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No term implied into retainer to comply with the Legal Practice Act, 1996

I have always been curious about the extent to which a term might be implied into a retainer giving contractual force to the rules of conduct whether found in rules of the Law Institute or found in the regulatory Acts.

In Equuscorp Pty Ltd v Wilmoth Field Warne (No 3) [2004] VSC 164, Byrne J said at [101] that it was not open to the plaintiff to contend that a breach of s. 174 of the Legal Practice Act, 1996, which governed the withdrawal of moneys from solicitors’ trust accounts, constituted a breach of an implied contractual term in a particular retainer to comply with the Act.

He suggested, in the same paragraph, that a party who wishes to rely on the solicitors’ professional conduct rules ought to adduce them into evidence.

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That goddam dictum of Denning about file notes and conflicts of evidence

Many a smug lawyer has grinned at me across a mediation table and trotted out some version received by Chinese whisper of Lord Denning’s typically over-reaching dictum in his dissenting judgment in Griffiths v Evans [1953] 1 WLR 1424 at 1428; [1953] 2 All ER 1364 at 1369 said to prove conclusively that the absence of a file note is a slam dunk for the plaintiff in any contest of evidence between solicitor and client. The dictum was confined to disputes as to retainers; it harks from a species of cases decided long ago on affidavit and not oral evidence; and it is at best a reflection of the public policy in favour of the formality of legal relationships than a principle of evidence. So say the judges in the cases extracted below. Continue reading “That goddam dictum of Denning about file notes and conflicts of evidence”

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Fiduciary duties and the sophisticated client

Gee do plaintiffs adore sprinkling a bit of fiduciary duty action into their pleadings against solicitors. Their counsel see it as moon dust. A sophisiticated plaintiff (who had been party to separate litigation which eventually culminated in a High Court case about contractual certainty) tried it on in a somewhat novel way in Equuscorp Pty Ltd v Wilmoth Field Warne (No 3) [2004] VSC 164 but bombed out before Justice Byrne. Continue reading “Fiduciary duties and the sophisticated client”

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VCAT construes Legal Profession Act’s transitional provisions: “matter”

Alessi’s Appeal [2006] VCAT 1714

What could be more exciting than 8 pages of closely typed reasons for decision about a jurisdiction challenge based on fine dissection of the transitional provisions in the Legal Practice Act, 2004? If that pumps your yams, read on. Sub-clause (2) of clauses 8.2 and 8.3 of the transitional provisions provide that if a matter was pending in the Legal Profession Tribunal on 12 December 2005, then VCAT is to hear and determine it as if it were a proceeding commenced in VCAT, and the repealed old Act continued to apply in respect of the matter (both substantively and procedurally). The Clients said an appeal was a new matter, and since no appeal was pending on 12 December 2005, the fact that the decision appealed against was pending on that day did not attract the operation of the transitional provisions. The Clients unsuccessfully argued that the only right of appeal against decisions made in matters pending on 12 December 2005 but determined after that date was under the VCAT Act, 1998, to the Court of Appeal. A three member panel of VCAT configured similarly to the old Full Legal Profession Tribunal (Judge Bowman, a solicitor member and a lay member) decided it had jurisdiction. The “matter” was the application to set aside the costs agreement, the ancillary matter of the costs of those proceedings, and any appeals from the substantive decision or the costs order. Since that matter was pending on 12 December 2005, the transitional provisions were attracted, and the Legal Practice Act, 1996‘s procedure for appeals in applications to set aside costs agreements applied, so that the bench of three VCAT members had jurisdiction to hear an appeal according to the procedures of the old Full Legal Profession Tribunal. Continue reading “VCAT construes Legal Profession Act’s transitional provisions: “matter””

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Common issues with another case in another place a factor in favour of dismissal under s. 136A, Legal Practice Act, 1996

J’s Case [2000] VLPT 3

This decision may stand tenuously for the proposition that the factors favouring dismissal of a dispute under the Legal Practice Act, 1996 on the basis that it would be more appropriately dealt with by a court include the existence of factual disputes common to that dispute and another dispute being heard by another court or tribunal. But it is clear that it was an incidental consideration in the decision to dismiss the dispute. Continue reading “Common issues with another case in another place a factor in favour of dismissal under s. 136A, Legal Practice Act, 1996”

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VCAT has no jurisdiction over Family Court fee disputes

VCAT does not have jurisdiction over costs disputes in relation to Family Court cases or to state Magistrates’ Courts exercising the Family Court’s jurisdiction (except to the extent it is exercising jurisdiction under ss 35 or 35B of the Bankruptcy Act, 1966), but does have jurisdiction in relation to costs disputes in relation to Federal Magistrates’ Court proceedings under the Family Law Act, 1975. Continue reading “VCAT has no jurisdiction over Family Court fee disputes”

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Legal Profession Tribunal not bound by doctrine of precedent

If authority were needed for this proposition, it is to be found in B’s Case [2004] VLPT 8 where Mr Howell said:

“a member of a tribunal is not bound to follow a decision of a tribunal made by a member of the same standing. Of course, the previous decision should be carefully considered, and it might be regarded as persuasive and followed, but in the interests of certainty in the law it should not be followed if it is clearly wrong. The aim is to correct errors, not to perpetuate them. If it becomes necessary to resolve a conflict between different decisions, that conflict can be resolved by an appeal, or by a decision of a superior court or tribunal in another case, or by amending legislation.”

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Winner gets indemnity costs but recovers less when loser proves winner’s costs agreement with his solicitors void

Casey v Quabba [2006] QCA 187

As reported in Lawyers Weekly, the Queensland Court of Appeal said the trial judge should have allowed the unsuccessful party in litigation to call for and challenge the validity of the successful party’s costs agreement with his solicitor in a party-party taxation of costs on an indemnity basis. Further, the judges found the successful party’s costs agreement was void for failure to specify the minimum requirements fora costs agreement, and ordered the costs to be taxed on the basis that there was no valid costs agreement (presumably by reference to the court scale). Don’t get too excited though; the case turned in part on the facts that (i) the taxing officer was directed by the rules of court to have regard, in indemnity costs taxations, to the costs agreement of the successful party, and (ii) the purpose of the Queensland provision was not only to benefit the client party to the agreement, but also to protect third parties affected, such as those against whom costs orders are made.

But I do wonder whether any thought was given by the successful party and the solicitors hastily putting together a valid agreement with retrospective operation. I can see no reason why it should not work.

Continue reading “Winner gets indemnity costs but recovers less when loser proves winner’s costs agreement with his solicitors void”

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Disciplinary tribunal can’t find misconduct by commission of crime

Legal Practitioners Conduct Board v Ardalich [2005] SASC 278

A solicitor suffered from what used to be known as “manic depression“. He had been charged with criminal offences of forgery but not convicted on mental grounds. The South Australian Legal Practitioners Disciplinary Tribunal heard charges that the solicitor was guilty of misconduct in having committed different crimes which had never been prosected. The Full Court of the Supreme Court of South Australia held that the Tribunal had over-reached itself in purporting to make findings about the commissions of crimes by the solicitor, but said that acts (admitted by the solicitor) that would be criminal unless met by the defence of insanity were enough to warrant a finding of unprofessional conduct, the purpose of which was not the punishment of the solicitor but the protection of society. So the Full Court struck him off the roll of practitioners. (See also the previous post).

Continue reading “Disciplinary tribunal can’t find misconduct by commission of crime”

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Insanity not a defence to professional discipline proceedings

Legal Practitioners Conduct Board v Ardalich [2005] SASC 278

The solicitor referred to in the next post could not escape a finding of unprofessional conduct because of his mental state, even though the species of unprofessional conduct alleged against him was the commission of serious criminal offences to which insanity was a defence. The South Australian Court of Appeal explained: Continue reading “Insanity not a defence to professional discipline proceedings”

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Proposed amendments to the Legal Profession Act, 2004 (Vic.)

Here is the bill proposing the second round of amendments to the Legal Profession Act, 2004 (Vic.), the Justice Legislation (Further Amendment) Bill, 2006 (Vic.). There are substantial changes to practising certificates and costs disclosure requirements on which I will report when I have digested them.
And the second draft of the National Model Provisions has been released by the Law Council (if you follow the link you need to scroll to the bottom of the page). I got a bit worried when I heard that there was going to be a renumbering of the Acts, but apparently everyone else is going to follow Victoria’s numbering so I will continue to beaver away at understanding the complexity occasioned by the simplification process.

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No issue waiver of 2nd solicitor’s advice on regretted settlement made necessary by 1st solicitor’s negligent advice

Banjo (NT) Pty Ltd v Ward Keller Pty Ltd [2006] NTCA 1

A tenant alleged its solicitors gave it bad advice on its obligations under a lease which led to it losing the chance to renew the lease. It said it got a new lease, but in order to do so, had to settle disadvantageously a claim for damages for breach of the lessor’s duties to repair. By the time of that negotiation it had taken the advice of its new solicitors. But for the disadvantageous negotiating position it had been put in, it said, it would have pursued the claim for damages for the lessor’s breach and would have won. In the suit against the first solicitors for compensation for loss of the opportunity to sue for damages for that breach, the NT Court of Appeal said it did not have to show them the second set of solicitors’ advice it had received in settling the claim; there was no implied waiver of the legal professional privilege which prima facie enured in the lawyer-client communications. Continue reading “No issue waiver of 2nd solicitor’s advice on regretted settlement made necessary by 1st solicitor’s negligent advice”

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Western Australia’s Bleak House Case is a Prosecutorial Flop

Legal Practitioners Complaints Committee v B&M [2005] WASAT 217

No doubt Dickens’s Bleak House is being dusted off in many a household glued of a Sunday evening to the BBC’s new dramatisation which finished in Australia yesterday. In it, lawyers squabble over a disputed estate in the courts of Chancery in the matter of Jarndyce v Jarndyce for generations until a new copy of the will is found which determines all issues, just as the estate is reduced to nothing by lawyers’ fees.  Life imitates art a little bit in this case of an estate whose administration took almost 50 years because of the transposition in the will of the Christian and middle names of a beneficiary — except that the respondent lawyers did not suffer any penalty for tardiness, and certainly did not take a bullet through the heart like Tulkinghorn. The last 15 years of the estate’s administration gave rise to disciplinary charges which seem to have been based on the curious proposition that if partners ignorant about the mysterious world of probate law had been involved, the former partner’s stroke of genius in working out what had happened would have come about a lot sooner. I say curious because the employee solicitor and former partner seems to have been acknowledged by everyone as having had a very long experience of almost exclusively complex probate work. Continue reading “Western Australia’s Bleak House Case is a Prosecutorial Flop”

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

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Woman bankrupted because of solicitor’s failure to attend court suffered no loss

Mitchell’s Case [2005] VLPT 1

A client’s claim for compensation in a pecuniary loss dispute failed because she adduced no evidence that had she not been declared bankrupt by reason of her solicitor’s negligent failure to turn up to court, she could have avoided bankruptcy on any better basis than she did by paying out the full amount owing to creditors. She was criticised for not applying to set the bankruptcy aside before suing the solicitor. The decision is a shining example of the capacity of causation defences to succeed even in the face of plain negligence. Continue reading “Woman bankrupted because of solicitor’s failure to attend court suffered no loss”

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On the perils of the undersupervised law clerk

Legal Practitioners Complaints Committee and JCB [2005] WASAT 213

A sole practitoner dictated many precedent letters for his routine suburban personal injuries practice. His law clerk of 16 years’ experience, an arts graduate and a one-time law student, did all the work in a workers compensation file: she took instructions, signed letters taken from the precedent bank, negotiated with the counterparty, and was charged out at $240 per hour plus GST and $30 per short letter, $50 per one-page letter and $70 per long letter. The solicitor was unable convincingly to establish that he had done anything very much at all.

He was found guilty of “neglect” in failing properly to supervise the clerk and of “unprofessional conduct” in grossly overcharging. The first finding gave rise to a reprimand, the second to a $2,000 fine. Costs claimed at $10,000 were allowed at only $5,000 on the basis that the solicitor successfully resisted a third charge of constructively misrepresenting that the law clerk was a solicitor and on the basis that the retention of senior counsel by the prosecuting Committee was unnecessary. The third charge failed because no evidence was sought to be adduced of the solicitor’s complicity in the alleged deception, a timely reminder of an oft-forgotten principle that there is no disciplinary version of vicarious liability (a different concept from the wrong of failure to supervise). The law as to the supervision of clerks is well summarised in a neat and detailed judgment of Justice Barker, a Supreme Court Judge.

Continue reading “On the perils of the undersupervised law clerk”

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Multiple claims and the $15,000 limit on power

Tweed on behalf of National Exchange Pty Ltd v Griffin Law Firm [2006] VCAT 1305

A solicitor was retained to pursue parties for breaches of contract involving small sums. He fell into dispute with the client in relation to fees in 376 such matters. Mr Howell found there were 376 separate disputes each for less than the jurisdictional limit so that he had jurisdiction, and refused an application for dismissal under the power to dismiss disputes which would be more appropriately heard by a court. Continue reading “Multiple claims and the $15,000 limit on power”

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Bankrupt may not initiate dispute resolution procedure in relation to rights accrued prior to bankruptcy

Kaiser v Faulkner [2006] VCAT 1302

What this case illustrates is simply that upon bankruptcy the right to seek compensation or the waiver or diminution of legal costs through the dispute process under the Legal Practice Act, 1996 vests in the trustee in bankruptcy and never revests in the bankrupt even if not taken up by the trustee. Continue reading “Bankrupt may not initiate dispute resolution procedure in relation to rights accrued prior to bankruptcy”

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Epic battle re trust monies results in misconduct finding against barrister

Victorian Bar Inc v DAP No. 6 [2006] VCAT 1226

A barrister banked $50,000 into his personal account, arguing that it was a “retainer” and not monies held on account of future fees. VCAT found that it could not have been a retainer because that is a modest fee paid to a barrister to prevent them from acting against the payer, and the barrister already could not act against the complainant at the time of the payment because of his close involvement as his counsel over many years prior to the payment. The difference between “wilful” and “reckless” breach of the Legal Practice Act, 1996 or rules of conduct was explained. The interlocutory decisions in this matter were digested earlier. Continue reading “Epic battle re trust monies results in misconduct finding against barrister”