Danger lurks in settling a disciplinary complaint against a lawyer

A man hired a firm. Then he hired a new solicitor. He had not paid the fees of counsel retained by the first firm, for which the first firm was responsible for paying to the barrister. The first firm handed over its files to the new solicitor upon receiving an undertaking from the second solicitor that he would pay the counsel’s fees. The new solicitor failed to do so. So the first firm (i) sued him in a court for what amounted to specific performance of the undertaking, and (ii) complained about the failure to meet the undertaking to the NSW Law Society (this was back in 2001). Nine months later, the Society charged the new solicitor with professional misconduct.

The hearing of the court case was listed for 17 January 2002. The new solicitor who was the respondent to the disciplinary charge hired a barrister to represent him at the trial of the civil court case. Through that barrister, the new solicitor negotiated a settlement with the first firm a day or two before the trial. The terms of that settlement got the barrister who negotiated it into trouble: in Council of the New South Wales Bar Association v DKLR [2007] NSWADT 201, NSW’s equivalent of VCAT’s Legal Practice List held the barrister guilty of unsatisfactory professional conduct. The settlement purported to settle not only the civil action, but also to dispose at the same time of the complaint.

To avoid confusion: there were two disciplinary matters. The respondent in the second matter was charged with unsatisfactory professional conduct as a result of his representation of the respondent in the first matter. By negotiating a settlement by which the respondent to the first disciplinary charge promised to pay money to the complainant in exchange for the complainant withdrawing the complaint and advising the Bureau de Spank that he did not propose to give evidence. The barrister for the new solicitor actually made an offer to the barrister for the first firm to pay an extra $2,000 on top of what he was otherwise willing to offer to settle the civil case if the complainant would agree not to give evidence in the disciplinary case. At some stage during the negotiations, the complainant made it clear that if he were subpoenaed by the Law Society, he would obviously have to give truthful evidence, and the Tribunal accepted that that was part of the settlement agreement.

There were terms of the settlement agreement:

‘That you will not swear any further Affidavit nor will you offer to give evidence against [the new solicitor] in the proceedings instituted by the Law Society against him and numbered 012043/01; and

That you will write to the Law Society within seven (7) days after payment of the said sum of $13,000.00 informing the Law Society that the undertaking has now been honoured and that you specifically decline to give evidence in those proceedings and will send a copy of that letter to [the new solicitor] of even date with that to the Law Society.’

The complainant sent a letter to the Law Society which the barrister had approved in draft form. It said:

‘We wish to advise that the undertaking has now been honoured and the writer wishes to withdraw the complaint previously made against Mr Knudsen. If the Law Society of New South Wales wishes to maintain the professional conduct proceedings against Mr Knudsen, the writer declines to give evidence against him in such proceedings.’

The barrister gave evidence that it did not occur to him when he made the offer that he might be obstructing the course of justice. The Bar Council did not submit that the barrister knew what he was doing was wrong, but submitted he should have.

The Bar Council relied on Deacon v ACT (2001) 147 ACTR 1 at [102] for the proposition that for a barrister to discourage a witness from giving evidence is misconduct. That is an interesting decision of Higgins J in which the Government Solicitor objected to a solicitor for someone suing a public hospital interviewing an employee of the hospital as a prospective witness. The Court said that to discourage employees of a party from giving statements as potential witnesses to the solicitor for the counterparty otherwise than on the basis of an enforceable privilege or duty of confidentiality would be to obstruct the course of justice.

The barrister relied on Kerridge v Simmonds (1906-07) 4 CLR 253 at 260 where the High Court said that there is no objection to compromising a claim for private injury resulting from an act which amounts to an indictable offence provided that the offence was not a matter of public concern. But the Tribunal pointed out that there is nothing private about a professional discipline prosecution of a lawyer, the very purpose of which is to protect the public: Smith v New South Wales Bar Association (1992-93) 176 CLR 256 at 270 per Deane J.

The Tribunal’s conclusions were as follows:

’64 The position therefore is that prior to the settlement being agreed, [Mr N, a partner in the first firm] had provided an affidavit to the Law Society in the disciplinary proceedings and was one of the partners of the firm who had lodged the complaint with the Law Society. It would have been correct to describe him as a willing witness. One would have expected him to confer with the Law Society when requested and assist it in the prosecution of the complaint by providing any further information which might be required and any further affidavits which might be required.

65 However after the settlement was agreed, [Mr N] informed the Law Society that he wished to withdraw the complaint. He was no longer a willing witness. He informed the Law Society that he declined to give evidence against [the respondent new solicitor]. He was a party to an agreement which, in the view of this Tribunal had the tendency to cause him to decline any request to confer with the Law Society or provide a further affidavit. By reason of those matters the Tribunal finds that the settlement agreement had the tendency to impair the Tribunal’s capacity to do justice in the proceedings. Accordingly the Tribunal finds that the barrister engaged in unsatisfactory professional conduct by negotiating the settlement agreement. …

66 It is irrelevant that subsequently [Mr N] conferred with counsel for the Law Society and that he may have given the Law Society his fullest cooperation. The barrister’s conduct has to be gauged at the date when the settlement was agreed.’

The Tribunal found that the barrister’s conduct would not reasonably be regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, and so did not amount to misconduct.

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