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”

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”

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.

Solicitor-executor’s work not legal work

Patterson v S [1998] VLPT 11 is a decision of the Legal Profession Tribunal dealing with a sole practitioner who was the executor of a priest’s will. It held that executors’ work carried out by an executor who happens to be a solicitor is not legal work, and so fees for the work were not within a clause in the will entitling professional executors to charge their “usual or reasonable charges”. Continue reading “Solicitor-executor’s work not legal work”

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”

Lawyer’s defamation suit against former client founders on absolute privilege

In Sexter & Warmflash, P.C. v Margrabe, 2007 NY Slip Op 00065, a woman hired lawyers to represent her and her brother in a dispute with a cousin. The lawyers charged a reduced fee but could charge a 50% premium upon resolution of the dispute. The dispute was settled, but the woman thought the lawyers were progressing too fast towards final resolution (and their premium payment) at the expense of her interests. She fired them and copied her brother in on her none-too-complimentary letter of dismissal, which she also sent to two other lawyers she had retained for second opinions. Essentially, she alleged a concurrent conflict between duty and interest, as well as incompetence. The lawyers sued her in defamation for at least US$1 million, and then represented themselves, a step which raises real questions in my mind about their strategic competence, one of the things criticised in the controversial letter. The case was summarily dismissed. The New York Supreme Court Appellate Division‘s statement of the law of absolute privilege is reproduced: Continue reading “Lawyer’s defamation suit against former client founders on absolute privilege”

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”

Litigant may not represent himself in those bits barrister spurns

In Malouf v Malouf [2006] NSWCA 83, (2006) 65 NSWLR 449 the NSW Court of Appeal, led by President Mason disapproved of the practice allowed below of a litigant appearing for himself in relation to some points and being represented in relation to others. Warwick Malouf had sued his brother for fraud, and represented himself, and lost ([2005] NSWC 9). He appealed, claiming that the judge had not assisted him sufficiently. What seems likely to have happened is that Mr Malouf filed a fairly average set of grounds of appeal, retained counsel who told him so, drafted some good ones, which were tacked onto the existing grounds by Mr Malouf, and the barrister said he could not support Mr Malouf’s grounds and would only make advocacy by reference to the new ones. Mason P said of this ploy that it had the tendency of much mischief: Continue reading “Litigant may not represent himself in those bits barrister spurns”

Gullible but not dishonest solicitor gets 6 months for failing to report own client to authorities

It happened in England (see their Law Society’s sophisticated guidelines) in R. v McCarten [2004] NICA 43, but a similar law is coming our way: this month, the Anti Money Laundering and Counter Terrorism Financing Bill 2006 was introduced into federal parliament. Another bill is anticipated which will extend it specifically to lawyers, discussed below. (Update: see the Blakes take here.)

The English cases are digested in this Lawyers’ Weekly article. In R v. Griffin, a proceeds of crime case, the solicitor was jailed for 15 months, though in circumstances of wilful blindness: Continue reading “Gullible but not dishonest solicitor gets 6 months for failing to report own client to authorities”

Dob-in rule lurks in Victorian solicitors’ practice rules

A newish conduct rule compels solicitors to report every dishonest act by another practitioner, and every act which is prejudicial to the administration of justice or which would diminish public confidence in its administration. This is not just my fancy; the Law Institute itself says that the rule requires dobbing in and is not only about self-reporting. Relevantly, rule 30 of the Professional Conduct and Practice Rules 2005 says (and this is not a quote): Continue reading “Dob-in rule lurks in Victorian solicitors’ practice rules”

Misconduct constituted by barrister’s misleading mediation statements

In Legal Services Commissioner v M [2006] LPT 012, a leading Brisbane barrister was fined $20,000 (his fees of $9,100 plus $10,900 penalty) for engaging in fraudulent misrepresentation on the instructions of his client in a mediation in which the insurer was induced to pay the barrister’s cancer-riddled plaintiff client over $1 million on a claim based on a near-normal life expectancy. He was found guilty of professional misconduct, and publicly reprimanded (I wonder whether a solicitor was sitting blithely by and escaped prosecution). Frankly, I reckon he was lucky to get away with a fine and reprimand given that he contested the charge by reference to the “startling” contention, described by the Tribunal:

“[25] The respondent argues that his conduct in continuing to rely on the Evidex reports without disclosing the cancer facts was not tantamount to some representation that he was not aware of facts that could deleteriously impact on longevity.  His case characterizes the compromise negotiations as “commercial”, conducted on a tacit, common assumption that, in deciding whether to settle, the parties would rely exclusively on their own resources and information.  There would not, it is said, have been a reasonable expectation that influential information communicated during the negotiations would not knowingly be false.”

But the content of what must surely be the pre-eminent professional non-client duty – not to mislead — is not well-known, and litigation is so obese with toleration of falsehoods, that I have some limited sympathy for the confusion the barrister claims to have fallen into, having researched the issue. Because, contrary to the idiotic utterances of some regulators, legal ethics are not intuitive.  There is no “gut feel” test. Legal ethics frequently involve a duty not to volunteer the truth. Continue reading “Misconduct constituted by barrister’s misleading mediation statements”

The duty not to mislead in negotiation

I would be very surprised if the most commonly committed species of misconduct were not engaging in misleading conduct in negotiation. But there is very little written about it. Justice John Byrne of the Supreme Court of Queensland, sitting in the Legal Profession Tribunal, in Legal Services Commissioner v Mullins [2006] LPT 012 (see next post) footnoted a number of articles on the topic, most of which have hyperlinked citations: Continue reading “The duty not to mislead in negotiation”

Lawyer claiming inexplicably high fees against other side restrained from acting

In the case of Brogue Tableau Pty Ltd v Tottle Partners [2006] WASC 273, Master Sanderson of the Supreme Court of Western Australia, exercised the Court’s inherent jurisdiction to restrain a firm from acting to protect the administration of justice. The fees they had charged their client, and which they were seeking against the other side on behalf of the client, seemed inexplicably high. The other side suggested they had overcharged, and the judge said the administration of justice could not tolerate them continuing to act in those circumstances. Continue reading “Lawyer claiming inexplicably high fees against other side restrained from acting”

No litigation privilege in anticipation of non-”truly adversarial” proceedings

Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2006] NSWSC 530 says the litigation limb of legal professional privilege at common law is not available where the communication was brought into existence for the dominant purpose of use in or preparation for litigation which is not truly adversarial (the situation is no better under the Uniform Evidence Acts, where the litigaiton limb is limited to anticipated litigation in courts, defined to mean places “required” to apply the laws of evidence). The litigation in point was administrative review by the AAT. Justice Neil Young made a similar finding in AWB v Honourable Terence Rhoderic Hudson Cole [2006] FCA 571, in relation to documents prepared for use in, or preparation for, the AWB Royal Commission. I wonder whether we will one day see a suit against a lawyer for negligently failing to inform clients of this exception to what is generally understood to be the unfettered secrecy of lawyer-client communications.

The administration of justice ground for restraining solicitors from acting summarised

In Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404, the facts and outcome of which are described in the previous post, Justice Young went to some lengths to summarise the law on the third basis articulated by Brooking JA in Spincode for restraining solicitors from acting. The relevant parts of the decision are reproduced below. Continue reading “The administration of justice ground for restraining solicitors from acting summarised”

Mr Howell releases Client from implied undertaking as to documents

Alessi’s Case is a long-running application to set aside a costs agreement commenced in the Legal Profession Tribunal in 2003. The Alessis succeeded in having their solicitor’s costs agreement cancelled and two bills set aside in [2005] VLPT 18. The latest decision — [2006] VCAT 149  is just a little one about an application by the Clients to be released from what used to be known as the Home Office v Harman undertaking, that is, the undertaking by a litigant or other person who has received information through a process of compulsion such as discovery not to use the documents for any purpose other than the prosecution of the matter in which the information is produced.

The solicitor had discovered over 1,000 documents. There were related court proceedings in which the solicitor was suing the Alessis for his fees, in which a company associated with the solicitor was suing on a loan to a company associated with the Alessis, and in which various consultants engaged by the solicitor were suing the Alessis for fees. The Alessis applied for a waiver of the implied undertaking en masse on the basis of their general relevance to one or more of the 6 related proceedings. That application was granted. Continue reading “Mr Howell releases Client from implied undertaking as to documents”

Law Institute Journal tallies the score on Spincode

I have never understood what it is about Justice Brooking’s extended obiter on the fiduciary duty of loyalty in Spincode  Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 which prompted such apoplexy. I would have thought that the second most obvious conflict of duties (after acting concurrently for two opposing parties) would be to swap sides in the one dispute. I think it is in fact this: people hear “duty of loyalty” and think “I can’t act against anyone I’ve ever acted for? No way!” But the only content of the duty of loyalty is not to “take up the cudgels against a former client in the same or a closely related matter”. What’s not to like about such a proposition? Nevertheless, it is a substantial departure from the House of Lords’s position and finds little favour in NSW. Continue reading “Law Institute Journal tallies the score on Spincode”

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”

Detailed new conflict rules commence in England

Solicitors’ Practice (Conflict) Amendment Rule 2004

(1) (Introduction)

(a) This rule sets out provisions for dealing with conflicts of interest other than
those conflicts in relation to conveyancing, property selling or mortgage
related services which are dealt with in rule 6.

(b) This rule applies to a regulated individual and a regulated practice.

(c) Conflicts between the duty of confidence and duty of disclosure owed by an
individual or a practice to two or more clients are dealt with in rule 16E. Continue reading “Detailed new conflict rules commence in England”