Disciplinary costs insurance unavailable to solicitors, for now

Readers of my last post but one would be forgiven for thinking that the cover for costs of disciplinary investigation and prosecution referred to is available to Victorian solicitors as well as for Victorian barristers.  Turns out it is not, for the time being.  Doctors and solicitors are different in that regard.  It would be remiss of me not to mention that that gentleman of the profession, Geoff Gronow, provides invaluable free support to solicitor members of the Law Institute of Victoria who find themselves the subject of a disciplinary complaint in his capacity as LIV Members’ Advocate.  And in Queensland, the Law Society has a scheme which provides free legal advice to solicitors who receive a letter from the Legal Ombudsman or the Law Society in a disciplinary investigation.

I’m sorry for the confusion I must have engendered.  But the interesting thing is that the post obviously struck a chord, to an extent which surprised me and, it would seem, certain others. There are a lot of solicitors who would love to have this cover. Paddy Oliver at Lexcel, a risk management consultancy for solicitors, bemoans lawyers’ abject failure to manage what he refers to as ‘regulatory risk’. Perhaps solicitors are in fact more interested than they are given credit for, but frustrated by a lack of easy fix. So great has the interest been that Affinity had a fresh look at extending the cover to Victorian solicitors, and while it was doing so I held off on publishing this clarificatory post, but it seems that it’s not to be, for now at least.  But if it is an issue that is important to you, tell Affinity that it is something you would purchase, and raise it with Raynah Tang, the (rather good) President of the Law Institute: @livpresident.

I’ll tell you two more reasons why the extension of insurance for investigations is desirable, from long personal experience.  The first is that legal ethics would be given a market economy boost.  Suddenly, there would be an entity with a genuine commercial interest in educating lawyers about their ethical obligations and managing ethical liability risk.  The outstanding work done by the LPLC’s risk management team in the civil sphere would be replicated in the disciplinary.  My view is that ethics education within the profession in Victoria (as opposed to the Academy) is moribund.

The second is this. When I was at Middletons, my practice group used to do a lot of work for solicitors insured by the LPLC.  The kind of work that we specialised in was Legal Profession Tribunal and subsequently VCAT Legal Practice List work.  Frequently, one complaint form would be characterised as a combined disciplinary complaint and what is now called a civil complaint (i.e. a claim for compensation, or a dispute about costs).  There would thus be an insured and an uninsured component.  That is just messy.  Either you have a solicitor representing themselves in the disciplinary side of things and a solicitor paid for by the LPLC handling the civil complaint, or you have a solicitor paying a lawyer they did not choose to do the disciplinary complaint, engendering disputes about what proportion of fees in general, or in the case of a particular bit of work ought to be allocated to the insured and uninsured fees account.  If there were drop-down top-up cover for solicitors, one firm could represent the insured in both sides of things.

Mind you, in the 6 years since I left Middletons, especially after the current Commissioner assumed office, the numbers of complaints being characterised as disciplinary has declined.  In part that is because the courts have held that it is up to the Commissioner to characterise the nature of complaints: Byrne v Legal Services Commissioner [2010] VSCA 162, discussed in this post.  But it is also because Michael McGarvie has concentrated more resources on fewer disciplinary investigations which are considered to be important, in part by being more willing than in the past to allow purportedly disciplinary complaints with a consumer redress flavour to be dealt with by early alternative dispute resolution rather than investigated formally.  So, whereas in the 2010 financial year one in four complaints were characterised as mixed civil and disciplinary complaints, two years later, only one in twenty were so characterised.  The absolute number of complaints characterised as disciplinary complaints has declined markedly too, from three in four to just over one in two (see figure 27, in the 2012 Annual Report).  But don’t relax too much: the decline in disciplinary complaints is probably comprised substantially of silly little complaints which, if you are reasonably competent, you wouldn’t bother making a claim in respect of to an insurer with a $1,000 deductible.  Further, I reckon the price for getting rid of a disciplinary complaint by alternative dispute resolution early on, as is increasingly possible, may well often be financial.  Cut the complainant some slack on the civil side of things — costs generally — and the disciplinary complaint will look after itself.  If the costs of a disciplinary investigation are removed from the mix, these kinds of compromises may not be as necessary.

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2 Replies to “Disciplinary costs insurance unavailable to solicitors, for now”

  1. Thank-you for your recent post commenting on the operations of the Legal Services Commissioner. It is pleasing to see that the changes I have made to the way the regulator handles complaints is being noticed by the profession.

    When I established the Rapid Resolution Team in 2010 the intent was to filter out those complaints which were about service issues and deal with the sticking points quickly. This allowed us to reserve our investigatory firepower for cases which warranted such attention and where disciplinary action was called for. Rather than going through the motions of an investigation into complaints about service and communications issues (for example) we now devote our efforts to trying to resolve these complaints. This has proven to be more satisfactory to the complainant, and importantly it allows the lawyer to preserve a level of control over the outcome of a complaint.

    The other effect of focussing our investigatory effort on fewer cases is that we have been able to increase the number of prosecutions for professional misconduct in VCAT. This past year I made approximately seven times more disciplinary applications than were made in 2009-10, the year prior to taking this new approach. Also the number of applications for failing to correspond with the Commissioner (s4.4.11) has fallen to 10% of what they were in 2009-10, showing that we are having a greater level of success in encouraging lawyers to communicate with my office without taking heavy-handed measures.

    My annual report, which is expected to be tabled in Parliament in September this year, will have more details on complaints, prosecutions and the common issues which consumers have with lawyers.

    Michael McGarvie

    Legal Services Commissioner

  2. More details of the QLS scheme:

    “Queensland Law Society (QLS) provides access to a free legal advice service for its solicitors.

    Solicitors who have received an official notification requesting that they provide information to either the Legal Services Commission or Queensland Law Society as the result of a complaint investigation or trust account matter, can utilise this service.

    This initiative allows members under investigation to seek expert advice for up to three hours from an experienced solicitor with extensive knowledge of professional standards issues.

    The Society has appointed seven experienced solicitors — Ben Cohen of Bartley Cohen, Chris Coyne of Coyne & Associates, Glen Cranny of Gilshenan & Luton Legal Practice, Rob Franklin of Potts Lawyers, Ian Hughes of HopgoodGanim Lawyers, Paul McCowan of McInnes Wilson Lawyers and Margaret McNamara of Thynne & Macartney.

    Fees will be paid by the Society for the first three hours. The members of the Free Legal Advice Panel will be retained by the practitioner seeking the advice and usual duties of confidentiality to the retaining practitioner will apply.

    The free legal advice is confidential and external to the Society.

    This initiative further reflects the Society’s continuing commitment to focus on member services. The aim of this service is to assist solicitors to address the issue in a timely manner instead of ignoring or deferring the initial request for information which then results in the matter escalating. On most occasions, a prompt well considered response resolves the issue, thus saving time and stress for all parties involved in the complaint investigation process.

    The service has the support of the Legal Services Commissioner, John Briton, who acknowledges the importance of timely well considered advice in resolving issues that might otherwise escalate.”

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