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$5,000 fines in lawyers’ disciplinary prosecutions

Update, 30 March 2020: VLSC v Flanagan [2020] VCAT 363: repeated breaches of undertakings and failures to keep Law Aid up to date over many years.

Update, 2 July 2019: See Council of the Law Society of NSW v Thadsanamorthy [2019] NSWCATOD 96: 3 counts of professional misconduct including dishonest misappropriation of trust monies; 6 counts of unsatisfactory professional conduct.

Update, 13 June 2019: See Council of the Law Society of NSW v Gurusamy [2019] NSWCATOD 89 (eight counts of professional misconduct).

Original post: In this post, I noted the New South Wales Court of Appeal’s review of fines in solicitors’ disciplinary proceedings. I did my own little survey of Victorian cases recently in order to justify to the VCAT a joint submission as to penalty following a plea.

How naughty does a lawyer have to be to cop a fine of $5,000 in a disciplinary prosecution where that is the principal penalty (often paired with a reprimand, and costs of about $5,000)?  This naughty:

Continue reading “$5,000 fines in lawyers’ disciplinary prosecutions”

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NSWCA surveys fines in NSW lawyers’ discipline decisions over a decade

Russo v Legal Services Commissioner [2016] NSWCA 306 was the subject of my previous post. The Court engaged in a comparatively sophisticated review of disciplinary outcomes in like cases.  The purposes of this post is to reproduce that review and comment on the variables which ought to be taken into account in any proper survey of past outcomes.

To survey penalties in like cases has always been an important part of sentencing and should be an important part in imposing disciplinary sanctions.  Barbaro  (2014) 253 CLR 58; [2014] HCA 2 and Cth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 do not suggest to the contrary.  They say that the purpose of a survey of like sanctions is to promote consistency in penalties but not the establishment of a range of available sanctions deviation from which is appellable.  Buchanan JA observed in R v Macneil-Brown [2008] VSCA 190, (2008) 20 VR 677 at [130]:

‘counsel can best assist a sentencing judge, not by advancing what they consider to be sentences at the lower or upper limits of a sound sentencing discretion, but by making submissions as to the existence and nature of aggravating and mitigating circumstances and providing some guide to the manner in which other judges have approached like cases by supplying sentencing statistics and citing passages from decided cases which bear upon aspects of the instant case.’

I would submit that any survey of fines as a disciplinary sanction must take into account, as an important aspect of the analysis, the financial situation of the person or persons liable to pay it.  The specific deterrence of a fine will vary greatly from one practitioner to another.  Practitioners who struggle, for personal reasons, are more likely to get themselves into trouble in the first place, and to exacerbate it by less than perfect intercourse with the Legal Services Commissioner.  Their financial situations often deteriorate too.  Specific deterrence may be achieved by imposition of a fine much smaller than would be imposed on a flourishing practitioner raking it in.  General deterrence will also be achieved if the Tribunal is transparent in taking account of financial circumstance.  In such a case, the Tribunal might indicate the kind of fine which might have been imposed had the practitioner enjoyed an average post-tax income.

Furthermore, the costs burden borne by the practitioner ought also to be taken into consideration.  Costs and fine are inter-related in this way: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [88] (Kirby J speaking for the Court) applied by analogy in LSC v Bechara [2009] NSWADT 313. The extraordinary costs practitioners are liable to in Victoria following disciplinary prosecutions would very often be more than adequate to achieve specific and general deterrence.  If you are prosecuted and reprimanded, made the subject of an editorial on the front page of the Commissioner’s website, and have to cough up $40,000 in unrecoverable solicitor-client costs reasonably incurred and costs liability to the Legal Services Commissioner, that is going to make you think just as hard about doing it again as any comparatively trivial fine you might cop.

Finally, one must be astute to inflation.  In my experience, people tend to exaggerate the effect of inflation when considering older fines.  Here is a calculator which assists in measuring in today’s dollars a fine imposed some years ago.

For some reason, notwithstanding that NSW is now a part of the legal profession uniform law, the other participant in which is Victoria, no Victorian fines were part of the survey.  That strikes me as unusual, since there is a whole statutory office the purpose of which is to promote interstate uniformity in the application of the Uniform Law: the Commissioner for Uniform Legal Services Regulation.  Russo’s Case was decided under the old legislation which the LPUL replaced, and which legislation in fact governed the prosecution was one of the issues on appeal.  Interestingly, apparently because it was thought that there were no relevant differences between the two regimes, that question was not decided.

This is what the NSWCA said about its survey of fines, and about the appropriate fine in this case: Continue reading “NSWCA surveys fines in NSW lawyers’ discipline decisions over a decade”

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NSW solicitor who didn’t pay counsel’s fees struck back on

Salvatore Russo, a solicitor of 29 years’ standing, was struck off NSW’s roll of solicitors on 16 April 2016 by NCAT.  He had received payment from his client for counsel’s fees but not paid counsel for years. Then he was high-handed in response to the client’s entreaties when counsel sued the client directly.  The Court of Appeal found a denial of procedural fairness by NCAT.  The Tribunal had telescoped the questions of liability and penalty into one hearing.  It had failed to give Mr Russo sufficient notice of the fact it was considering striking him off despite the fact by the end of the trial, the Commissioner was not seeking such an outcome any more. Now he’s been struck back on by the NSW Court of Appeal, a fine of $20,000 substituted for his misconduct: Russo v Legal Services Commissioner [2016] NSWCA 306.  (In fact, the striking off never came into operation, because he got a stay along the way.) Continue reading “NSW solicitor who didn’t pay counsel’s fees struck back on”

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Legal Services Commissioner’s new decision making powers

The Victorian Legal Services Commissioner has published a report on his new proactive regulation of the profession.  It tells how risk profiles of practices are being constructed with the assistance of academics to target trust audits and audits of firms more generally (a new thing for law practices which are not ILPs).  It also tells about the exercise of the power to make binding decisions, and alerted me to the fact that the Commissioner now publishes redacted versions of costs determinations at this page. The report says: Continue reading “Legal Services Commissioner’s new decision making powers”

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Applications to stay disciplinary decisions pending appeal

I had to convince the Legal Services Commissioner to consent to a stay of orders suspending my client pending an appeal he has brought from VCAT the other day.  Happily the Commissioner consented.  For next time, I squirrel away this re-statement by the New South Wales Court of Appeal of the application to this class of case of the law governing applications for stays in civil proceedings pending appeal in Griffin v Council of the Law Society of New South Wales [2016] NSWCA 275.  (I reported on the first instance decision here, and this latest decision reveals that the solicitor has applied for the removal of his appeal to the High Court so it can rule authoritatively on the application of the freedom of political speech to criticism of the third arm of government, the judiciary.) Continue reading “Applications to stay disciplinary decisions pending appeal”

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Judicial review of decisions to dismiss disciplinary complaints

A man was acquitted of criminal charges.  The prosecution’s appeal failed.  He complained about the police’s lawyers’ conduct to South Australia’s Bureau de Spank, the Legal Practitioner Conduct Commissioner.  The Commissioner dismissed the complaint.  There was a statutory right of appeal in respect of some but not all categories of decisions at the conclusion of a disciplinary investigation.  Dismissals of complaints were not decisions which attracted a right of appeal.  Furthermore, the Commissioner argued, the man had a right  essentially to prosecute the lawyers privately for misconduct as an ‘aggrieved person’ under s. 82(2)(d), Legal Practitioners Act 1981 (SA).

The Commissioner applied unsuccessfully for the summary dismissal of the judicial review application.  The Court found that even though in any ordinary prosecution which would have followed a disciplinary complaint, the parties would be the Commissioner rather than the complainant on the one hand and the lawyer on the other, the complainant’s connection as the object of the alleged misconduct to the subject matter of the complaint was sufficient to give him standing (or, more precisely, to avoid summary termination of his proceedings on the basis of lack of standing).  And that was so notwithstanding the statutory scheme for appeals which conspicuously excluded him from its tenderness and notwithstanding any right he may have privately to prosecute the lawyers.  The decision is reported as McLeod v Legal Profession Conduct Commissioner [2016] SASC 151.

The situation in Victoria is impacted, in respect of complaints to the Victorian Legal Services Commissioner to which the Legal Profession Uniform Law apply  by part 5.6 of chapter 5 (ss. 312 – 314).  Decisions of the Victorian Legal Services Commissioner under chapter 5 are ‘final, except as provided by this Part’.  The Commissioner is empowered to review his own decision but only at his absolute discretion.  And lawyers have a right to appeal to a person who is presumably intended to be VCAT from a disciplinary sanction imposed administratively by the Commissioner or a compensation order imposed by him for $10,000 or more.  But those provisions are subject to s. 155 of the Legal Profession Uniform Law Application Act 2014, which preserves the Supreme Court’s jurisdiction to engage in judicial review of the Commissioner’s decisions ‘Despite anything to the contrary in the’ LPUL.

As to the law in relation to the same question in Queensland, see Murphy v Legal Services Commission [2016] QSC 174.

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Privilege and disciplinary investigations

Lawyers have an obligation proactively to assert and protect the privilege enjoyed by their clients and former clients: Re Stanhill Consolidated Ltd [1967] VR 749 at 752. I wrote about it in this post about the Legal Profession Act 2004 (Vic).  Lawyers have no implied or, I would suggest, ostensible authority to waive privilege belonging to former clients. The administration of justice will protect the privilege of persons who are unaware of the issue arising and make no assertion of the privilege: Legal Services Board v Garde-Wilson [2007] VCAT 1406 at [89].

In investigations of complaints by former clients about their former lawyers, no privilege issue arises, either under the Legal Profession Act 2004 or the Legal Profession Uniform Law.  The complaint would amount to an implied waiver at common law, and the question is put beyond doubt by statute.  Of course, this proposition has its limits and the wholesale use of client secrets against them in a manner disproportionate to the need to divulge them in response to their complaint is a seriously ugly look.  The issue of client privilege arises where disciplinary investigators are investigating complaints by non-clients, or in own motion investigations.  So, for example, I am advising in relation to a complaint made by the husband about conduct by the wife’s solicitors in a matrimonial proceeding between them.

Where a lawyer purports to waive a former client’s privilege without the client’s instructions, or simply fails to consider the question before handing documents over to the State, the law requires ‘the cat to be put back in the bag’ as far as possible: B v Auckland District Law Society [2003] UKPC 38 at [69]; British American Tobacco Australia Services Limited v Cowell [2002] VSCA 197 at [192].  So a disciplinary tribunal might well not receive, or put from its mind, evidence of privileged communications obtained by legal regulators in the course of investigations of non-client complaints where the client had not waived privilege, and indeed exactly that occurred in a VCAT case in which I was involved.

The law in relation to privilege and non-client complaints under the Legal Profession Act 2004 was clearly declared by VCAT.  The situation faced by  lawyers investigated under the LPUL following the complaints of non-clients, and in own motion investigations, in respect of pre-LPUL conduct is not so clear.  It is the subject of this post, which suggests that notwithstanding what the Legal Services Commissioner will tell you is a clear abrogation of privilege by the LPUL for all investigations conducted under it, lawyers in such circumstances should think carefully before giving up privileged communications without their former clients’ informed consent.  They should, in my submission, at least alert their clients to the possibility that the privilege might still be available to be asserted and give them the opportunity to assert it, if they care to sufficiently.

It will be increasingly important in the future to make clients aware that lawyer-client confidentiality has been largely done away with: all a person curious about the advice being obtained by his adversary need do is make a complaint about the adversary’s lawyer.  The old advice that ‘everything you tell me is strictly confidential’ cannot now be given without risking a negligence suit. Every time a solicitor tells a battered woman that whatever she tells him will be just between her and him, and he will seek her permission before using the information publicly or even in the Family Court, will have to add ‘unless your boyfriend or his father or a men’s rights action group make a disciplinary complaint against me, as they are perfectly entitled to do’.  So too the QC representing BHP in relation to tax matters: ‘Of course you understand that all this is privileged (unless the judge, who’s getting pretty cranky at me, refers me off for investigation by the Legal Services Commissioner)’.  I don’t think I’m being hyperbolic; I’m acting at this very moment for a solicitor whom the Commissioner is compelling to divulge privileged communications connected with the subject of proceedings, in a complaint by the other side to the proceedings, mid-proceedings.

Continue reading “Privilege and disciplinary investigations”

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Yet more on the obligation on Legal Services Commissioners to plead their case properly and stick to it

Legal Services Commissioner v AL [2016] 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 [44] and [27]: 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 [82] – [92]: 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 [96] – [108]: 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 [76] – [77]: 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”

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Advocates’ immunity: at once more powerful and narrower than most yet understand

Advocates’ immunity was, until recently, more powerful than many lawyers were aware. Since the 1 July 2015 introduction of the Legal Profession Uniform Law and the High Court’s May 2016 decision in Attwells v Jackson Lallic Lawyers Pty Limited,[1] however, it may be narrower than many realise. And perhaps not everyone is aware that the immunity these days is very likely peculiar to Australia; it is certainly not a feature of English, American, Canadian, Continental, Indian, South African or New Zealand law.[2] Continue reading “Advocates’ immunity: at once more powerful and narrower than most yet understand”

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The Bureau de Spank’s obligation not to publish about disciplinary orders until lawyers’ appeal rights are spent

Parliament is considering a bill to re-instate the disciplinary register, and to prohibit the Bureau de Spank from trumpeting its successes before the respondent practitioners’ appeal rights are exhausted: Legal Profession Uniform Law Application Amendment Bill 2016 (Vic.).  Cl. 150E of the Bill proposes to prohibit the Legal Services Board from providing to the public information about disciplinary orders made by the VCAT’s Legal Practice List while appeals or appeal rights are live.  The prohibition extends beyond publication on the proposed disciplinary register to disclosure of information to the public more generally.

There is a problem with the Bill though: it focuses its protection of the profession on prohibitions of publications by the Legal Services Board about final orders.  The Board shares a website and premises with the office of the Legal Services Commissioner.  The CEO of the Board is in fact the Legal Services Commissioner, Michael McGarvie, who is also the applicant in all disciplinary prosecutions of lawyers in Victoria.  Yet the CEO, qua Commissioner, is content for his staff to write about cases he is prosecuting, before any orders have been made and while the tribunal is considering what orders to make.  On the homepage of the Board + Commissioner’s website, no less.

If parliament is concerned to ensure that the reputation of practitioners is not to be ruined by accounts of current proceedings by one of the parties to them where the aspect of things might change dramatically upon appeal, or even by bad decisions in such proceedings which are to be appealed, it ought to consider adding the Commissioner to the class of person covered by the prohibition, and to make clear that neither the Board nor the Commissioner ought publish details of disciplinary prosecutions while they are before the disciplinary tribunal.

It is not uncommon for appellate courts — the Supreme Court or the Court of Appeal — to reverse decisions unfavourable to lawyers in disciplinary prosecutions of lawyers in VCAT’s Legal Practice List, or to substitute decisions more favourable to lawyers than those of VCAT or the legal regulators.  So the no publicity pending appeal proposition actually has some important work to do in the real world.  Consider, to name a few, Legal Services Commissioner v McDonald [2015] VSC 237, PLP v McGarvie [2014] VSCA 253, Stirling v Legal Services Commissioner  [2013] VSCA 374, Burgess v Legal Services Commissioner [2013] VSCA 142, Brereton v Legal Services Commissioner [2010] VSC 378, Byrne v Marles [2008] VSCA 78, Quinn v Law Institute of Victoria [2007] VSCA 122, Byrne v Law Institute of Victoria [2005] VSC 509. Consider also non-lawyers: Omant v Nursing and Midwifery Board of Australia [2014] VSC 512, and Towie v Medical Practitioners Board of Victoria [2008] VSCA 157 where the Court found that VCAT’s standard orders in disciplinary hearings were contrary to the privilege against penalties.  It will be observed that some of those decisions were made by very experienced members of VCAT’s Legal Practice List, and several by its Vice-President, a judge.

Continue reading “The Bureau de Spank’s obligation not to publish about disciplinary orders until lawyers’ appeal rights are spent”

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Solicitor’s correspondence with judge telling him how immature his conduct was doesn’t go down well in disciplinary tribunal

Update, 5 October 2016: this decision is under appeal.  See this post.

Original post: In Council of the Law Society of NSW v MAG [2016] NSWCATOD 40, a Sydney solicitor was disciplined for writing a private letter of complaint to a Federal Court judge the day after a decision was handed down, adversely to his client in favour of the Tax Man.  The next day he wrote to the trial judge a letter not copied to the other side which commenced:

‘As solicitor for the Applicant in this matter, I have serious concerns about your conduct and decision in this matter. These are:

1. The somewhat immature and inappropriate comments you made to me …’ Continue reading “Solicitor’s correspondence with judge telling him how immature his conduct was doesn’t go down well in disciplinary tribunal”

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VCAT finds practitioner guilty of conduct prejudicing administration of justice

I only learnt in the last few years that Melbourne is one of the world’s great Jewish cities, with a globally significant series of communities of orthodox adherents.  One of those orthodox communities has delivered up an interesting case.  In Victorian Legal Services Commissioner v AL [2016] VCAT 439, VCAT’s Acting President recently found a well known Melbourne solicitor guilty of two counts of professional misconduct, constituted by breaches of each limb of r. 30.1.2 of the solicitors’ professional conduct rules.

The rule prohibited conduct calculated to, or likely to a material degree to be, prejudicial to the administration of justice, or to diminish public confidence in the administration of justice, or adversely to prejudice a practitioner’s ability to practise according to these rules.

The practitioner’s disciplinary offence was first to state privately to his client’s father his disappointment after an orthodox Jew sitting watching someone else’s case in court had gone out of his way from the well of the court to assist police in the middle of a bail hearing in a criminal prosecution of the practitioner’s client. His second offence was committed when the man, whom I will refer to as the complainant since he lodged the disciplinary complaint which led to the practitioner’s disciplinary prosecution, rang the practitioner and asked him about comments to similar effect which the man had heard the practitioner had made, taping the call. The practitioner expressed directly to the man similar sentiments, expressly invoking the Jewish principle of ‘mesirah’ by which Jews who cooperated with secular authorities against fellow Jews in times and places where Jews enjoyed imperfect protection were ostracized. Jewish authorities have repeatedly said that the principle has no operation in modern day Australia in relation to criminal matters.

The Age has reported, in an article prominently featuring the practitioner, that victims of Jewish abusers have been pressured not to cooperate with police. It reported the Legal Services Commissioner as saying that ‘there was a general principle that made it impermissible for a lawyer to tell a witness they could not inform police about a matter because of a religious or community rule.’ I do not mean to criticise the Commissioner in this regard, because The Age sought his comments prior to the Commissioner’s receipt of the complaint, and the Commissioner was presumably simply responding to a general question about lawyers’ obligations towards witnesses in their cases. But what VCAT’s decision demonstrates is that the practitioner’s comments occurred after the conduct in question which the practitioner believed to have involved false statements based on misinformation, and were directed to a person who was not a witness and who, as far as the practitioner was aware, was simply someone who stood up in the well of the court and interfered in his client’s case. Given that, as far as the practitioner is said to have known, the man who stood up in court had no further role to play in the case or in his client’s drama more generally, it is hard to see how the practitioner could be said to have intended to pressure the man as a victim of a Jewish abuser not to cooperate further with the police in the future in bringing the abusers to justice, as seems to have been the implication. Continue reading “VCAT finds practitioner guilty of conduct prejudicing administration of justice”

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What is the duty of care in tort of a man with florid paranoid schizophrenia?

Some cases are just dead interesting.  Dunnage v Randall [2016] 2 WLR 839, [2015] WLR(D) 287, [2015] EWCA Civ 673 is one of them.  A man sued the estate of his late uncle for compensation for injuries he suffered when his uncle poured petrol on himself and set it alight.  Despite the man’s efforts to prevent this tragedy, his uncle, a sufferer of schizophrenia, died.  The man jumped off a balcony to escape, having suffered burns.  Now you might think it heartless to sue to the disadvantage of the beneficiaries of the uncle’s estate in the circumstances.  But of course there was an insurer to upset the analysis.  The uncle was insured under a household policy against liability for accidentally causing bodily injury.  It was the insurer arguing that the mad have a different duty of care.  The trial judge agreed.  The Court of Appeal reversed.  Lady Justice Rafferty’s leading judgment is stylish.

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The permissible forensic uses of historical mental illness in professional discipline trials

Professor Dal Pont’s excellent text Lawyers’ Professional Responsibility (5th ed., 2013) suggests at [23.145] that mental illness will rarely provide a defence to a disciplinary prosecution, the purpose of which is protective rather than punitive.  He argues, in part, that the public needs protection just as much from the mentally ill who do bad things as from the mentally flourishing who do wrong.  But that reasoning does not have any application where there is not a temporal proximity between the moment of determining liability and the moment at which the putative wrongdoing occurred. In my experience the glacial pace of disciplinary investigations usually mean that the time for setting sanctions is years after the conduct in question.  Very often, I find myself acting for practitioners whose minds are flourishing much more than at the time of their wrongdoing.

I always thought (or perhaps more accurately, hoped) that Dal Pont was a little pessimistic about the possibility of mental impairment being relevant to the determination of the question of whether unsatisfactory professional conduct or professional misconduct is.  True, there are some decisions broad statements in which support that position, but the authorities are a bit all over the place, and there are so many different kinds of conduct warranting discipline and so many fact scenarios that it seemed to me that the law must be more nuanced than some of those broad statements suggested.

Last year, VCAT’s Legal Practice List last year ruled, contrary to the position advanced by Victoria’s Legal Services Commissioner, that evidence of mental impairment was relevant to the question of whether conduct was professional misconduct or unsatisfactory professional conduct, and heard evidence from a psychologist during the liability phase of the hearing.  The two species of conduct warranting discipline arising from a breach of the rules have traditionally been delineated by enquiring whether the breach was innocent or whether it was deliberate or reckless, so that it clearly incorporates a subjective enquiry. VCAT’s decision to hear the psychological evidence on the question of liability was, as I have learnt in the course of penning this post, consistent with that in New South Wales Bar Association v Butland [2008] NSWADT 120.

Now the Supreme Court of NSW has reviewed the authorities and published a useful decision in the matter of BRJ v Council of the New South Wales Bar Association [2016] NSWSC 146 (Adamson J), making clear that mental illness may be relevant to the question of liability, as well as to the question of penalty where it is of course of critical relevance, citing Robinson v The Law Society of New South Wales (Supreme Court of New South Wales, Court of Appeal, unreported, 17 June 1977), a decision I have not come across before. Essentially, Justice Adamson said, it all depends on whether there was a mental element to the kind of conduct warranting discipline which is charged.  Conduct described as a failure to maintain standards of competence and diligence is not something to which the practitioner’s mental impairment is relevant.  In charges which rely on the practitioner having a particular state of mind do require analysis of the degree to which the practitioner’s state of mind was flourishing.  Professional misconduct at common law is determined by what competent and reputable peers would think of the conduct.  What they would think is affected by the degree to which the practitioner’s mind was flourishing at the relevant time.

Unfortunately for the barrister who was the subject of the disciplinary hearing under appeal in this case, all this meant that though the Tribunal and the Court accepted that her conduct was caused by her psychiatric illness, she was nevertheless properly found guilty of unsatisfactory professional conduct constituted by failing to maintain standards of competence and diligence and acting in the face of a conflict between self-interest and duty to her client.  The test for such unsatisfactory professional conduct does not enquire into the mind of the practitioner, the Court found.  Accordingly, the psychiatric causation was legally irrelevant.

See also this sister post, about the disciplinary Tribunal’s and the Supreme Court’s willingness to allow the practitioner to change her plea, once after the liability hearing but before the delivery of reasons and once on the eve of the hearing of the appeal.

Continue reading “The permissible forensic uses of historical mental illness in professional discipline trials”

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Lawyers withdrawing ‘guilty pleas’ in disciplinary prosecutions at first instance and on appeal

BRJ v Council of the New South Wales Bar Association [2016] NSWSC 146 is the subject of this sister post about the permissible use of evidence of mental impairment.  Two aspects of it deserve their own separate post.  The respondent barrister changed her plea twice, once after the liability phase of the hearing but before the decision as to liability was given and once the night before the hearing of her appeal in the Supreme Court of NSW.  Each time, she was allowed to do so. Continue reading “Lawyers withdrawing ‘guilty pleas’ in disciplinary prosecutions at first instance and on appeal”

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Liability of directors of incorporated legal practitioners for wrongdoing of fellow directors

Legislation regulating lawyers typically deals with directors of incorporated legal practices like Victoria’s Legal Profession Act 2004’s s. 2.7.11 as follows:

‘Each of the following is capable of constituting unsatisfactory professional conduct or professional misconduct by a legal practitioner director–

(a) unsatisfactory professional conduct or professional misconduct of an Australian legal practitioner employed by the incorporated legal practice;

(b) conduct of any other director (not being an Australian legal practitioner) of the incorporated legal practice that adversely affects the provision of legal services by the practice’.

A recent decision from Sydney illustrates how disciplinary tribunals approach applications to discipline innocent co-directors of wrongdoer-directors in incorporated legal practices.  Trusted non-legal practitioner directors do not necessarily need to be supervised in everything they do by legal practitioner directors unless there is a special reason to.

In the NSW case, there was a special reason: the co-director did not renew his practising certificate which lapsed on 30 June 2011.  He had failed (to the innocent co-director’s knowledge) to comply with earlier disciplinary orders requiring that he be mentored.  Contrary to his promises to the by-then-sole-legal-practitioner-director, he caused the firm to incur an unfunded liability to a valuer retained on behalf of a client in litigation.  The valuer was instructed by the wrongdoer director in August 2011.  The Tribunal found the remaining legal practitioner director guilty of unsatisfactory professional conduct, but on the basis that her failure to supervise the by-then non-legal practitioner director caused the firm to incur a debt which it was unlikely to be able to pay if the litigation in respect of which it was incurred did not succeed.  The decision is Council of the Law Society of New South Wales v Loris Hendy [2016] NSWCATOD 20.

One thing which is puzzling is exactly on what basis it was said that a firm contracting personally to pay valuers, and then not paying them because it did not have the money to do so, was said to be conduct warranting discipline which the practitioner had an obligation to prevent by supervision.  After all, had the firm caused the client to contract directly with the valuers, or made clear to them that the firm would not be personally liable, they presumably still would not have been paid.  Presumably the client was always up for the disbursements, whether there was a successful outcome or not, since that is fairly standard.  And so, presumably, if the client had any money, the firm would have sued the client.  And presumably the firm believed on the basis of senior counsel’s advice that the client would succeed in the litigation and that the valuer would get paid out of the favourable costs award, and that, even if that did not occur, the firm would be in a position to meet the valuer’s fees.  Certainly, there was no finding to the contrary.

In the Victorian solicitors’ conduct rules in place from 2005 until recently, r. 26 said:

‘A practitioner who deals with a third party on behalf of a client for the purpose of obtaining some service in respect of the client’s matters, must inform the third party when the service is requested, that the practitioner will accept personal liability for payment of the fees to be charged for the service or, if the practitioner is not to accept personal liability, the practitioner must inform the third party of the arrangements intended to be made for payment of the fees.’

Compare r. 35 of the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015. To similar effect was r. 35 of the New South Wales Professional Conduct and Practice Rules 2013 (Solicitors’ Rules).  None of those were in force, of course, in NSW in 2011 when the non-legal practitioner director of the firm caused it to incur the fees, and I do not know what the rules which were in force in NSW at that time said.  At any rate, there was no reference to any such conduct rule in the Tribunal’s reasons. Assuming some similar rule was in place, it is notable that the legal practitioner director was not apparently disciplined for allowing the firm to contract the liability, but for not meeting it, or perhaps for allowing it to be contracted in circumstances where there was no guarantee that it could be satisfied if things went pear-shaped.

There are numbers of cases about the misconduct of solicitors who fail to pay counsel’s fees for no particularly good reason.  I have listed them at the end of this post.  It seems to be well established by authority that such conduct is misconduct at common law or pursuant to the generally worded statutory definitions of unsatisfactory professional conduct and professional misconduct. Couldn’t agree more, and long may such cases accumulate.  But this was a bit different.

Continue reading “Liability of directors of incorporated legal practitioners for wrongdoing of fellow directors”

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The extended duration of the un-renewed practising certificate

Under the Legal Profession Act 2004, if a lawyer applied for renewal of their practising certificate prior to the expiry of the old one, but a decision was not made before the old one runs out, the certificate is extended until either it is renewed or a decision to refuse renewal is finally determined by the exhaustion of all rights of review of that decision.  No one has ever really known what that meant.  There is a statutory review procedure in VCAT and then there are appeals all the way to the High Court.  Are the appeals from the review ‘a right of review of the decision’?  The Supreme Court has now determined that the certificate endures (if not earlier cancelled or suspended by the stipes) until the end of the High Court appeal.

The question arose in Batrouney v Forster (No 2) [2015] VSC 541, handed down by Justice Robson yesterday (see paras [167] – [193]).  It represents a further embarrassment for the Legal Services Board appointed receivers of David Forster’s practice, Hollows Lawyers, with a savage series of costs orders against the receivers in Mr Forster’s favour.  That followed findings that the receivers’ proceedings were in part misconceived, and that they breached more than one provision of the Civil Procedure Act 2010. The question was at what point did Mr Forster cease to hold a practising certificate and so cease to be entitled to claim costs of acting for himself under the Cachia v Hanes (1994) 179 CLR 403 at 411–413 exception to the rule that self-represented litigants are not entitled to costs for work done by themselves.

The question is a matter of significance to practitioners who get themselves fairly deep into trouble.  It means that those whose practising certificates are not renewed may continue to practice and earn income to put towards the legal costs of challenging that decision, and it also means that such practitioners may brief counsel directly in circumstances where, by virtue of Bar rules about direct access, they might not otherwise be able to.  And of course, it also means that if successful in such proceedings, they will get a costs indemnity against the time spent running their litigation.

Mr Forster is a man with his back to the wall, the subject of an avalanche of litigation brought by professional regulators.  Until recently, he had been singularly unsuccessful and much chastised.  It is probably fair to say that some people in the administration of justice, including the profession, would see him as a pariah.  It ought therefore be of some comfort to those responsible for the justice system that this result has obtained.  It suggests that the cab rank principle is alive and well, that judges are capable of dealing with each case impartially on its merits and according to law without being unduly influenced by past cases, and that the State will not protect itself where the law requires that it be dealt with.

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Admissibility of material relevant to penalty at the liability stage

In my experience, the Legal Services Commissioner generally assumes that material relevant to penalty is inadmissible at the liability stage.  So, for example, the Commissioner applied recently for leave to re-cross-examine a practitioner in a disciplinary hearing, after the close of evidence, in order to adduce evidence relevant to penalty by reference to ‘disciplinary priors’, even though the practitioner did not propose to give further evidence.

I knew there was some case which said that under legislation cognate with the Legal Profession Act 2004 there is, in law, just one hearing, but it is one of those many authorities which, despite this blog, got away from me, never to be found again.  But now I have stumbled across it again, and here it is, from Puryer v Legal Services Commissioner [2012] QCA 300, a unanimous decision: Continue reading “Admissibility of material relevant to penalty at the liability stage”

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A case about a bipolar lawyer

My practice has had me thinking a lot recently about the professional discipline of the mentally ill.  The legal profession has caught up with the medical profession by coming up with good policies which make clear that where mental illness can be managed in such a way as to protect clients and others to whom lawyers owe duties, managed practice by the mentally ill should be encouraged and supported.  For example, see the Legal Services Board’s policy.  The Board’s CEO, the Legal Services Commissioner Michael McGarvie, has been talking about the policy in recent weeks, and so has a Federal Court judge been talking about his own long standing clinical depression.  This post looks at what might be a sad case of a mentally ill lawyer who defended himself, and got me thinking about how mental illness is treated when it emerges in the course of investigation of disciplinary complaints.

If mental illness is not relevant to the test for professional misconduct, as the Commissioner argues and at least one text asserts, I wonder whether the Commissioner should be given a discretion not to prosecute where he finds it reasonably likely that VCAT would make a finding of professional misconduct, but the practitioner does not presently hold a practising certificate and their conduct is at least in part explained by mental illness. Continue reading “A case about a bipolar lawyer”

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VCAT’s President’s extra-judicial views on Barbaro in VCAT disciplinary hearings

In my last post, I briefly surveyed VCAT’s approach to the Barbaro principle in disciplinary proceedings against solicitors.  I just came across a presentation given by the Supreme Court’s Justice Garde, VCAT’s President which touches on this issue.  The presentation is titled ‘Alternative Dispute Resolution – Can it work for Administrative Law?’. It was given on 26 February 2014, and is linked to here.  The relevant part is: Continue reading “VCAT’s President’s extra-judicial views on Barbaro in VCAT disciplinary hearings”