Lodging a civil complaint with the Legal Services Commissioner limits you to compensation of $25,000 per complaint

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”

Costs disclosure obligations and consequences of not complying: part 1

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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The legislation
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”

Is this the Legal Practice List’s biggest case?

Virgtel Ltd v Gadens Lawyers [2010] 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?”

Disciplinary penalties for pre-2006 conduct

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”

Can you piggy-back the taxation of an old interim bill onto a taxation of a fresh final bill?

Update, 22 February 2012: Another judge of the Queensland District Court has preferred the NSW position over the Victorian position: Golder Associates P/L v Challen [2012] QDC 11 (Samios DCJ).

Update, 14 August 2011: The decision is at odds with decisions of judges of NSW’s and Queensland’s District Courts: Retemu Pty Ltd v Ryan (NSW District Court, Coorey DCJ, 4300/08 and 4301/08, 16/4/10, unreported), which Costs Judge Wood did not follow in the decision which is the subject of the post below (Dromana Estate), and Turner v Mitchells Solicitors [2011] QDC 61 (McGill DCJ), which prefers the reasoning in Retemu to that in Dromana Estate.

Original post: Under the Legal Profession Act, 2004, clients have a year to apply for taxation of their solicitor’s bill.  Before, it was 60 days, but it was easy to get an extension: s. 3.4.38(5).  Now, it’s longer, but it’s harder to get an extension: you have to make an application to a judge in the Practice Court, and the test is stricter.  Section 3.4.37, though, says:

‘(1) A law practice may give a person an interim bill covering part only of the legal services the law practice was retained to provide.

(2) Legal costs that are the subject of an interim bill may be reviewed under Division 7, either at the time of the interim bill or at the time of the final bill, whether or not the interim bill has previously been reviewed or paid.’

In Dromana Estate v Wilmoth Field & Warne [2010] VSC 308, the artist formerly known as the Taxing Master, the Supreme Court’s Costs Court’s Costs Judge Wood, ruled in favour of submissions made by Daryl Williams and supported by Richard Antill of counsel.  They submitted that a client may never, without special permission, have a taxation of a bill more than a year old, even an interim bill sought to be taxed at the same time as a final bill younger than a year.  So there you go: once a year has gone by after the rendering of an interim bill, the solicitor only has to fear an application for leave to tax bills out of time.  Unless of course he or she has failed to comply with any aspect of the disclosure requirements (such as the obligation to give disclosures before or as soon as practicable after retainer, the obligation to update disclosures already given if circumstances change, and the obligation to give pre-settlement disclosure of what the client will get in his or her pocket after costs), in which case the solicitor is not entitled to recover fees, and the client need not pay fees, until the bills have been taxed, presumptively at the solicitor’s costs: s. 3.4.17.  The sombre solution for the solicitor, in that case, is to apply for taxation of his or her own costs under s. 3.4.40.  There is no time limit under the Legal Profession Act, 2004 for doing so.

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”

Legal professional privilege and disciplinary complaints by non-clients

If you are a solicitor and someone other than your client or former client has lodged a disciplinary complaint against you in Victoria, you should not disclose the subject matter of any communications to which legal professional privilege attaches, or might arguably attach, unless you are instructed to do so by your client or former client. Nor should you give up any document which records such a communication, or disclose any communication which tends to reveal the content of a privileged communication.

That is so even if the Legal Services Commissioner purports to compel the information, for in the case of investigations of non-client complaints, the client’s or former client’s privilege trumps the Commissioner’s powers of compulsion.  If you have already disclosed privileged communications, assuming that the Commissioner had the power to compel you to do so, you should be aware that the disclosed communications may well still be privileged notwithstanding the disclosure to the Commissioner, and so unable to be used against you in a disciplinary prosecution arising from the investigation, and you should probably advise your client or former client.

Until recently, the Commissioner took the view that legal professional privilege was impliedly abrogated in the case of non-client complaints by necessary intendment of the Legal Profession Act, 2004.  Not so.  The reasons why follow below.  These propositions are good law in VCAT’s Legal Practice List, at least.

Remember that it is still the common law which regulates legal professional privilege for the purposes of Legal Services Commissioner investigations and (except to the extent that it adopts the Evidence Act, 2008 in any particular proceding) in VCAT’s Legal Practice List. Continue reading “Legal professional privilege and disciplinary complaints by non-clients”

The Tax Man and the Law Institute, round III

In Deputy Commissioner of Taxation v Law Institute of Victoria [2010] VSCA 73, the Court of Appeal unanimously overturned the trial judge’s decision in Law Institute of Victoria Limited v Deputy Commissioner of Taxation (No 2) [2009] VSC 179, which I posted about here.  I posted about round 1, before that, here.  Justice of Appeal Mandie, with whom the other judges agreed, said that the documents were ‘innocuous’ and suggested that they would not have attracted public interest immunity even had the Law Institute argued that the nature of their contents was so secret and sensitive that the public interest in keeping them secret outweighed the public interest in protecting the revenue for which the Tax Man wanted them.  But the situation was worse than that for the Law Institute, according to his Honour.  The Law Institute argued in favour of public interest immunity on the basis that the documents were part of a class of documents so secret and sensitive that they should be protected irrespective of their contents.  ‘Bollocks’ said the Court of Appeal. Continue reading “The Tax Man and the Law Institute, round III”

NSW Court of Appeal on difference between ‘professional misconduct’ and ‘unsatisfactory professional conduct’

The distinction between ‘professional misconduct’ and ‘unsatisfactory professional conduct’ is usually elusive.  Guidance from an appellate court in relation to cognate legislation is therefore valuable.  It seems that one instance of ‘incredibly sloppy’ work involving innocent false representations being made to the other side, if it is comprised of a series of closely related bits of conduct in relation to the one matter, is not what is contemplated by the words ‘substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence’.  CYX v Council of the Law Society of NSW [2009] NSWCA 430 (previously blogged here) is a decision I regard as indicating an appropriately restrictive approach to identifying ‘professional misconduct’, a finding which should carry with it the opprobrium associated with the worst professional wrongs.  The NSW Court of Appeal overturned a finding by New South Wales’s Administrative Appeals Tribunal’s of professional misconduct. Continue reading “NSW Court of Appeal on difference between ‘professional misconduct’ and ‘unsatisfactory professional conduct’”

The concurrent operation of the new Evidence Act, 2008 and of the Legal Profession Act, 2004

Section 8 of the Evidence Act, 2008 says it does not affect the operation of the provisions of other Acts.  So, although the compellability and competence provisions and the admissibility provisions of the new Act are often spoken of as a code, those who say so are thinking about the continuing operation of the common law, rather than statute law on the subject which survives the legislative change consequent upon the enactment of the new Act.  That caused me to look through the Legal Profession Act, 2004 with a view to finding out how the law of evidence in cases involving lawyers might differ from that to be found in the new Act.  I found that it:

Commissioner’s obligation to charge dishonesty if he intends to allege it

Relatively recently, I posted on the question of whether a Bureau de Spank desiring to rely on a practitioner’s dishonesty or other form of conscious wrongdoing must expressly allege it in the charge, and discussed Walter v Council of Queensland Law Society Incorporated (1988) 77 ALR 228 at 234; [1988] HCA 8.  Now, in Legal Services Commissioner v Madden (No 2) [2008] QCA 301 the Queensland Court of Appeal has had a go, and reversed a decision of the Court’s Chief Justice sitting on the Legal Practice Tribunal.  The solicitor had previously been disciplined in relation to his trust account.  He was charged with gross delay in litigation which resulted in applications by the other side to compel the achievement of various interlocutory steps.  He dealt with those applications without advising his client, agreed on his client’s behalf to pay costs, withdrew money to pay those costs from monies held in trust on account of fees and disbursements, and then charged the client fees for his work in fixing up his own mistake.  He also acted for both husband and wife in the preparation of a pre-nup, apparently stuffing it up, and then later acted in a matrimonial dispute for the husband alone, described as a particularly obvious conflict of duties.

The Chief Justice made findings of dishonesty in the absence of any allegation of dishonesty in the charge.  One might say, in fact, that he went out of his way to do so.  First he sought comment in relation to whether on the agreed facts, the Tribunal was free to draw inferences that dishonesty actuated the solicitor’s conduct, and invited the Commissioner to amend the charge so as to allow exploration of that issue.  His Honour adjourned the hearing to give the Commissioner time to think about that. On the return of the hearing, the Commissioner declined the invitation to amend.  So the Tribunal put out a document specifying, as a matter of procedural fairness, the inferences it was considering drawing, and invited argument.  The solicitor swore an affidavit responding to the Tribunal’s document.  The Commissioner’s counsel cross-examined the solicitor, but did not put it to him that he had acted dishonestly. The Tribunal then concluded that the solicitor had acted dishonestly, and decided to strike him off rather than go with the fine and reprimand recommended by the Commissioner.  Ooffa!

‘Wrong way. Go back!’ said the Court of Appeal.  It started with a general proposition:

’54 It is … a well recognised rule of practice in civil proceedings that, although the word “dishonesty” is not necessarily required, any charge of dishonesty must be made in clear terms.  In a well known passage in Belmont Finance Corporation Ltd v Williams Furniture Ltd & Ors [1979] Ch 250 at 268  Buckley LJ said: Continue reading “Commissioner’s obligation to charge dishonesty if he intends to allege it”

Ombudsman carries out own-motion investigation of Legal Services Commissioner

A former client of mine, dissatisfied with the adverse outcome in a complaint he lodged making serious allegations against a senior member of the profession has tipped me off to an own motion investigation conducted into the Bureau de Spank by the Victorian Ombudsman.  The results, reproduced below, will not assist morale at the Bureau (compare his excoriation of the migration agents’ Bureau).  But solicitors can expect, I suppose, for the investigation process to become a bit more investigative than the gentlemanly exercise it has been as long as I can recall, and for more prosecutions to be brought.

In the hierarchy of regulators, I doubt that the Legal Services Commissioner is a particularly desirable post, but it should be.  Regulate the lawyers diligently, and the scope for all the others’ wrongdoing which the other regulators regulate is likely to be retarded.  It should also be desirable because it would be fun: the Commissioner doesn’t have to worry about the privilege against self-incrimination, and at least in complaints brought by former clients, can cruise past the usual irritant to pious investigators, legal professional privilege.  Imagine an investigation where you can gun for fines of $50,00o per offence, or the inherently spectacular thrill of seeing a lawyer fall from his perch with the wonderfully archaic fanfare of being struck from the rolls, but where you can essentially administer as many interrogatories as you like.  And imagine that default in answering the interrogatories is a crime the investigation of which is to be carried out by an investigator you personally get to choose in your capacity as head honcho of the Legal Service Board!  It should be enough to make an investigator pant with excitement.  Many a federal policewoman would probably give up her taser in exchange for these kinds of powers.

Continue reading “Ombudsman carries out own-motion investigation of Legal Services Commissioner”

Offences created by the Legal Profession Act, 2004

Note: I drafted this post last financial year.  Since then, the value of a penalty unit increased today by about 3%, to $116.82, with the result that the dollar figures referred to below will be commensurately too low.  See the details at Quis Custodiet Ipsos Custodes.

Original post: I acted for a fellow whom the Law Institute as delegate of the Legal Services Board was purporting to investigate, and noticed for the first time what a rich repository of crimes is the Legal Profession Act, 2004. Two are punishable by imprisonment of up to 5 years or more: s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and s. 5.5.15 (interfering with property to defeat a receivership of a law practice). A third, s. 2.2.2(1) (unqualified practice) is punishable by up to 2 years’ imprisonment respectively. Eight are punishable by fines of up to about $27,000, about 25 by fines of up to about $13,500, about 57 by fines of up to about $7,000, and another 14 by fines of between up to about $500 and about $2,500. That’s over 100 crimes.  As far as I know, the only conviction is likely to have been under s. 3.3.21.

All of the offences punishable only by fines are summary offences: 600 penalty units (a fine of about $68,000) and imprisonment for up to 5 years being the level of seriousness which brings offences into the indictable category: see s. 112 read with s. 109 of the Sentencing Act, 1991.  So s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and 5.5.15 (interfering with property to defeat a receivership of a law practice) appear to be the only indictable offences created by the Act.  They may be prosecuted at any time, while all those punishable by fines, and unqualified practice, are summary offences which may generally be prosecuted only within 12 months after the allegedly criminal conduct occurred, by virtue of s. 26(4) of the Magistrates’ Court Act.  Do not allow an investigator under the Legal Profession Act, 2004 to investigate a summary offence if the conduct allegedly occurred more than a year beforehand!  (Whether the Legal Services Commissioner may entertain a disciplinary complaint more than a year after the relevant conduct is a more difficult question. See this post.)

I really wonder about the social utility of having all those crimes there. Continue reading “Offences created by the Legal Profession Act, 2004”

VCAT explores definition of professional misconduct at common law unconnected with legal practice

In Legal Services Commissioner v RAP [2009] VCAT 1200, the Bureau failed to establish a charge of professional misconduct at common law against a solicitor in respect of conduct which occurred otherwise than in the course of, and unconnected with, legal practice.  (Another charge, not the subject of this post, succeeded.) The allegation was that he:

‘deliberately misled a person with whom he had entered into a commercial transaction, thereby behaving in a manner that would reasonably be regarded as disgraceful or dishonourable by fellow practitioners of good repute and competency’.

The solicitor had negotiated in late 2005 with a car dealer for the purchase of a $1.4 million [sic.] car. Continue reading “VCAT explores definition of professional misconduct at common law unconnected with legal practice”

Informal service of lawyers’ bills

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”

Links to the states’ and territories’ Legal Profession Acts

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”

From when can solicitors claim interest on an unpaid bill?

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?”

60 days for referring pecuniary loss disputes to VCAT extendable

I was reminded when reading Sibonna Nominees v R Legal [2009] VCAT 893 that the 60 day period after the Bureau de Spank gives a punter a ticket under s. 4.3.7 of the Legal Profession Act, 2004 to enter VCAT for adjudication of an unresolved civil complaint of the species ‘pecuniary loss dispute’ is extendable under s. 126(1) of the VCAT Act, 1998 (‘[VCAT], on application by any person or on its own initiative, may extend any time limit fixed by or under an enabling enactment for the commencement of a proceeding.’)  Well, to be honest, which I’m trying to be more and more, ‘reminded’ is a euphemism.  Anyway, sitting there, just behind s. 127 which I have been skirmishing about in VCAT just this week, lay s. 126.  No doubt I should have known about it, but the reason I did not is interesting.  No one does what Sibonna Nominees was doing any more.  These kind of ‘pecuniary loss disputes’ in the old Legal Profession Tribunal were my bread and butter for a while, when I was a solicitor.  Now, punters generally just go under the Fair Trading Act 1999‘s consumer and trader dispute jurisdiction: s. 107ff. Continue reading “60 days for referring pecuniary loss disputes to VCAT extendable”

Statutory powers of compulsion to be invoked reasonably

Justice Pagone considered the Commissioner of Taxation’s invocation of a power to compel the production of documents and information (s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth)). In this case, the subject of the compulsion was the Law Institute, more used to flinging such powers around itself.  Legal regulators not infrequently list poorly formulated allegations drafted by angry laypeople and then requiring ‘a full written response’ from lawyers.   Sometimes, requiring a ‘full written response’ is specifically contemplated by statute (e.g. s. 4.4.11(1)(a) of the Legal Profession Act, 2004, which is about investigating disciplinary complaints) but sometimes it is not (e.g. s. 7.2.7 of the same Act, which relates to investigations of offences against the Act).  If the response is not ‘full’ in the way the regulators think about ‘fullness’, the respondents risk being convicted of the crime of non-cooperation (seriously: see s. 7.2.7(1)).  His Honour cautioned regulators and said they must use such powers ‘wisely and responsibly’: Continue reading “Statutory powers of compulsion to be invoked reasonably”