As Senior Member Howell said: Continue reading “Is this the Legal Practice List’s biggest case?”
There are still disciplinary cases coming through the system in respect of conduct which occurred before 12 December 2005, the date on which the Legal Profession Act, 2004 commenced. Back in those days, the maximum fines the Legal Profession Tribunal could render under the Legal Practice Act, 1996 were $1,000 for unsatisfactory conduct and $5,000 for misconduct (unless the Full Tribunal sat, in which case, a maximum fine of $50,000 was available for misconduct). Recently, the Legal Services Commissioner accepted, in a disciplinary prosecution, that the penalty for a disciplinary wrong committed before 12 December 2005 ought not to exceed the maximum penalty available at the time. That is so even where the post-12 December 2005 investigation of the pre-12 December 2005 conduct was properly carried out pursuant to the Legal Profession Act, 2004 and where the VCAT proceedings in which the fine is rendered are governed by the 2004 Act.
So, assuming the Commissioner maintains a consistent position, the highest fine he is likely to contend for in any unsatisfactory conduct charge in respect of pre-12 December 2005 conduct is $1,000, making the desirability of prosecuting such conduct, as opposed merely to reprimanding the practitioner, questionable. Continue reading “Disciplinary penalties for pre-2006 conduct”
Graymarshall Pty Ltd v Department of Environment, Climate Change & Water  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”
Recently, the County Court’s Practice Court accepted that where a client admitted having received a bill given by email, service in accordance with the Legal Practice Act, 1996 had been effected, so that various deadlines which are counted from that date then commenced to run. That is so even though the commencement of the running of time was predicated on a bill having been ‘given in accordance with’ a service regime which was very specific and did not include service by email. This post considers the law in that regard, the only authority on the point being consistent with the Practice Court’s decision. It also notes the deemed service provisions in the 1996 and 2004 Acts, and their interpretation. Continue reading “Informal service of lawyers’ bills”
What follows are links to the Acts which regulate lawyers in each state and territory, ordered by date of principal commencement, commencement details, and, where available, links to the predecessor Act. South Australia is yet to catch up with the rest of Australia, stuck with its Legal Practitioners Act, 1981. Everyone else has Acts in force entitled Legal Profession Act based on national template legislation, all of which no less luminous a luminary than Kevin Rudd has labelled an ‘unwieldy monster’.
Consistently with my policy of burdening you with talk only of changes rather than of proposals for change, I have spared you until today the news that the national legislation debacle has been elevated from SCAG (Standing Committee of Attornies General) to COAG (the Council of Australian Governments). And that Attorney General McClelland’s people are already drafting the minimalist national lawyer regulation which all the States will have to adopt exactly, else the Commonwealth will grab their lawyer regulation powers altogether. Imagine the transitional provision delights which await practitioners and their unwitting clients! My advice to the strongmen in the Department for Crushing Centralism: don’t allow for any continued operation of the old Acts after the commencement (all provisions in all states on the same easy to remember date) of the new Acts. The modern Acts are:
Legal Profession Act, 2004 (NSW) which commenced on 1 October 2005
Legal Profession Act, 2004 (Vic) most of which commenced on 12 December 2005
Legal Profession Act, 2006 (ACT) most of which commenced on 1 July 2006
Legal Profession Act, 2006 (NT) most of which commenced on 31 March 2007
Legal Profession Act, 2007 (Qld) most of which commenced on 1 July 2007
Legal Profession Act, 2007 (Tas) which commenced on 9 April 2008
Legal Profession Act, 2008 (WA) most of which commenced on 1 February 2009
Victoria uniquely adopts its crazy numbering system. More detail below, alphabetically this time, and Victoria excluded on account of that’s a whole other post waiting for me to finish it (I started it the summer before last). Continue reading “Links to the states’ and territories’ Legal Profession Acts”
Under s. 95 the Legal Practice Act, 1996, interest was chargeable on bills of costs from the period from 30 days after payment is demanded until the bill is paid. But what does it mean? Does interest start to run 3o days after (i) the date of the bill, (ii) the day it was posted, (iii) the day it was received, (iv) the day at the end of the period which the costs agreement says payment is to be made within, or (v) the due date for payment stated on the bill? In this post, I hazard an answer, and note the different provision now to be found in the Legal Profession Act, 2004, following its amendment which I posted about here. Continue reading “From when can solicitors claim interest on an unpaid bill?”
R v Maurice B  VSC 254 records the sentencing remarks of Nettle JA apparently sitting in the trial division following a guilty plea by a solicitor who stole a quarter of a million dollars. The solicitor argued the state of his mind was relevant in two ways. First, he said his impaired mental functioning short of psychiatric illness at the time of the offending diminished his moral culpability. Secondly, what appears to have degenerated into a psychiatric illness (depression, anxiety disorder, panic attacks requiring anti-depressants) was a relevant consideration in determining an appropriate sentence.
Based on the psychiatric evidence, Justice of Appeal Nettle gave little truck indeed to the first claim, but did take the mental state of the solicitor by the time he had been through the Legal Profession Tribunal and the criminal charges into account in fashioning an appropriate sentence. In fact, along with the solicitor’s age (67) his mental condition at the time of sentencing was the thing which kept him out of the clink. His Honour conducted a survey of a number of Victorian cases involving thieving solicitors who received suspended sentences of imprisonment and remarked:
‘I doubt that the sentences imposed in at least some of those cases gave due weight to the overriding importance of general deterrence in matters of this kind. For, even allowing that a suspended sentence is a sentence of imprisonment for all purposes, it is manifestly less burdensome than an immediate term of imprisonment. It is also to be remembered that the maximum sentence for the offence of having a deficiency in a trust account has more than doubled since the Legal Professional Practice Act 1958 was first replaced by the Legal Practice Act 1996, from seven years to 15 years’ imprisonment. These days, the idea of a fully suspended sentence in a case of solicitor defalcation will seldom sit easily with the imperative that solicitors who act in fraudulent breach of trust account obligations “must … inevitably suffer severe punishment”.’
The whole of the relevant passage is: Continue reading “Nettle JA on sentencing thieving lawyers”
This post has been sitting around as a draft waiting to be finished. There is little chance of that for a long time. So here is my incomplete annotation to s. 103 of the Legal Practice Act, 1996. That is the provision which gives VCAT (formerly the Legal Profession Tribunal) jurisdiction to set aside costs agreements on a statutory basis peculiar to that species of contracts. All costs agreements in all matters in which first instructions were taken prior to 12 December 2005, regardless of when the costs agreements were entered into, may be argued to be governed by the old Act. So there is some life left in the old s. 103 yet. Continue reading “Applications to set aside costs agreements”
In this post, I just reproduce what Deputy President Dwyer said recently about the burden of proof, right to silence, and inferences which may be drawn from the fact of the exercise by a solicitor of the right to silence. He said it in the context of a hard-fought hearing into the conduct of Kylie’s one-time lawyer, Michael Brereton, reported on in the previous post. Interestingly, the Tribunal was not critical of the solicitor’s decision not to give evidence, but asserted that it was free to draw adverse inferences against the solicitor under the rule in Jones v Dunkel, and did so with gusto, drawing support from Woods v Legal Ombudsman  VSCA 247, and Golem v Transport Accident Commission [No2]  VCAT 736.)
What Mr Dwyer said was: Continue reading “Latest word on burden of proof in professional discipline ‘prosecutions’”
On 13 August 2008, Deputy President O’Dwyer found charges of misconduct at common law made out against Kylie Minogue’s one-time solicitor, the man towards the centre of the government’s Operation Wickenby investigation, Michael Brereton. See Legal Services Commissioner v Brereton  VCAT 1723. Mr O’Dwyer found he had transferred more than $2.3 million of clients’ money out of his trust account contrary to the trust accounting rules. Since he did not turn up to the hearing, the finding is not altogether surprising. His counsel explained the solicitor ‘was attending to important business matters overseas, having invested in an information technology business with links in America and Europe,’ which makes me wonder whether he could not have used some of his investments to appear by video link. The Age‘s report is here.
The Commissioner is to be commended for making some sense of the very complex business transactions in which the solicitor and his clients were involved, and achieving the making out of the allegations of misconduct which were made out. So too the Tribunal, which had a difficult task in the absence of participation by the solicitor, and produced a spare but careful set of reasons. But it was not all wins for the Commissioner. Continue reading “Kylie’s one-time lawyer goes down, with a ‘disgraceful and dishonourable’ finding”
The Legal Services Commissioner’s annual report went online today. You can download the pdf by clicking here. The big news is that she’s put 2 new blokes on the staff, but the blokes to sheila ratio has actually decreased (to 1 in 20).
In the year to 30 June 2007, the Commissioner’s staff of 45 (including 6 part-timers) closed 2550 files. At the end of the disciplinary complaint process, the Commissioner has to decide whether the complaint is made out, unless it was summarily dismissed earlier. The test is whether VCAT would be reasonably likely to find a practitioner guilty of professional misconduct or unsatisfactory professional conduct. 5,089 enquiries gave rise to 1,487 disciplinary complaints, yielding a single instance where the Commissioner thought it was reasonably likely that VCAT would find the practitioner guilty of misconduct, and that was the matter reported in my previous post in which the barrister made a full confession from the outset of the investigation. The three other misconduct prosecutions were for failure to cooperate with the Commissioner’s investigations.
The 1,487 disciplinary complaints also yielded 64 instances where the Commissioner thought it was reasonably likely that VCAT would find the practitioner guilty of the lesser disciplinary offence of unsatisfactory conduct. She has a discretion whether to prosecute in these instances. She exercised that discretion in favour of laying charges just once, when some scamp attempted to charge for storage or retrieval of documents without a written agreement by the client. So 2 charges were laid as a result of the 5,089 enquiries. Additionally, 3 charges were laid because of non-cooperation with investigations. And 28 slaps over the wrist were privately inflicted in the form of reprimands and cautions. So: pity the professional discipline Bar, all hail to an unprecedentedly well behaved profession, and shame on the great unwashed for making all those hurtful allegations which went nowhere and cost the revenue $7 million. Continue reading “Victorian Legal Services Commissioner’s 2006-2007 annual report”
In Ralph Cosentino v MY  VCAT 1319, Member Butcher continued a tradition of statutory interpretation of a little technical provision about when service of statutory notices is effective. That tradition, of the Legal Profession Tribunal and its predecessors, has always troubled me. Though it does not seem to have been cited by counsel, a recent decision of a Deputy President of VCAT took the opposite approach: Vitesnik v Macedon Ranges SC  VCAT 598. There is a Legal Profession Act, 2004 notice issued by the Legal Services Commissioner within 60 days of receiving which an applicant must start their VCAT case. Mr Butcher concluded that he would have found that Mr Cosentino did not ‘receive’ it on the day when the Act directed that it was to be ‘taken to have been given to him’. But the question never quite arose, as Mr Butcher used a VCAT Act, 1998 power to excuse the applicant’s use of the wrong originating process and concluded that the proper characterisation of things was that the application, though defective, had been made within time anyway, so that it was appropriate to excuse the procedural defect and recognise the case as having been started within time. Warning: this is a particularly boring decision unless you are a user of VCAT’s Legal Practice List. Continue reading “The 60 day time limit for instituting VCAT proceedings under the Legal Profession Act”
The law of unconscionable conduct has been rolled out again as a vehicle to adjust lawyers’ fees in the same way as they might be in a civil costs dispute under the Legal Profession Act, 2004, but in a case to which that Act’s regime did not apply. It has happened once before to my knowledge (see my previous post). In P&R v. Goodwin  VCAT 1199, solicitors sued for their fees, but succeeded in obtaining an order only for the difference between the amount they estimated total legal fees to be at the start of the retainer, and the amount they had already been paid by the client. I do not think VCAT has jurisdiction in relation to disputes between lawyers and clients, because the jurisdiction is predicated on the engaging in of trade or commerce (VCAT has reserved on a test case in that regard). That aside, it is a relatively attractive forum in which to sue for fees. This decision may suggest that it is better to sue in a court, however, unless there is an unusual squeaky cleanliness in following the costs disclosure regime. Continue reading “Unconscionability and legal fee estimates, again”
The last post referred to part 1 of the last chapter of an intriguing saga. The second and final part of that chapter is the decision on costs: PJQ v Law Institute of Victoria (No. 2)  VSCA 132. The President of the Court of Appeal rejected the following submissions by the Institute:
- that the Institute was just a contradictor, assisting the Court by ensuring that it had two views to choose from, and was akin to an amicus curiae;
- that it would have been entirely inappropriate for a professional regulator such as the Institute to consent to the relief sought by the appeal;
- that the cases which say that ‘costs ought not to be awarded against a statutory tribunal which makes an order in excess of its powers unless it can be demonstrated that the tribunal has been guilty of serious misconduct or corruption or has acted perversely’ are relevant (‘this submission is entirely misconceived. The Institute is not a tribunal. Rather, it appears before the Tribunal as a party. Its function is that of prosecutor. No question arises here of the Tribunal’s costs, since the Tribunal did not appear.’);
- it was relevant that parliament had directed that costs of the Full Tribunal hearing were not to be awarded against the Institute save in exceptional circumstances (s. 162, Legal Practice Act, 1996; see now Victorian Civil and Administrative Tribunal Act 1998, Sch 1 cl 46D(3));
- because it made no submissions as to penalty, the Institute did not lead the Tribunal into error. Continue reading “Costs ordered against Law Institute in unsuccessful opposition to appeal against sentence of solicitor”
PJQ v Law Institute of Victoria VSCA 122 is the part 1 of the last chapter in a story of good tactical plays characteristic of professional discipline specialist Sam Tatarka in the representation of a solicitor charged with gross overcharging, and applying trust monies to pay his fees without the appropriate paperwork. It sounds like a plea bargain was entered into whereby the solicitor pleaded guilty to the charges on the basis that what led to the overcharging was overzealous representation and disorganization rather than dishonesty and in return, the prosecutor — the Law Institute of Victoria — would not make submissions as to penalty. But that is speculation. When it came time for ‘sentencing’, the solicitor offered an undertaking to the Tribunal that any file in which he proposed to charge more than $20,000 would be independently costed by a costs consultant. The Tribunal enquired whether he would submit to such costing by the Law Institute’s costs assessing service. The solicitor said yes.
In Law Institute of Victoria Limited v PJQ  VLPT 8, the Full Legal Profession Tribunal came down hard, accepting the expert opinion of a man without a law degree that appropriate legal costs for a proceeding of the kind in which the solicitor had represented his client were half what he had charged, and suspending the solicitor from practice for 12 months. To the surprise of the President of the Court of Appeal, the Tribunal made no mention of the alternative to suspension represented by the undertaking despite going through the ritualistic ‘no punishment happening here’ recitations (‘Our task does not involve punishment of the legal practitioner. Our task is to provide for the protection of the public, including deterrence of the legal practitioner and the profession generally from like conduct…’; ‘Conscious of the necessity to place the barrier high before depriving a member of the profession of their practising certificate we have given all the circumstances of this case the most careful and repeated consideration.’ etc.).
President Maxwell, with whom Justices Chernov and Nettle agreed, held that the Tribunal’s inexplicable failure to mention in its reasons the undertaking offer suggested that its sentencing discretion had miscarried. His Honour actually acknowledged with refreshing forthrightness that penalisation is part of sentencing for professional discipline offences, but, by his words, sought to give real meaning to the concept that protection of the public is what professional discipline is all about, by quashing the Full Tribunal’s orders and, on resentencing, making no orders in recognition of the substantial costs already incurred by the solicitor and the partially endured suspension: Continue reading “Court of Appeal sets aside unduly harsh outcome in gross overcharging prosecution”
Acting President Bowman handed down a decision on Friday in Cedric Naylor’s Case  VCAT 958 approving the existing practice of VCAT, and before it the Legal Profession Tribunal, of entertaining professional misconduct allegations against lawyers by their clients as part of applications to set aside costs agreements. Entertaining them, that is, outside the disciplinary investigation and prosecution procedures in Part 5 of the old Legal Practice Act, 1996, and regardless of whether those who otherwise prosecute disciplinary charges would have brought a charge. Under the old Act, a costs agreement could be set aside upon proof by the client of (i) dishonesty in the solicitor, or (ii) misconduct or unprofessional conduct in the retainer, or (iii) a want of fairness and reasonableness of the agreement. Judge Bowman ruled that it was not necessary for the solicitor to be found guilty of misconduct or unsatisfactory conduct in the ordinary way, by a prosecution by a legal regulator under the disciplinary provisionso of the Act before the client could rely on the second ground, but he did say that if misconduct is made out in an old Act case, then no disciplinary consequences such as a suspension of a practising certificate can follow in that hearing. But, armed with the result in the s. 103 application, there seems to be nothing to stop the client sending the reasons in to the regulator and requesting investigation of the conduct already determined to be misconduct by the body which would hear any charge flowing from the investigation. And so, of course, there seems to be nothing to stop the client from threatening to do so in little spats over fees.