Stephen Warne on professional negligence, regulation and discipline around the world

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2016: not such a good year (part 2: deaths)

February 1st, 2017 · No Comments

The Hon. Alan Goldberg AO, QC, portrait by Jacqueline Mitelman

Lots of unfamous people died horrible deaths last year: see part 1, and more to come. But more than the average number of famous pulses seemed to flatline in 2016. The grim reaper took a few big scalps prematurely: Max Walker at 68, David Bowie at 69, Prince at 47, the Beastie Boys’ John Berry at 52, and George Michael at 53. You could say that Brangelina karked it too.

Then there were the other cultural icons who shuffled off: [Read more →]

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2016: not such a good year (part 1: Iceland, Syria)

January 31st, 2017 · No Comments

‘Your turn, doctor’

I had a lovely time last year, but for many, 2016 was not such a good year,[1] even if they were fooled by propaganda and fake news into thinking it was. If you want to see how the other half lives, check out Médecins Sans Frontières’s photographic recap of 2016.

Pulses It was a great year if you were an Australian chickpea grower though. The excitement of living through the International Year of the Pulse is unlikely to be repeated during anyone’s lifetime, but the record harvest must have really pumped our growers’ yams. They harvested a million tonnes of chickpeas, and had a record breaking million hectares under cultivation, about the size of Sicily. Who knew? Production was very poor in the sub-continent and prices for pois chiche / gram / chana / hummus / garbanzo bean / falafel precursor, cultivated these past 7,500 years at least, skyrocketed to more than $1,250 a tonne. There are a lot of sub-continentals, (more about that later), and they eat a lot of chickpeas because (some people estimate) India alone has half a billion vegetarians: more than the rest of the world combined.

As we will see, the real pulse was that of the underdog and the white working class. Or at least so the conventional narrative goes, since it remains to be seen whether Trumpland will see factory workers making large American cars again and whether the grandchildren of Kentish publicans will take back the real English ale taps from the Poles and Czechs.

Not in Iceland, though, where following remarkable elections in the wake of the Panama Papers’s revelations, the Pirate Party, with their unique mode of populist appeal, was invited to form government but couldn’t manage it. So the conservatives are back in power notwithstanding that the Prime Minister was the most prominent scalp of the Papers.  Bet you didn’t know that Birgitta Jonsdottir who would be its leader if the Pirate Party had a leader used to live in Forest Hill but quit Australia in light of the indignities associated with the application for citizenship.

The Panama Papers were interesting: nothing like 11.5 million privileged documents of a law firm with lots of clients in tax havens to excite the Australian Professional Liability Blog.  We learnt that Bashar al-Assad probably funded his war against his own people by having Mossack Fonseca set up up front companies in the Seychelles through which international sanctions were evaded. And that he purchased £6million worth of luxury London real estate while his people endured one of the agonies of the millennium.

And nor did the underdog prevail in Syria either, after ISIS corrupted the purity of the Arab Springers and Russia rushed in to defeat ISIS, whatever the collateral cost. The rebels were crushed, providing for a historically unsatisfactory maintenance of the status quo after the slaughter and displacement and economic obliteration of an entire state.  Remember, it all started when Dr Assad’s world-class goons tortured some schoolboys for scrawling ‘Your turn, doctor’ in red paint on a Daraa wall at a provocative point in the falls of middle eastern despots in the Arab Spring.  According to the foundation lore of the rebels, ‘They forced [one schoolboy] to sleep naked on a freezing wet mattress, they strung him up on the wall and left him in stress positions for hours, and they electrocuted him with metal prods.’ When one of the kids’ dads objected to Dr Assad’s cousin, he was told to ‘forget about their sons, and consider having new children’ and if that failed, he was supposedly told, then the fathers should send their wives to the police station to be impregnated by the security forces.  These events are part of the narrative of the excellent re-telling of of the story of Doaa Al Zamel, a girl from Daraa who fled to Egypt and thence to Sweden on a smuggler’s boat on which hundreds drowned: A Hope More Powerful Than the Sea.  I commend it to you as a personal experience of the Syrian uprising, the precursor to today’s more complicated civil war and of the decision to flee by smuggler and of the horrific passage.

Syria  I am so glad I was not in Syria and not a Syrian in 2016. The great powers other than China played out a proxy war with Russia ramping up its cowboy intervention, a war which, it is estimated, has produced about 11 million refugees — 6 million inside Syria and about 5 million who have fled to neighbouring countries. Since the US was supporting the anti-Assad forces which are not ISIS, that means that despite everyone pretending to be battling ISIS, Russia and the US were in fact at war with each other last year. [Read more →]

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Transferring monies from trust to pay legal fees: can a client stymie an accrued right to appropriate fees by a late objection to the transfer?

December 23rd, 2016 · No Comments

Say you’re a solicitor.  You send a bill to your client noting your intention to pay it from monies in your trust account held for the client.  Seven days go by and there is no objection to the transfer.   Say at this point you have a perfectly good entitlement to appropriate your fees from trust.  But you don’t get round to transferring the money on the 8th day.  And then the client objects to the transfer, belatedly. Can the solicitor ignore the out of time objection and transfer the money?   [Read more →]

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Lessons from a tome in the dome on the assignment of suits’ fruits

December 23rd, 2016 · No Comments

Cruelly, the Legal Services Commissioner prosecuted my client recently for disbursing monies from his trust account to the wrong person, albeit without the slightest dishonest intent, which he said would be regarded by competent and reputable peers as disgraceful or dishonourable.  I say ‘cruelly’ because he made me go to the Supreme Court Library, and read impenetrable equity texts in its dome for hours.  I read the most obscure article I can ever remember reading: P G Turner’s ‘Assignment by Way of Charge’ (2004) Australian Bar Review 280.

The Commissioner said the solicitor’s client had assigned in equity the proceeds of their claims against negligent drivers for the cost of repairing their vehicles.  The assignee was said to be the repairer’s factor.  When the monies came into my client’s trust account, they were said to be ‘charged in equity’ (‘charged in law’ as well in fact, which I never got to the bottom of), such that the solicitor was obliged to pay them not to his client but to the assignee-chargor.  The Commissioner backed down from this claim in the end, but not before I had burrowed into the law.  Harsh.

In this post I gather together some law about assignment of choses in action.  Nothing new.  Just a summary of the law in case you are as ignorant of its nuances as I was before I hit the equity tome in the dome.  The most thorough texts are Heydon, Leeming and Turner Equity Doctrines and Remedies (2015, Lexis) and the superbly written The Law of Assignment by Marcus Smith and Nico Leslie (2013, OUP).

The reason this post is easier to understand and a great deal shorter than either book is that it does not deal with the many exceptions and uncertainties associated with the below propositions, and looks only at the law of Victoria.  And it ignores the Personal Properties and Securities Act 2009. You’d better look up the law yourself if you need to.  What follows might help you make sense of it though. [Read more →]

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Too broad a range of estimates of total costs causes NSW solicitor great grief

November 30th, 2016 · No Comments

Frontier Law Group Pty Ltd v Barkman [2016] NSWSC 1542 is an ex tempore decision of Justice Slattery in an urgent application to extend the operation of a caveat lodged by solicitors over their client’s property.  The application failed in part because the solicitors did not prove, even to the prima facie level required in such an application, that the money said to be owing and secured by the equitable charge which was the subject of the caveat was in respect of fees invoiced under the costs agreement referred to in the caveat.  That is not particularly interesting except as schadenfreude.

Two things are interesting though, given that the costs agreement was probably entered into in 2012 and so the Legal Profession Act 2004 (NSW) almost certainly applied (even though the Court looked also at the situation under the Legal Profession Uniform Law (NSW)):

  • First, the Court found that the range of estimates of total legal costs was so wide as not to comply with the relevant disclosure obligation.
  • Secondly, the Court appears to have treated the extension application as the commencement of proceedings for the recovery of legal costs, such that the statutory preconditions to such proceedings needed to be, but were not, proven to be satisfied by the lawyers.

I cannot think of another authority which states so plainly that some estimates are so imprecise as to render them non-compliant with the obligation to give a range of estimates of total legal costs.  But now we have it: a decision of the Supreme Court of NSW under a legislative scheme of which Victoria is also a part and which is likely to be followed as a matter of comity in Victoria.

What the Court said is: [Read more →]

→ No CommentsMore articles on: Costs agreements · costs disclosure defaults · Professional fees and disbursements · Solicitor client bills of costs · The suit for fees

$5,000 fines in lawyers’ disciplinary prosecutions

November 22nd, 2016 · No Comments

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:

[Read more →]

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NSWCA surveys fines in NSW lawyers’ discipline decisions over a decade

November 14th, 2016 · No Comments

Russo v Legal Services Commissioner [2016] NSWCA 306 was the subject of my previous post. The Court engaged in a comparatively sophisticated review of disciplinary outcomes in like cases.  The purposes of this post is to reproduce that review and comment on the variables which ought to be taken into account in any proper survey of past outcomes.

To survey penalties in like cases has always been an important part of sentencing and should be an important part in imposing disciplinary sanctions.  Barbaro  (2014) 253 CLR 58; [2014] HCA 2 and Cth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 do not suggest to the contrary.  They say that the purpose of a survey of like sanctions is to promote consistency in penalties but not the establishment of a range of available sanctions deviation from which is appellable.  Buchanan JA observed in R v Macneil-Brown [2008] VSCA 190, (2008) 20 VR 677 at [130]:

‘counsel can best assist a sentencing judge, not by advancing what they consider to be sentences at the lower or upper limits of a sound sentencing discretion, but by making submissions as to the existence and nature of aggravating and mitigating circumstances and providing some guide to the manner in which other judges have approached like cases by supplying sentencing statistics and citing passages from decided cases which bear upon aspects of the instant case.’

I would submit that any survey of fines as a disciplinary sanction must take into account, as an important aspect of the analysis, the financial situation of the person or persons liable to pay it.  The specific deterrence of a fine will vary greatly from one practitioner to another.  Practitioners who struggle, for personal reasons, are more likely to get themselves into trouble in the first place, and to exacerbate it by less than perfect intercourse with the Legal Services Commissioner.  Their financial situations often deteriorate too.  Specific deterrence may be achieved by imposition of a fine much smaller than would be imposed on a flourishing practitioner raking it in.  General deterrence will also be achieved if the Tribunal is transparent in taking account of financial circumstance.  In such a case, the Tribunal might indicate the kind of fine which might have been imposed had the practitioner enjoyed an average post-tax income.

Furthermore, the costs burden borne by the practitioner ought also to be taken into consideration.  Costs and fine are inter-related in this way: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [88] (Kirby J speaking for the Court) applied by analogy in LSC v Bechara [2009] NSWADT 313. The extraordinary costs practitioners are liable to in Victoria following disciplinary prosecutions would very often be more than adequate to achieve specific and general deterrence.  If you are prosecuted and reprimanded, made the subject of an editorial on the front page of the Commissioner’s website, and have to cough up $40,000 in unrecoverable solicitor-client costs reasonably incurred and costs liability to the Legal Services Commissioner, that is going to make you think just as hard about doing it again as any comparatively trivial fine you might cop.

Finally, one must be astute to inflation.  In my experience, people tend to exaggerate the effect of inflation when considering older fines.  Here is a calculator which assists in measuring in today’s dollars a fine imposed some years ago.

For some reason, notwithstanding that NSW is now a part of the legal profession uniform law, the other participant in which is Victoria, no Victorian fines were part of the survey.  That strikes me as unusual, since there is a whole statutory office the purpose of which is to promote interstate uniformity in the application of the Uniform Law: the Commissioner for Uniform Legal Services Regulation.  Russo’s Case was decided under the old legislation which the LPUL replaced, and which legislation in fact governed the prosecution was one of the issues on appeal.  Interestingly, apparently because it was thought that there were no relevant differences between the two regimes, that question was not decided.

This is what the NSWCA said about its survey of fines, and about the appropriate fine in this case: [Read more →]

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NSW solicitor who didn’t pay counsel’s fees struck back on

November 13th, 2016 · No Comments

Salvatore Russo, a solicitor of 29 years’ standing, was struck off NSW’s roll of solicitors on 16 April 2016 by NCAT.  He had received payment from his client for counsel’s fees but not paid counsel for years. Then he was high-handed in response to the client’s entreaties when counsel sued the client directly.  The Court of Appeal found a denial of procedural fairness by NCAT.  The Tribunal had telescoped the questions of liability and penalty into one hearing.  It had failed to give Mr Russo sufficient notice of the fact it was considering striking him off despite the fact by the end of the trial, the Commissioner was not seeking such an outcome any more. Now he’s been struck back on by the NSW Court of Appeal, a fine of $20,000 substituted for his misconduct: Russo v Legal Services Commissioner [2016] NSWCA 306.  (In fact, the striking off never came into operation, because he got a stay along the way.) [Read more →]

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Legal Services Commissioner’s new decision making powers

October 11th, 2016 · No Comments

The Victorian Legal Services Commissioner has published a report on his new proactive regulation of the profession.  It tells how risk profiles of practices are being constructed with the assistance of academics to target trust audits and audits of firms more generally (a new thing for law practices which are not ILPs).  It also tells about the exercise of the power to make binding decisions, and alerted me to the fact that the Commissioner now publishes redacted versions of costs determinations at this page. The report says: [Read more →]

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D3 and D4 settle with P and take over P’s case against D1 and D2 (-not)

October 7th, 2016 · No Comments

Taylor v Hobson [2016] QSC 226 is a strange old case. Plaintiffs sued defendants for damages alleging they had been misled into purchasing a business.  They sued the vendors and the vendors’ solicitors, alleging that each of the vendors and the solicitors had made misleading representations.  The solicitors (through their insurer) settled with the plaintiffs.  The solicitors promised to pay  a settlement sum to the plaintiffs and the plaintiffs promised to let lawyers appointed by the solicitors’ insurer act for them and run the plaintiffs’ case for them, with a view to recovering damages from the vendors and giving those damages to the solicitor defendants.  It was a creative form of litigation funding, if you will.  But it was a bit too creative for the Supreme Court of Queensland.

The insurer was to appoint new solicitors, not the solicitors which had been representing the solicitor defendants in the proceeding.  Nevertheless, the Court stayed the case as constituting an abuse of process for so long as the defendant-appointed solicitors were running the plaintiffs’ case.  The parties to the settlement might now amend it so as to remove the element of control over the plaintiffs’ case, therefore. The case may continue, and that aspect of the settlement deed which required the plaintiffs to give to the solicitor defendants the proceeds of their claim against the vendors might still have its operation.

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