concurrent duties – The Australian Professional Liability Blog

1 December, 2020

What the Gobbo royal commission recommended about regulation of the legal profession

Here is Commissioner McMurdo’s Summary and Recommendations from the Final Report, published yesterday, of the Royal Commission into the Management of Police Informants.

Reproduced below is what it says about regulation of the legal profession. There will be more complaints about barristers in the future. Victorian barristers would be well advised to take out the top up insurance available to members of the Victorian Bar which includes a primary layer insurance against defence costs of disciplinary investigations including by the Victorian Legal Services Commissioner. Continue reading “What the Gobbo royal commission recommended about regulation of the legal profession”

30 January, 201210 February, 2012

The delicious perils of qua; on suing yourself

Update: I knew that the study of autolitigation would be nicely developed somewhere. Former barrister Malcolm Park brought to my attention his article that was published in (Winter 1992) 81 Bar News 79-80, ‘On Both Sides of the Record’:

‘It is accepted law that a person cannot appear as plaintiff and defendant in the same proceedings. Our wandering reporter, Mal Park, has discovered that even apparently trite law is not of universal application. Sheriffs and even lawyers, like pop stars, may sometimes appear on both sides of the record. Continue reading “The delicious perils of qua; on suing yourself”

4 December, 20096 December, 2009

Commissioner’s obligation to charge dishonesty if he intends to allege it

Relatively recently, I posted on the question of whether a Bureau de Spank desiring to rely on a practitioner’s dishonesty or other form of conscious wrongdoing must expressly allege it in the charge, and discussed Walter v Council of Queensland Law Society Incorporated (1988) 77 ALR 228 at 234; [1988] HCA 8. Now, in Legal Services Commissioner v Madden (No 2) [2008] QCA 301 the Queensland Court of Appeal has had a go, and reversed a decision of the Court’s Chief Justice sitting on the Legal Practice Tribunal. The solicitor had previously been disciplined in relation to his trust account. He was charged with gross delay in litigation which resulted in applications by the other side to compel the achievement of various interlocutory steps. He dealt with those applications without advising his client, agreed on his client’s behalf to pay costs, withdrew money to pay those costs from monies held in trust on account of fees and disbursements, and then charged the client fees for his work in fixing up his own mistake. He also acted for both husband and wife in the preparation of a pre-nup, apparently stuffing it up, and then later acted in a matrimonial dispute for the husband alone, described as a particularly obvious conflict of duties.

The Chief Justice made findings of dishonesty in the absence of any allegation of dishonesty in the charge. One might say, in fact, that he went out of his way to do so. First he sought comment in relation to whether on the agreed facts, the Tribunal was free to draw inferences that dishonesty actuated the solicitor’s conduct, and invited the Commissioner to amend the charge so as to allow exploration of that issue. His Honour adjourned the hearing to give the Commissioner time to think about that. On the return of the hearing, the Commissioner declined the invitation to amend. So the Tribunal put out a document specifying, as a matter of procedural fairness, the inferences it was considering drawing, and invited argument. The solicitor swore an affidavit responding to the Tribunal’s document. The Commissioner’s counsel cross-examined the solicitor, but did not put it to him that he had acted dishonestly. The Tribunal then concluded that the solicitor had acted dishonestly, and decided to strike him off rather than go with the fine and reprimand recommended by the Commissioner. Ooffa!

‘Wrong way. Go back!’ said the Court of Appeal. It started with a general proposition:

’54 It is … a well recognised rule of practice in civil proceedings that, although the word “dishonesty” is not necessarily required, any charge of dishonesty must be made in clear terms. In a well known passage in Belmont Finance Corporation Ltd v Williams Furniture Ltd & Ors [1979] Ch 250 at 268 Buckley LJ said: Continue reading “Commissioner’s obligation to charge dishonesty if he intends to allege it”

12 April, 200912 April, 2009

Conflict of duties and the limited retainer

This is a post about David v David [2009] NSWCA 8 (the decision at first instance is at [2007] NSWSC 855). Karl Suleman has been good to professional negligence lawyers. He procured other Assyrians to invest in excellent sounding supermarket trolley schemes. ‘Give me $50,000’, he said to one investor, ‘and shopping trolleys will pay you $1,350 a fortnight for 10 years’. That is a return of 600%. Something must not have worked out the way it was supposed to, because the punters lost their dough and Karl went to jail. The punters sued their lawyers, and any other lawyers on the horizon. Continue reading “Conflict of duties and the limited retainer”

29 November, 2008

Solicitor gets three year break for multiple conflict findings

In Legal Services Commissioner v DJMH [2008] VCAT 2301, Deputy President McNamara’s tribunal ordered the solicitor not to practice before 1 July 2011 for multiple findings of acting in the face of a conflict. It is unfortunate that the reasons for decision do not allow an understanding of what was alleged. It had something to do with conflicts of duties in lending transactions described as ‘very serious indeed’. The gravamen of the charges, according to the Deputy President was that the solicitor: Continue reading “Solicitor gets three year break for multiple conflict findings”

10 October, 200811 October, 2008

Issac’s holiday; plea bargaining in disciplinary charges examined

Issac’s style of legal letter writing is legendary. There are some quite extensive private collections out there. I recall one letter said to have been penned by the man himself which began ‘Dear Sir, you are a petulant lunatic,’ and after some substantive words continued ‘You are a very small cog in a very big wheel and it seems that it will long stay that way.’

I have long been a fan of his extremely colourful and yet less-is-more webpage, which has said, for as long as I can remember, in yellow and red text surrounded by blue fire ‘We at Issac [B] and Co make a firm commitment to a flexible, approach to law’. Such heterodox ebullience can only be tolerated so long in the dark suited depressed salaryman world of the Melbourne legal fraternity, and the other day, the sombre might of the law came down on the iconoclast for what the humourless powers that be characterised as too much flexibility. Continue reading “Issac’s holiday; plea bargaining in disciplinary charges examined”

5 February, 2008

Application by appellant to remove respondent’s trial counsel from appeal dismissed

In Chen v Chan [2008] VSCA 2, President Maxwell and Justice of Appeal Redlich dismissed an application by the appellant for an order enjoining the respondent’s solicitor and counsel from acting in the appeal. The applicant alleged that there had been wrongdoing by the respondent’s lawyers at the trial. In fact that was one of the grounds of appeal. It is certainly the case that where a lawyer is to be a witness, he ought not continue to act, especially as an advocate. But their Honours held: Continue reading “Application by appellant to remove respondent’s trial counsel from appeal dismissed”

28 October, 200723 October, 2008

A non-exhaustive bibliography on lawyers’ conflicts of duties between insurer and insured

Speaking, as I was in the last post, about AILA’s Geoff Masel lecture series, here is the 2006 lecture, delivered by Tony Scotford of Ebsworth & Ebsworth’s Sydney office. It is yet another contribution to the much talked about but little done about problem of insurer-appointed defence lawyers in liability claims and their potentially conflicting duties to the insurer and the insured. I hope he will not consider me too impertinent in reproducing his bibliography as an incomplete list of sources on this question (featuring papers by both Geoff Masel and Greg Reinhardt). Continue reading “A non-exhaustive bibliography on lawyers’ conflicts of duties between insurer and insured”

8 August, 200711 August, 2007

Solicitors’ liability paper; conflicts of lawyers acting for insurer and insured

Here’s a link to a little article on the law relating to the possible conflicts of duties faced by a lawyer retained by a liability insurer to act for its insured in the defence of proceedings against the insured. It discusses 3 English cases:

Brown v Guardian Royal Exchange Assurance;
TSB Bank v Robert Irvin; and
Zurich Professional v Karim.

And here’s a link to an excellent solicitors’ liability publication from Barlow Lyde & Gilbert. It deals with the new professional conduct rules in England, solicitors’ liability for mortgage fraud, lawyers’ obligations to their opponents, and an unusual case in which liability insurers were ordered by the Court to pay £1 million in legal costs of a failed defence even though the limit of indemnity had been exhausted by the judgment. That was ordered on the basis of these apparently unremarkable circumstances:

‘(i) the insurers determined that the claim would be fought; (ii) the insurers funded the defence of the claim; (iii) the insurers had effective conduct of the claim; (iv) the insurers fought the claim exclusively to defend their own interests; and (v) the defence failed in its entirety.’

8 August, 200711 August, 2007

Freshfields partner gets whacked $140,000 over conflict of duties to concurrent clients

Freshfields used to be Marks & Spencer’s go-to lawyers. Then they fell out of favour a bit. But they were still acting for Marks ‘n’ Sparks on one relatively small contract. A key partner then decided to accept instructions to act for a consortium trying to take over the supermarket chain. If the takeover went hostile, that one contract was likely to be contentious. There was a potential conflict of duties, the Court found in Marks and Spencer Group Plc v Freshfields Bruckhaus Deringer [2004] EWCA Civ 741, and restrained the firm from acting. Three years later, the wheels of justice have ground on, and the disciplinary sequelae of the injunction application have come to a head. Barry O’Brien copped a £5,000 fine from the Solicitors Disciplinary Tribunal, and a £4,000 fine for bringing the profession into disrepute. He pleaded, and ‘volunteered’ to pay prosecution costs of £50,000 which suggests that he had a good long think before pleading. Continue reading “Freshfields partner gets whacked $140,000 over conflict of duties to concurrent clients”

18 July, 200720 July, 2007

The incapacitated client

Here’s an interesting case about lawyers, incapacitated clients, paternalism, and the right to be represented. An Alzheimers affected woman hired a beak to oppose a guardianship application brought by her brother. The court appointed another lawyer to act for her, suspecting that the man she professed to want to marry had in fact been behind the first hiring. The Court-appointed lawyer successfully applied to remove her own lawyer for a conflict of duties owed to her and to the man. An appeal court in the US capital reversed the decision, saying that free will cannot be countermanded on the basis of a hunch as to competence. Sounds like an important principle to me, else some mandarin in the Federal Government might decide that a doctor was not only an illegal alien of thoroughly rotten character but incompetent to boot and appoint a nice government lawyer resident in Nauru to act for him. The NSW Law Society has published a set of Client Capacity Guidelines for Civil and Family Law matters. The diagram featured is from it.

I acted for a solicitor sued by a former client. She said her medication affected her so at the mediation that the lawyer should pay her the difference between the millions she should have got and the paltry amount she considered she did get. I know, it didn’t make sense to me either. Anyway, during the professional negligence case, the lady seemed to flicker in and out of competence depending on whether an adjournment was needed. Continue reading “The incapacitated client”

16 July, 200713 November, 2007

Chinese wall holds up at investment bank

Update, 13 November: Clayton Utz’s take on the case here.

Here’s a long Sydney Morning Herald article about the latest big Chinese wall case, this time not in the context of a law firm, but of Citigroup, an investment bank. Here’s The Age‘s shorter version. The case is ASIC v Citigroup Global Markets Australia Pty Ltd (No. 4) [2007] FCA 963. Here’s a summary by Corrs Chambers Westgarth. Here’s Minter Ellison’s effort. And here’s Allens Arthur Robinsons’ take. The bank’s Chinese wall was declared ok in a 40,000 word long judgment, and his Honour found that Citigroup had successfully contracted out of a fiduciary relationship from the outset, in its retainer letter. But the judge did have this to say about one of the Bank’s key witnesses at [454]ff: Continue reading “Chinese wall holds up at investment bank”

27 May, 200728 May, 2007

Updates: big words, Texan legal writing, conflicts of duties

In my post “Judge uses big word”, I commented on President Mason’s use of “tergiversation”. Now David Starkoff at Inchoate has noted another’s analysis of the odds of each of the High Court judges other than Justice Kirby being responsible for the appearance of “epexegetical” (which seems to mean “explanatory in a way supplementary to the principal or original explanation”) in a decision on migration. (10/1 odds: Justice Gummow.) Love how the judiciary tends to save up these little diamonds of language for those least likely to have the resources to look them up.

And, by way of update to my post “Finally, some scholarship on Australian lawyers’ conflict of duties”, here is a long article on conflicts of duties in America, “I’m All Verklempt!” by Kendall M. Gray et. al., including a long analysis of the Yanks’ position on Chinese walls. The relationship between establishing a conflict of duties and the entitlement to compensation of one of the people to whom the conflicting duties is owed is a bit complicated in Australia. It certainly does not follow that every breach of fiduciary duty gives rise to a right to money in the victim from the lawyer. But in Texas, there is a principle of fee forfeiture which applies in cases of clear and serious breaches of fiduciary duty, a remedy born in Burrow v. Arce 997 S.W.2d 229 (Tex. 1999). Where an attorney was found to have grossly overcharged, fee forfeiture was imposed so that the attorney lost all his fees rather than just those which exceeded a reasonable fee: In re Allied Physicians Group, P.A., No. 397-31267-BJH-11, Civ. A.3:04-CV-0765-G, 2004 WL 2965001, at *5 (N.D. Tex. Dec. 15, 2004) (unpublished), aff’d, 166 F. App’x 745 (5th Cir. 2006).

Mr Gray’s style cannot be described as stuffy, and exemplifies what is good about Texas, namely plain talking: Continue reading “Updates: big words, Texan legal writing, conflicts of duties”

18 March, 2007

No absolute bar in England to representing and opposing same client in two different matters

Goubran shares my view that a solicitor can act for and against the one man at the same time. Just not in relation to the same thing. In fact, there is a degree of relation which makes it impermissible, and Goubran sets out the practically meaningless judicial utterances on the test for the requisite degree of relation. He does so by tackling the following passage from Bolkiah v KPMG [1999] 2 AC 222, 234 (Lord Millett) which I have always thought to be overarching: Continue reading “No absolute bar in England to representing and opposing same client in two different matters”

18 March, 200718 March, 2007

Role of professional conduct rules in conflict of duties injunctions

On the relationship of the conduct rules to injunctions to restrain lawyers acting in the face of a conflict of duties, Goubran cites some useful authorities. I have always been astonished by what I thought was the Australian courts’ universal and complete disregard in these kinds of applications to the professional conduct rules’ conflicts provisions. All the moreso since the introduction of the rule dealing with current-client and past-client confidential information conflicts was introduced into the Law Institute’s rules of conduct for solicitors. But Goubran’s diligence has turned up the following judicial comments on the use to be made of the rules: Continue reading “Role of professional conduct rules in conflict of duties injunctions”

17 March, 200718 March, 2007

Finally, some scholarship on Australian lawyers’ conflicts of duties

Finally, someone has gone a long way towards synthesising the law relating to injunctions to restrain lawyers from acting in the face of a conflict of duties. The Melbourne University Law Review article is “Conflicts of Duty: the Perennial Lawyers’ Tale — A comparative Study of the Law in England and Australia”, [2006] MULR 4. Sandro Goubran has done an extraordinary amount of reading and has distilled things well. The last such effort was Matt Connock’s ‘Restraining Lawyers from Acting in the Face of a Conflict: Discussion and Advice in Australia’ (1995) 12 Australian Bar Review 244. (There is a whole blog devoted to the subject in America.)

As an index to pin-point citations in relation to the various issues which arise, the work will be of immense practical value to counsel who have to argue these relatively common applications. I wonder whether Goubran thinks, having read all the cases, it was rewarding academically. I have also read most of them, and the abiding impression I have is that — certain judges aside — this area of the law is one in which judges making it up as they go along is more than usually rife. Further, no one reads and considers the same 10 of the 100 or so generally single judge decisions swimming around out there on the question before deciding these cases. The lines of authority are fractured. Goubran’s article might do something to remedy this, but that all depends on how many people read the MULR I suppose.

Goubran is with me in being mystified by the sometimes hysterical reaction adverse to Justice Brooking’s judgment in Spincode v Look Software (2001) 4 VR 501, and astute to point out that the duty of loyalty is only ever considered in the context of the taking up of the cudgels against a former client in the same or a closely related matter.

I have selected two matters raised by him in the two successive posts for special comment.

9 February, 2007

Chief Legal Counsel at BHP-Billiton cans firms’ conflicts awareness

Lawyers Weekly‘s 2 February 2007 edition reported the following comments from John Fast, Chief Legal Counsel of BHP-Billiton:

‘“The area where I think the biggest difficulties arise is in … conflicts, and that is an area where increasingly firms that do not have a very clear conflicts of interest policy are at a disadvantage, and will lose business,” he said. Continue reading “Chief Legal Counsel at BHP-Billiton cans firms’ conflicts awareness”

3 January, 200719 February, 2007

The solicitor and “the other side’s witness”, part II

Part I is the extraordinary story of a leading labour lawyer in Melbourne who was found to have induced breach of contract in taking a statement from an ex-employee of the other side in a class action in which the lawyer was the plaintiffs’ solicitor. Unbeknownst to him, the ex-employee continued to be bound by a confidentiality agreement.

Part II is a simple case in which the defendant’s solicitor applied to enjoin the plaintiff’s solicitor from continuing to act, based on a conflict of duties, Grego v Great Western Insurance Brokers Pty Ltd [2006] WASC 284. It was a workers’ compensation case brought by a fisherman in relation to an injury said to have been sustained on the remote Abrolhos Islands. The defendant said the payment of wages by the company which engaged in the fishing activities (of which the plaintiff and his wife were the directors) was a retrospective fiddling of the books after the alleged accident. The plaintiff interviewed the defendant’s accountant in relation to discovered documents, having alleged a fraudulent conspiracy to claim loss of wages. The accountant willingly cooperated in the preparation of an affidavit. Its contents were not damaging to the plaintiff [20]. This was said to amount to an “obvious breach of the duty of confidence” owed by the accountant to the plaintiff as his client.

There is no criticism of the defendant’s solicitor in the judgment because there is no property in a witness. The accountant must have woken up to the inappropriateness of what he was doing, though, because he sent the draft affidavit to the plaintiff’s lawyer for comment before signing.

When told of this, the defendant’s lawyer objected, saying that the accountant had disclosed a privileged document to the plaintiff’s lawyer. He said a draft witness statement is privileged under the litigation limb of legal professional privilege (a normally uncontroversial proposition) and the accountant had interfered with the defendant’s privilege by providing it to the plaintiff’s solicitor. The accountant did go on to swear an affidavit in the terms of the draft, having taken counsel’s advice and having been advised by the plaintiff’s solicitor that it was entirely a question for the accountant whether he signed the affidavit or not (the judge found at [39] that this constituted the implicit conveying of the plaintiff’s consent to the swearing of the affidavit). So by the time of the injunction application, that had already occurred, and could not be restrained. There was no attempt to restrain the use of the affidavit in the litigation. The defendant applied for the plaintiff’s solicitor to be restrained on the basis that the solicitor had:

“2.1 wilfully infringed against the legal professional privilege of the [defendant] in a draft affidavit;

2.2 have placed [himself] in a position where [his] duties to the plaintiff and [his] duties to a material witness necessarily conflict;

2.3 by [his] actions have created a perception that [he] interfered with a witness in the giving of evidence.”

His counsel’s argument met with about as little success as is possible. Justice Peter Blaxell said: Continue reading “The solicitor and “the other side’s witness”, part II”

29 October, 200625 June, 2007

Roisin Annesley’s Victorian Barristers’ practice guide

The Bar has produced a practice guide. It is a great achievement and stands as a beacon for the Law Institute’s future efforts at promulgating knowledge of the practice rules. The Bar actually has something called the Professional Standards Education Committee. Written by Roisin Annesley, it was launched by Victoria Marles, the Legal Services Commissioner on 18 October 2006, and distributed free to every member of the Bar. Annesley has done a lot of work as Counsel Assisting the Legal Profession Tribunal (and continues to do occasional work assisting the Legal Practice List at VCAT). A doyen of professional discipline, Paul Lacava SC, and a judge who has excoriated Professional Standards, Justice Gillard, are credited with substantial involvement. It has chapters on: Continue reading “Roisin Annesley’s Victorian Barristers’ practice guide”