An ACT practitioner seems to me to have been skilfully represented, escaping with findings of unsatisfactory professional conduct, a reprimand and a fine. The decision in Council of the Law Society of the ACT v LP  ACAT 74 just shows how far cooperation and a persuasive articulation of remorse and insight can go.
The practitioner illegally sued his former client for fees in circumstances where he knew that the very person who had instructed him, a director of the client who had given a director’s guarantee and so was a third party payer, had sought taxation. Generally speaking, solicitors cannot sue their clients for fees once the client has commenced taxation.
In support of applications for default judgment, and to wind up the corporate client, the practitioner represented to the court, including on oath, that there was no dispute about fees. Given that the director, a builder, was the alter ego of his building company client, the proposition that the company did not dispute the fees attracted a charge of professional misconduct by swearing a false affidavit, a thoroughly serious allegation. By a plea bargain, it was downgraded to a weird charge of unsatisfactory professional conduct (varied by me for readability):
The practitioner breached his general law ethical duty of professional conduct or the duty owed to the director of his former client pursuant to Rule 1.1 of the Legal Profession (Solicitors) Rules 2007 to continue to treat the former client fairly and in good faith, and not to treat it otherwise than in an honourable and reputable manner during the dispute over costs owed by the director or the former client.
Rule 1.1 was itself a weird old rule:
‘A practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner.’
Perhaps the horribleness of the original false affidavit charge’s drafting contributed to the prosecution’s willingness in the end to back away from it and retreat into the weirdness set out above. The original charge (again, varied by me for readability) was: Continue reading “Suit for fees goes badly wrong but could have gone much worse”
Professor Hampel has been telling me recently that the rule in the House of Lords’ judgment in Browne v Dunn (1893) 6 R 67 is much mis-understood by advocates and decision makers alike. Another judge apparently gives a talk to the participants in the Victorian Bar’s readers course each intake emphasising the narrowness of the obligation. Good advocates and judges, it appears, find unnecessary and inelegant recitations of strings of ‘I put it to yous’ as irritating as good advocates find irritating the suggestions from not so good decision makers that matters which were not required to be put to a witness must be put, or, after the event, ought to have been put.
The general tenor of these teachings is that there is an obligation to put matters to opposing witnesses less often than is sometimes assumed, or that a counsel of caution in putting things to witnesses to be on the safe side of the rule has its forensic downsides. As I understand it, the perception is that some counsel see the need to lay out their whole case to opposing witnesses to give them an opportunity to comment on it, regardless of whether the witness is already well appraised by witness statements or documents of the cross-examiner’s client’s case or whether the matters put in fact contradict or tell against any evidence of the witness.
Professor Hampel’s half-serious theory about the confusion flowing from the decision — that no one has ever read it — may be correct. Someone else seems to have had the same concern, having set up a website devoted solely to putting the hitherto obscurely reported and difficult to find decision on the net. (And, what do you know? The case is actually about relations between solicitors and clients which is principally about privilege and the liability of a solicitor to action for words spoken between solicitor and client.)
But there is one aspect of the rule which repeatedly attracts criticism when it is not complied with. There is an obligation to squarely put to a witness in cross-examination allegations of dishonesty (or, to use a precise synonym, fraud). Lord Herschell said at 70-71: Continue reading “Is there an obligation to put in cross-examination that the witness is lying?”
Legal Services Commissioner v AL  QCAT 237 is a decision of a disciplinary tribunal presided over by Justice David Thomas, President of QCAT and a Supreme Court judge. It is therefore of high persuasive value, and treats Queensland provisions which are the same as the equivalent Victorian provisions. And it provides what I suggest with respect are the correct answers to the following questions:
- How negligent do you have to be before you can be found guilty of unsatisfactory professional conduct as defined in provisions which say that the concept includes ‘conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent’ lawyer holding a practising certificate? (Answer at  and : substantial and very obvious fallings short of the standard, established by direct inferences from exact proofs.)
- What must be pleaded specifically in a disciplinary charge? (Answer at  – : all states of mind, not only dishonest intents, and all facts to be relied on (‘the charges to be levelled must be fully and adequately set out in the Discipline Application. As a matter of procedural fairness, the Practitioner should not be left in any doubt as to the extent of the allegations that is to be met.’)
- To what extent is a disciplinary tribunal constrained in its decision making by the allegations specifically made in the charge? (Answer at  – : absolutely: if no state of mind is alleged, the prosecution should not be allowed to call evidence as to state of mind; ‘it would be wrong to admit evidence the principal purpose of which is to establish conduct that lies beyond the ambit of the charge’.)
- Does the mere fact that charges are not allowed on taxation mean that there has been overcharging such as to warrant discipline? (Answer at  – : no)
The Tribunal dismissed charges against a solicitor who lodged a caveat pursuant to an equitable mortgage without checking that it satisfied the Statute of Frauds’ writing requirements and against a partner of her firm who took over her files when she was on holidays and billed the client for the work in attempting unsuccessfully to register the caveat.
I move from the specific facts of this QCAT case to general comment (what follows is certainly not veiled reference to the conduct of the Commissioner’s counsel in QCAT). There is a very real reason to insist on the particularization of states of mind in disciplinary tribunals, including particulars of actual and constructive knowledge. These details do not always get left out just because it is thought that disciplinary tribunals are not courts of pleading and such minutiae is not appropriate. Nor do they just get left out because they are thought to be inherent in the allegation, or because of incompetence, or mere mistake. Rather, they get left out because bureaucrats have investigated incompetently and when competent counsel come to plead disciplinary applications based on the investigation, they do not have a sufficient factual foundation to make these allegations, or perhaps are simply too timid.
But sometimes counsel with civil practices, untutored in the art of prosecutorial restraint, and safe in their private belief that the practitioner is in fact much more evil than incompetent investigation established, might fall prey to temptation. Mealy-mouthed, ambiguous allegations might be made which require the practitioner to get into the witness box. Then, all manner of unpleaded allegations as to states of mind and as to completely un-pleaded conduct, justified in relevance as tendency evidence or circumstantial evidence of the pleaded facts, might be cross-examined out of the practitioner and an unpleaded case presented to the disciplinary tribunal in closing. In a tribunal not bound by the rules of evidence, such questioning may be waved through with lip service to the proposition that objections will be dealt with by according appropriate weight to the evidence in the final analysis. Queensland leads the charge against such conduct, and I can’t help thinking it’s because Supreme Court judges seem to get involved in disciplinary decisions more often up there. All power to them. So impressed am I with this latest judgment, I have decided to go on a study tour of the Sunshine Coast in the September school holidays.
Continue reading “Yet more on the obligation on Legal Services Commissioners to plead their case properly and stick to it”
VCAT’s latest decision to come to my attention, of Member Elizabeth Wentworth, involved another solicitor who did not lodge tax returns over an extended period. He was suspended from practice for 12 months, but the suspension was suspended provided he did not breach certain conditions in the three years after the orders. If he does, then the Commissioner may apply for the suspension of the 12 month suspension to be lifted so it comes into operation. Member Wentworth decided to leave what exactly would happen in the case of a breach to the discretion of the any future Tribunal constituted to consider it rather than providing automatically for the suspension of the suspension to be lifted. Legal Services Commissioner v GB  VCAT 254 is interesting to me for six reasons: Continue reading “Suspensions which are not suspensions and orders which are not orders”
Traditionally, the law of professional discipline has differed from the law of negligence in three profound ways. First, its aim is the protection of the public (though the policy in favour of protecting the reputation of the profession grossly infects the purity of this proposition in most analyses). Secondly, it is about personal wrongdoing. Statute aside, there is no law of attributed liability in contrast to doctrines such as vicarious liability in the law of negligence. And thirdly, simple as opposed to gross negligence was never considered to warrant discipline. Things got messed up by the introduction into disciplinary statutes of a concept of unsatisfactory professional conduct defined in terms identical to the test for simple professional negligence.
Disciplinary tribunals (and, in my experience, disciplinary investigators and prosecutors) seem to lapse from time to time into the language of ‘should have known’ even outside the prosecution of that species of unsatisfactory professional conduct which is defined by reference to the test of simple professional negligence. Two practitioners had to go to two Courts of Appeal to reverse decisions on dishonesty charges which were horribly infected by objective reasoning: Legal Services Commissioner v Brereton  VSCA 241 and Giudice v Legal Practitioners Complaints Committee  WASCA 115. Surprisingly, the former decision did not get a guernsey in the latter. The law of recklessness is authoritatively restated in the three separate judgments in Giudice and I have set the whole lot out below along with some observations about Brereton’s Case. Continue reading “WASCA on the kind of recklessness in making statements which amounts to conduct warranting discipline”
A Western Australian disciplinary case, Legal Profession Complaints Committee v CSA  WASAT 57 is interesting in a number of ways. A criminal lawyer was the manager of a strata corporation. She owned two units and the complainant the third. The complainant affixed an airconditioner to a wall which impeded on a common area. She sought legal advice. Her lawyers wrote a letter of demand to the complainant and charged a few thousand dollars. The complainant did not fix the problem within the 14 days demanded, so the lawyer sued in the Magistrates’ Court. The case was settled on the basis that the airconditioner would be relocated and the lawyer withdrew the proceeding without seeking costs. When the complainant sold the third unit, the lawyer demanded that the complainant pay her the few thousand dollars her lawyers had charged her for the advice and the letter of demand. She did so by a letter of demand drafted for her by another lawyer, though the involvement of this second lawyer only emerged at the disciplinary hearing. When the complainant did not pay up, she sued for them in her personal capacity. The suit was found to have no legal foundation, but the lawyer said that she mistakenly thought that it did have a legal foundation, and that civil proceedings were not her thing. The case says:
1. The suit was an abuse of process because there was no legal foundation for suing for the recovery of ‘pre-litigation’ legal costs.
2. The lawyer’s conduct in threatening to bring and then bringing a suit which was an abuse of process was common law misconduct but was also a breach of a rule which prohibited lawyers from claiming on behalf of a client costs in a letter of demand for recovery of a debt because she was acting for herself in writing the letter (even though no legal letterhead or reference to her status as a lawyer was involved).
3. There is no defence of honest and reasonable mistake in professional discipline.
4. It is inappropriate for a disciplinary tribunal to make what the prosecutors described as ‘an incidental finding of dishonesty’ in relation to statements made during the investigation in respect of which no charge had been laid in the disciplinary proceeding. Any such allegation ought to be the subject of a separate process (though the Tribunal then went ahead and found that the allegation was not made out on the Briginshaw standard anyway). Continue reading “Self-represented solicitor guilty of misconduct for breaching a rule expressed to regulate conduct when acting for a client”
Council of the Law Society of New South Wales v JAX  NSWADT 283 is a case in which the solicitor was disciplined for paying himself out of fees provided to him by his client for payment of counsel’s fees. Ultimately he went bankrupt and did not pay the fees. See also this earlier post on this subject. The decision also represents yet another admonition to pleaders of disciplinary charges to plead dishonesty expressly if they intend to allege it.
There were the following agreed facts: Continue reading “More on solicitors’ obligations to pay counsel’s fees”
Liu v Barakat, unreported, District Court of NSW, Curtis J, 8 November 2011 is the latest in an ongoing scandal in NSW in relation to overcharging by a prominent personal injuries practice which traded as Keddies, but has subsequently been gobbled up by a publicly listed company. Many are unhappy at the strike rate of the NSW Legal Services Commissioner in the whole affair (the sole remaining disciplinary prosecution is two and a half years old and not heading to hearing until April next year), but now the District Court has given judgment in a case finding what appears to amount to fraudulent misrepresentation in relation to the billing of about $69,000 (reduced on a ‘but say’ basis to about $64,000) in a personal injuries case where liability was admitted before Keddies got in the harness, and where the proper charge was about $21,000. Justinian‘s Richard Ackland has the background and latest here.
The partnership apparently bungled the settlement of a taxation allowing the claim to slip through to judgment, and Judge Curtis of the NSW District Court ended up ordering Keddies to repay to the client the difference between what they charged and what they were entitled to charge. The reasons provide food for thought for those out of time to commence taxation because the judge found that the bills had within them implied representations that the amounts billed were properly chargeable at law. He reduced the fees chargeable by Keddies to the amount in fact properly chargeable at law, something which would ordinarily be achieved in a taxation. Such logic might be employed in many cases in the 5 years after a bill during which the client is out of time for taxation but within the 6 year limitation period for prosecuting a misleading and deceptive conduct claim.
The case will be seized on by opponents of hourly billing, and perhaps properly so (the first 6 minutes or part thereof charged for sending a pro forma welcome letter which required only the insertion of the client’s name is an example of why minimum charges of 6 minutes are abhorrent when applied literally, for example). But it really appears to be a case about simple dishonesty (by whom is not made clear), because in the main this was not a case where the clients were billed outrageously albeit according to the terms of a contractual agreement which bound them. I say that because if there was any innocent explanation advanced by the Keddies partners for the conduct the most obvious explanation for which was someone’s dishonesty, it was not recorded in the judgment. This was a case where, in the main, work was charged for which was not done (most likely as in the case of the second 6 minutes or part thereof billed for the welcome letter), or not done by a person whose contractually agreed rate warranted the charge for the time spent. For example:
- A secretary was impermissibly charged at partners’ rates ($460 per hour).
- One hour’s work was charged on 4 October 2005 for drafting the costs agreement which had been signed on 30 September 2005, and an associated explanatory document at senior litigation lawyer rates, when in fact all that was required was the insertion of the client’s name. The Court held that the rate which would have been properly chargeable under the costs agreement had that been the appropriate method of billing was 6 minutes of a secretary’s time at secretaries’ rates. No argument appears to have been advanced that this was not work done for the client, but the lawyers’ own costs of entering into a contract to which they were a party and which they wished to propose the terms of. There is no record of any evidence having been given that the time entry was a mistake, and it is hard to see how the recording of time beyond (at most) one block of 6 minutes or part thereof could have been anything other than outright dishonesty on at least someone’s part within Keddies, even if this activity was properly taken to be work engaged in by the solicitors on the client’s behalf.
- A charge for two blocks of 6 minutes or part thereof was charged at the secretaries’ rate for reading a letter advising the time, date and place of a medical appointment, a further charge of two such blocks for ‘considering’ that letter, and a further charge of two such blocks for advising the plaintiff by letter of that information. The total bill for work which it is hard to see taking 5 minutes of a secretary’s time was $108 (for which incidentally, just to keep this real, you can currently have a linguine with fresh sardines, pine nuts, currants and saffron, a gravlax, three glasses of Italian prosecco, a chocolate pudding with peanut butter ice cream and a strawberry mousse with jelly and meringues at Gill’s Diner).
- The plaintiff was charged $184 (4 blocks of 6 minutes or part thereof at partner rates) for reading, then considering, a letter which said ‘We enclose authority for execution by your client to enable us to obtain documentation from the Department of Immigration and multicultural and indigenous affairs. Please have your client sign the authority and returned to us as soon as possible.’
- The plaintiff was charged $131 (3 blocks of 6 minutes or part thereof at partner rates) for reading an email the non-formal parts of which read ‘Rcv’d’. (What a freaking joke!) She was charged the same amount for reading the email to which that was a reply, the non-formal part of which read ‘I refer to our telephone call this morning. I have been directed by Assessor J Snell, to inform CARS: 1. The CARS hearing date on 14 September 2005 has been vacated — please cancel the interpreter arranged by CARS. The CARS hearing date has been rebooked for 17 November 2006 at 10 am — please rebook a Mandarin interpreter.’
It will be interesting to see the response of the police, the NSW Legal Services Commissioner and the Council of the NSW Law Society to the judgment, especially in light of the fact that the plaintiff’s complaint to the Commissioner was officially withdrawn, a fact which did not of course prevent the Commissioner from continuing to investigate it: s. 512 Legal Profession Act 2004 (NSW). Somewhat surprisingly, I learn from that section, that the withdrawal of the complaint also does not prevent the complainant from re-lodging it: sub-s. (5). Continue reading “The Keddies overcharging civil case no. 1”
Update: So far, I have had the following responses to my musing, which seems to excite you all more than I could have imagined:
‘Thats easy, fraud is directly aimed at unlawful appropriation – dishonesty may be indirectly so.’
‘Fraud v dishonesty – my thought: does fraud require there to have been a victim, where dishonesty doesn’t?’
‘Have a look at para. 10 of Brooking’s judgment in Magistrates Court of Victoria at Heidelberg Vic Full Court 2000 Buchanan, Charles and Brooking (on perversity with the mental element and an updated ignoratia lex……. Huge philosophical literature on all terms, and therefore the differances between them. Thanks for your blog’ and
‘Would fraud be dishonesty employed for a financial or material gain? I think of fraud as a subset within dishonesty.’
Who knew that sitting there on the Legal Services Commissioner’s website is an explanation of his thinking about the difference between unsatisfactory professional conduct and professional misconduct? Not me, but I quote:
‘The sort of conduct that amounts to unsatisfactory professional conduct is where the lawyer has failed to meet professional standards. Professional misconduct, on the other hand, is behaviour involving fraud, dishonesty, breach of trust or conflict of interest. The aim of an investigation is to see whether it can be proved that such conduct took place.’
Very useful to know. I am writing a paper on fraud at the moment, with the aim of covering the whole concept and all of its legal ramifications in one hour. Being in that frame of mind prompts me to ponder what the difference is between ‘fraud’ and ‘dishonesty’.
In Council of the Law Society of NSW v WDC  NSWADT 83, NSW’s Bureau de Spank rejected a submission of the Law Society to the effect that it should make findings of misappropriation (a necessary element of which is dishonesty) which the Law Society said it had impliedly alleged in the charge. ‘Nonsense!’ said the Bureau:
‘As the above outline indicates, the Grounds stated in the Application alleged misappropriation in the context of only three matters: Daude, Gibki and Laczny. But Mr Stitt argued that a claim of misappropriation was made implicitly in a number of other matters in which the Solicitor withdrew funds to which he was not entitled from a trust account: for example, Ida Potier, Davidson, Crowe, Maguda, Milkow, Obolska and Pugliese.
We agree, however, with a submission by Mr Lynch that the only matters in which we may properly make a finding of misappropriation are those in which the Law Society has alleged it. This follows, in our opinion, from the decision of the High Court in Walsh v Law Society of New South Wales (1999) 198 CLR 73: see in particular the judgment of McHugh, Kirby and Callinan JJ at 94-95.’
Updated post, 1 July 2016: see the English High Court case Law Society of Ireland v Patrick Enright described in this case note.
Original post: In Fraser v Council of the Law Society of NSW  NSWCA 72, which is part of the subject of this post, President Kirby made some comments on the relationship between the jurisdiction to strike a practitioner off the roll and a finding or admission of dishonesty, that is, fraud. The Court of Appeal unanimously overturned the decision of a disciplinary tribunal striking off the roll a solicitor with an otherwise unblemished record for fraudulently giving a certificate of advice to a mortgagor, then not being frank about it towards the mortgagee’s solicitor and in the disciplinary investigation, and having difficulty accepting, in the disciplinary tribunal that what he had done amounted to fraud. Kirby P said that a finding of fraud is not a prima facie indicium that a lawyer ought to be struck off; everything depends on the circumstances: Continue reading “Dishonesty in a solicitor: does it require striking off?”
A 27 year old solicitor working in family law twice lied about the existence of a document, and then forged it. That was just one and a bit years after a harrowing admission application in which the Board of Examiners split on whether she should be admitted, as a result of what VCAT’s Deputy President McNamara referred to as ‘allegations of plagiarism’ at the College of Law, and a want of frankness in their disclosure. The Board had given the solicitor a stern warning at the end of the hearing. For the forgery, the solicitor was fined $3,500 and reprimanded, the Commissioner’s submission that a year’s suspension was warranted being dismissed as ‘disproportionate’: Legal Services Commissioner v SJJ, McNamara DP, 14 April 2011. If followed, this decision suggests once again that interference by VCAT with a practising certificate requires quite profound dishonesty.
As to the fine, it may be that $3,500 was a significant fine for this solicitor: her financial circumstances were described as ‘exiguous’, but she was employed as a solicitor by a respectable Melbourne firm at the time of the penalty hearing, looked set to remain so employed by her supportive employer, and her circumstances seem to have been principally affected by the size of her mortgage. The general deterrence of a fine of this sum would be enhanced if its appropriateness in the context of the solicitor’s ability to pay it were explained in greater detail. That way, solicitors weighing up the risks of forging a document against its perceived desirability (yes, that is the theory of general deterrence) would be able to remember back to the report of the case in question and think ‘Well if he was fined $5,000 and had an annual disposable income of $25,000 living in a modest home, I must be looking at a fine of something like $20,000 since my disposable income is four times his, and I live in a home twice as large as my family actually needs.’
Continue reading “Solicitor fined $3,500 for forgery”