WA solicitor guilty of unprofessional conduct in “No compensation = No legal fees” ad

Legal Practitioners’ Complaints Committee v SJB [2006] WASAT 201

It is a serious crime in Western Australia to advertise in a way calculated to cause a person make a personal injury claim. A solicitor ran ads headed “Injured in a road accident and made a claim? If so, read on. [footnote: If you have not made a claim, disregard this advertisement.]” A narrow construction of the provision was adopted, consistent with the seriousness of the offence it created, and no breach was found. But not enough was done to explain “No compensation = No legal fees” and the misleading nature of those words amounted to unprofessional conduct as a falling short of the standard of conduct observed and approved by members of the profession of good repute and competence.

A plaintiffs’ personal injury firm advertised in the Yellow Pages and on tv using a formula which said:

“Injured in a road accident and made a claim? If so, read on.* … Your claim will be handled on the basis that:

  • Your first consultation is free — Get expert advice regarding your cliam from a lawyer
  • No compensation = No legal fees — If you do not receive compensation from your calim we will not charge you legal fee …

* If you have not made a claim, disregard this advertisement.”

Three barristers had apparently legalled the ads before they were published. The form of words was a creative but fairly transparent attempt at getting around the provisions of a statute which made it a crime punishable by a fine of $10,000 to publish a statement that may reasonably be thought to be intended or likely to encourage or induce a person to make a claim for compensation or damages for personal injury, s. 17, Civil Liability Act 2002 (WA). Obviously, the ads purported to be pitched at those who had already made a claim, and the prosecutor’s attempt to have the Tribunal read beyond the plain words failed. It had submitted:

“the use of diffferent size and type of font has the effect of minimising the importance of the admonition to disregard the advertisement if a claim has not already been made. The reference to free hospital visist is likely … to attract potential clients who have been recently injured but have not yet made claims. It is also … reasonable to assume that persons who have already made a calim willb e already represented by a legal practitioiner where the advertisement, on an ordinary reading, appears to be directed to persons other than legally represented persons.”

The Tribunal found:

“Section 17 imposes a liability to significant fine for legal practitioners who contravene the section. It makes illegal, and accordingly unprofessional, conduct which, prior to its enactment, was common place amongst personal injury lawyers. The significant conseuqences of the prohibition call for a construction which is no broader than the words used in the section. We find that the advertisements do not breach s 17 of the … Act.”

There was nothing wrong either with the use of the words “Your first consultation is free” because none of the concerns traditionally associated with such representations were present. There was no evidence that there was anything illusory about the first consultations, which expressly promised the provision of expert advice, were not the subject of an unrealistic time limit, and were not charged for if a retainer were put in place at the end of the consultation.

But the words “No compensation = No legal fees” were misleading and:

“In view of the warnings contained within the Law Society guidelines, advertising in this misleading way falls short of the standard of conduct observed and approved by members of the profession of good repute and competence, and is thus unprofessional conduct.”

The solicitor had argued that:

“26 … the majority of claims were settled through negotiations with the Insurance Commission of Western Australia and without legal proceedings ever being commenced. Where proceedings were necessary, [the solicitor] advised that he entered into a fresh retainer with the clients in relation to those proceedings. Accordingly, he asserted that the concerns expressed in the Law Society guidelines had no application to the expression used in his advertisements.”

The Tribunal concluded:

“27 In our view, the expression “no legal fees” would be construed by a member of the public as encompassing more than simply the practitioner’s own fees. In particular, we do not accept that a member of the public would draw a distinction between the legal fees of his or her own practitioner, and legal fees which might be payable to the defendant’s solicitors in the event of an unsuccessful claim. Nor do we consider that a member of the public, who is told there would be no legal fees, would conclude that there might be a liability for disbursements, such as court fees, payable in respect to a claim.

30 In our view, the expression ‘no compensation = no legal fees’ is misleading where they [sic.] appear … The advertisements speak of leaving ‘no stone unturned to ensure your claim is pursued fully and professionally’, and the services being offered clearly contemplate potential litigation. The effect of the advertisement is that a member of the public may be misled into thinking that, by using the practitioner’s services, he or she would have no liability for any fees related to the pursuit of the claims. That person would not anticipate that, if litigation became necessary, a new retainer would be required involving some different exposure to ‘legal fees’ than was advertised.”

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