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Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)

The legendary foundation author of Quick on Costs, Roger Quick, has asked me to put this old workmanlike paper on my blog so that he can cite it and link to it in the second edition of that monumental text which he is kindly working on for all our benefits.

What follows does not deal with any developments in the law since 2010, or indeed anything I have learnt since 2010, when I delivered the paper, and so it is out of date, but it might still be of use in some jurisdictions which have not adopted the Legal Profession Uniform Law or by analogy in some cases which are governed by that law.  Sorry about the formatting, which is the product of copying and pasting a Word document into WordPress.

1. Summary

This paper does not deal with contingent, or no-win no-fee retainers.  In relation to all other matters, the take-home points are these: Continue reading “Costs Disclosure Obligations Under the Legal Profession Act 2004 (Vic)”

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Costs recovery in pro bono cases in Victorian state courts: Part 3

I was asked to talk to my colleagues at the Victorian Bar recently in relation to costs recovery in pro bono cases. It is now more certain that costs may be recovered from the other side by victorious litigants who engage their lawyers on the basis of a greater variety of pro bono arrangements. That is as a result of both recent developments in the judge-made law and changes to the Supreme and County Courts’ rules. Over the last few days, I published parts one and two of the paper I distributed. What follows is the third and final part, which considers different kinds of client-favourable costs agreements (some quite esoteric) and analyses their indemnity principle implications.  It also provides some thoughts on how to draft costs agreements for work done otherwise than on a purely commercial basis, and how to ensure counsel get paid. Part one is here and part two here

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Species of client-favourable costs agreements

Options available to lawyers who wish to do work at less than their usual rates for non-commercial reasons include:

(a) not making any arrangements as to fees at all;

(b) charging your usual rates and leaving it to your discretion whether you send out a bill, or whether you forgive some or all bills given in the event that certain outcomes obtain;promising to do the work for free;

(c) agreeing to do the work at a reduced rate;

(d) doing the work on a no win = reduced fee basis;

(e) doing the work no win = no fee;

(f) doing the work no costs order = no fee;

(g) doing the work on no actual recovery of costs / compensation / costs or compensation = no fee basis. Continue reading “Costs recovery in pro bono cases in Victorian state courts: Part 3”

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Does the Legal Services Board have the power retrospectively to excuse inadvertently practising briefly without a practising certificate?

As with most years, no doubt scores of Victorian lawyers forgot to renew their practising certificates last year.  For months, in some cases, this situation was allowed by the regulators to persist without intervention.  In Victorian Bar Inc v GSL [2006] VCAT 435 the VCAT, constituted by Judge Bowman, Peter Jopling QC, and Ms F Harrison made clear that the disciplinary Tribunal expected regulators to be proactive to prevent practitioners inadvertently practising uncertificated. Eventually, at least in some cases, the regulators seem to have raised the issue with some practitioners whose sudden apparent cessation of practice at a young age seemed unlikely.

May I respectfully suggest that you go and check, now, whether you actually have a practising certificate for the current financial year.

The question now that the regulators have apparently complied imperfectly with VCAT’s guidance is what ought to happen?  Should the practitioners who are close to blameless for practising without a certificate be given a new one with retrospective effect (some were told, for example, by their office manager that the applications had been lodged before the end of the year, and were entitled to assume that their existing practising certificate had ongoing operation pending the Board getting around to dealing with the application, by virtue of a legislative provision to that effect discussed below). Or should the full consequences of the law, including disciplinary investigation, and the refunding to clients of fees for work done while uncertificated (s. 10, LPUL), be brought to bear? The latter approach has the disadvantage of causing lawyers’ professional indemnity insurer to cancel cover during the period of non-certification and the Fidelity Fund may be unavailable to clients of the lawyers in question in relation to conduct engaged in while uncertificated.

What VCAT said was:

Continue reading “Does the Legal Services Board have the power retrospectively to excuse inadvertently practising briefly without a practising certificate?”

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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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Efficacity of lawyers’ retainers effected by written instructions procured by crash n bash agents

The Local Court of NSW has released for publication a considered decision about costs in what it treated as a test case, Foot v Burrett [2013] NSWLC 26.  A man’s car was damaged.  It was taken to panel beaters in Marrickville.  He there signed a document in order to get use of a replacement car while his car was being repaired.  He did not have to pay until later and it seems to have been anticipated that the repairer would pursue the cost from the allegedly negligent other driver on the man’s behalf.  The transaction was something like (but probably not) the man giving the repairer an equitable assignment of his right to damages for loss of the use of his vehicle against the allegedly negligent other driver in return for the free use of a car.  The document authorised Boston Commercial Services Pty Ltd to act for the man in recovering the costs of hiring the replacement car from the allegedly negligent driver who allegedly caused the property damage.  The document also said:

‘I hereby consent to Boston instructing Dejure Commercial Lawyers as my Solicitor on the record in respect of any proceedings commenced in relation to this retainer and I hereby retain Dejure on the terms and conditions of Boston’s existing retainer with Dejure….’

Proceedings were commenced in the man’s name.  Dejure Commercial Lawyers went on the record for him.  It is apparent that the man was required by the circumstances of the litigation to have an involvement in it.  The other driver lost.  He was ordered to pay costs.  He invoked the indemnity principle, saying that the man had no liability to pay Dejure Commercial Lawyers’ costs and so could not recover a partial indemnity against any such liability in the form of party-party costs.  The Court, treating the question as a test case, declined to accept that argument.  The decision casts doubt on the correctness in law of positions adopted by various legal disciplinary bodies as to the impropriety of lawyers accepting instructions from interested third parties in writing obtained from the agent.  The Court seemed a lot less perturbed by this mode of retainer than the Victorian Legal Services Commissioner tends to be, saying helpfully: Continue reading “Efficacity of lawyers’ retainers effected by written instructions procured by crash n bash agents”

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Important new case on when retainer by multiple clients will be taken to be several rather than joint

I have always been a bit dubious about the proposition to be found in the texts that in the absence of specification one way or the other, a multiple retainer is presumed to be a several retainer (so that the clients are severally responsible for their fair share of the costs) rather than a joint retainer (so that the clients are each responsible for the whole of the costs associated with acting for either or both).  The South Australian Supreme Court has gone through the authorities and said that there is no presumption, but the onus of proving a joint retainer falls on the solicitor, and the mere fact that joint instructions are given or that representation advances joint interests is not sufficient to found an inferred agreement to that effect: D A Starke Pty Ltd v Yard [2012] SASC 19.

So: if you’re one of several clients your lawyer has in relation to one matter, and you want to limit your liability to your fair share of the costs, you should stipulate for ‘several liability’, and if you’re a lawyer, and want to be able to recover all of the costs from each client, you should stipulate for ‘joint and several liability’.  And if you’re one of a number of clients against whom a lawyer is seeking to recover fees, wherever the written costs agreement is silent on the question, then so long as you believe that it was not actually agreed between you, albeit by implication rather than express communication, you should not agree to pay anything more than your fair share, which might be 50% if the work benefitted each of the clients equally (as where husband and wife conduct litigation over jointly owned matrimonial property) but which might be quite different from the other client’s/s’ faire share, as in this case.

Two things occur to me.  First, in a joint retainer, one client may well be an associated third party payer vis-a-vis the lawyer in respect of that client’s promise to pay the other client’s fair share of the lawyer’s fees.  I cannot immediately think of how this might affect the solicitor-client relation, but no doubt it might.  Secondly, in a regime such as that under the Legal Profession Acts where costs agreements must be written or evidenced in writing, all the major terms of the agreement are required to fulfil that requirement.  This case was decided by reference to the law of the one state which does not have a Legal Profession Act (South Australia).  A lawyer seeking to rely on an implied term (and therefore one very likely not evidenced in writing) might have difficulty in establishing such a term by virtue of the writing requirements.

What the Supreme Court of South Australia’s Justice Kourakis said on this subject is set out below:

Continue reading “Important new case on when retainer by multiple clients will be taken to be several rather than joint”

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Who can be pinged for costs disclosure defaults under the Legal Practice Act, 1996?

The Legal Services Commissioner’s office and its predecessors have apparently long taken the view that the obligation in s. 86 of the Legal Practice Act, 1996 to provide certain costs disclosures to clients at the time of retainer is imposed on the solicitor with responsibility for the file regardless of whether or not the retainer is with them personally, with a firm of which they are a member, or with a company of which they are a director.  The Law Institute had a go at a solicitor on this basis in 1992 and 1999: Victorian Lawyers RPA Ltd v Vernon, unreported T0070 of 2002, 17 May 2002, Registrar Howell and Victorian Lawyers RPA Ltd v GAVS [1999] VLPT 4. Those attempts failed, but not squarely on the basis that the charges were incompetent for having been brought against the wrong person.  Now the question has been fully argued and decided contrary to the Commissioner’s position. According to VCAT, the obligation was prima facie imposed exclusively on the retained entity. In the case of incorporated legal practitioners, there were such provisions under the 1996 Act attributing liability to directors, but not non-director employees.  Quite amazing really that this point was first squarely decided 15 years into the 1996 Act’s operation. Continue reading “Who can be pinged for costs disclosure defaults under the Legal Practice Act, 1996?”

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More on the need for specific instructions before commencing proceedings on behalf of others

Update: See now Daniel Warents, ‘An Unwarranted Approach: Costs Orders Against Solicitors Acting Without Authority’, a detailed and learned review of the cases: link.

Update: See now Doulman v ACT Electronic Solutions Pty Ltd [2011] FMCA 232.  A solicitor accepted instructions from a fellow solicitor to recover fees allegedly owing by a client.  The proposed plaintiff was a company which the fellow solicitor had until shortly before the retainer been authorised to represent.  The solicitor, acting honestly, accepted these instructions from the fellow solicitor at face value: the proposed plaintiff was well known to him.  He found out only far down the track that the proposed plaintiff had been sold by the fellow solicitor before the instructions were given so that the solicitor had instituted litigation and bankrupted the defendant when he had no instructions to do so from the company.  The proceedings were a nullity.  Everything had to be unravelled.  The solicitor was ordered to pay the costs of this exercise on a party-party basis: he should have done a company search or sought written confirmation of the fellow solicitor’s authority to bind the company. There is a one-paragraph note of the case at ALJ vol 85 no 9 (September 2011) at 537.  Thanks to the Law Institute Library through the LIJ’s ‘In Reference’ page for bringing the case to my attention.

Original post: I had to look hard recently at the cases about lawyers’ obligation to have proper instructions before commencing proceedings on behalf of others. Pretty obvious really, but the grey area exists where lawyers receive instructions from agents of the client, especially where the agent is specifically authorised to retain solicitors, but not specifically authorised to commit their principal to litigation.  Victorian disciplinary tribunals have dealt with such conduct by meting out penalties ranging from a fine of $1,000 in 2011 money to recommending that the practitioner be struck off the rolls.  As this astonishing divergence of dispositions attests, everything depends on the precise facts and the motivations of the practitioners.

Further to this related post, what follows is my case notes of the three Victorian disciplinary decisions I am aware of dealing with this form of conduct warranting discipline.  Are you aware of any similar cases in Victoria or elsewhere? Continue reading “More on the need for specific instructions before commencing proceedings on behalf of others”

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Solicitors’ exposure to falling between two stools in solicitor-client taxations revealed

Update, 16.2.12: See now Ipex ITG Pty Ltd v McGarvie [2011] VSC 675.

Original post: A recent decision of the Supreme Court’s Costs Court means that solicitors have only a non-extendable 60 days in which to seek taxation of counsel’s fees, even though clients and third party payers have an extendable 12 months in which to seek taxation of the solicitors’ fees, including disbursements such as counsel’s fees: Kong v Henty Jepson & Kelly Pty Ltd, unreported, Associate Justice Wood, 4 April 2011.  The same result was reached in I.J.R. Homes v MDM Legal Services SCI, unreported, Associate Justice Wood, 12 September 2011, and the Costs Judge’s comments in that order are reproduced at the end of this post too.  Unless the barrister may be joined to and bound as against the solicitor to the outcome of the taxation of the solicitors’ fees initiated after the expiry of the time allowed to the solicitor for seeking taxation of the counsel’s fees, the solicitors run the risk of the client being liable to them only for the taxed down amount of counsel’s fees while the solicitors remain liable to the barrister for the full whack.

And the solicitor cannot get around the problem by seeking to procure their client to seek taxation of the counsel’s fees directly against counsel, because, the Supreme Court says, clients have no standing to do so.  Though the Court has a discretion under s. 3.4.42 to join ‘concerned law practices’ and order that they be bound by the outcome, it did not make such orders in the Kong Case joining the barrister, though for reasons peculiar to that case, the Court’s reluctance to do so may not be as great in future. All of that applies where the traditional relations between client, solicitor and counsel are entered into; where the client has a costs agreement with the barrister, things are different, and less problematic for solicitors.

But for the fact that solicitors tend to disregard the law of costs and carry on as they always have, no matter what the law is and how it is changed, four reactions might be expected in Victoria and the many other states with analogous statutory provisions:

1.   Solicitors will commence prophylactic applications for taxation of counsel’s fees within 60 days after service on them of the fee slip, in case the client later seeks to tax the solicitors’ bills (but they may well have to pay the costs of doing so out of their own pockets);

2.  Solicitors will require counsel to contract directly with clients in relation to fees, which many counsel will not be prepared to do;

3.  Solicitors might seek to contract out of clients’ rights to review counsel’s fees as disbursements on their bills, or to contract out of their rights to review counsel’s fees as disbursements on their bills, once their right to seek review of counsel’s fees has expired, but that is likely to be effective only where the clients and third party payers are ‘sophisticated’ within the s. 3.4.2 meaning of that term, since agreements about costs which purport to contract out of normal (as opposed to ‘sophisticated’) clients’ and/or third party payers’ rights to taxation are void: see ss. 3.4.26(5) and 3.4.31; or

4.  Solicitors might make it a term of their costs agreement with counsel that counsel indemnify the solicitors against any difference between the amount paid by the solicitors to the barrister and the amount payable by the client to the solicitors in respect of those same fees, but any such agreement would have to have a degree of sophistication, to avoid counsel taking the rap for a solicitor’s default (such as where counsel provide adequate information for the solicitor to provide disclosure of counsel’s fees to the client, but the solicitor fails to do so, with the result that the solicitor’s taxed costs, including disbursements such as counsel’s fees, are reduced under s. 3.4.17(4).

How are similar problems treated in other states’ and territories’ taxing and review jurisdictions?

Continue reading “Solicitors’ exposure to falling between two stools in solicitor-client taxations revealed”

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Qld solicitors referred to Legal Services Commissioner for demanding outrageous sum as condition for handing over file on their wrongful termination of no-win no-fee retainer

Ireland v Trilby Misso [2011] QSC 127 is a sorry tale which did not end well for the solicitors who were found to have repudiated their retainer by terminating without good cause, ordered to hand over their file to Mr Ireland’s new solicitors, ordered to pay costs, and referred to the Legal Services Commissioner.  The decision is interesting because it looks at the consequences of terminating a no-win no-fee retainer and also considers the relevance to a civil dispute of the conduct rules governing ownership of files on a change of solicitor. Continue reading “Qld solicitors referred to Legal Services Commissioner for demanding outrageous sum as condition for handing over file on their wrongful termination of no-win no-fee retainer”

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The limits on Kuek v Devflan articulated

The Court of Appeal has had the opportunity promptly to provide a decision illustrating the limits of its previous decision in Kuek v Devflan Pty Ltd [2011] VSCA 25, which I posted about here.  The opportunity arose in Shaw v Yarranova Pty Ltd [2011] VSCA 55, a unanimous decision of Justices of Appeal Redlich and Mandie.  A third party payer was principally responsible for the fees of the victorious litigant.  The vanquished litigant sought to avoid the adverse costs order by invoking the indemnity principle of legal costing by establishing that the victorious litigant had no obligation to pay its lawyers.  The Court of Appeal said that the law presumes that there is an obligation on the client to pay its lawyers even if there is evidence of an obligation on a third party to pay the lawyers as well.  It made clear that it would not sanction fishing expeditions to displace the presumption.  Here, the litigant’s parent company, which was the third party payer, did not have a costs agreement with the lawyers and neither did the litigant.  But unless lawyers agree to do work for a client for free, they are entitled to payment on scale even in the absence of a costs agreement. Continue reading “The limits on Kuek v Devflan articulated”

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Can a solicitor terminate her retainer if client demands putting of hopeless arguments?

An English case has considered when instructions to put hopeless cases, or advance hopeless claims, may justify a solicitor terminating the retainer: Richard Buxton (Solicitors) v Mills-Owens [2010] EWCA Civ 122.  And here’s a useful case note from Barlow Lyde & Gilbert.  Of course this is the position in England; the position in Australia is not necessarily the same.

The English Court of Appeal also reminded lawyers of their duty to engage in fearless advocacy.  Many barristers get paid handsome sums to speak on their clients’ behalves.  Sometimes it is quite frankly embarrassing arguing points which you do not agree with, and which may not be very good.  Nevertheless, if they are arguable, it’s part of the job, and such arguments must be advanced with as much persuasive conviction as can be mustered.  There is a species of lawyer, a small majority of the general corpus, who expresses embarrassment about their client’s behaviour or contentions behind their back, lawyer to lawyer, wink wink, nudge nudge.  I am speaking of speech which goes beyond making proper concessions.  I regard such conduct with contempt.  The same behaviour may be seen in Court, a little more veiled; Lord Justice Dyson, with whom the other judges agreed, said: Continue reading “Can a solicitor terminate her retainer if client demands putting of hopeless arguments?”

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Solicitors’ retainers have implied term of efficiency

In Michaels v Daley [2010] VCAT 1205, Senior Member Howell advised that:

’12    It usually is an implied term of the engagement of a legal practitioner, at hourly rates, that the work will be performed efficiently. It is an implied term of the kind that “goes without saying”, to adopt the phrase used by the Privy Council in B.P. Refinery (Westernport) Pty Ltd v Shire of Hastings (1978) 52 ALJR 20 @ 26. It goes without saying that a client does not agree to a practitioner acting inefficiently, by spending an excessive amount of time performing legal work, only to be rewarded for every hour of inefficiency.’

Who knew?  Breach of the implied duty no doubt carries an entitlement to damages, and every suit for fees can be turned into a taxation, so long as ‘efficiently’ means the same as the concept of ‘necessary or proper’ in the law of taxation.

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Reminder: you need very clear instructions before commencing proceedings on a person’s behalf

Updated, 23 June 2015: See Doulman v ACT Electronic Solutions Pty Limited (No 2) [2015] FCCA 1664

Updated, 16 July 2014: Brereton J summarised the authorities on this question in In the matter of HIH Insurance Limited (in liquidation); Smith v McGrath [2014] NSWSC 922 at [17], as follows:

‘Fundamentally, the extent of a lawyer’s authority depends on the construction of the retainer, in which terms can be implied as well as express [Hawkins Hill Gold Mining Co v Briscoe]. However, generally speaking, clear and specific words are required to authorise the institution of court proceedings Atkinson v Abbott; Wray v Kemp; Hawkins Hill Gold Mining Co v Briscoe]. This is because of the serious consequences, including in particular exposure to the possibility of adverse costs orders [City of Glenorchy v Addison]; and also because a solicitor ought not readily be implied to be authorised to decide whether or not to institute proceedings [Hawkins Hill Gold Mining Co v Briscoe; Atkinson v Abbott]. Where words to the effect of authorising “such further steps as may be necessary” follow the main object of the retainer, those words are not sufficient to authorise institution of proceedings where the specific words would not do so, the general words being restricted to what is necessary for the proper performance of the particular acts [Kemp v Wray; Knox Street Apartments v Flexman]. While authority to institute proceedings once given extends to final judgment and execution, it does not authorise institution of an appeal without further express instructions [James v Ricknell; In re Joseph Woolf; City of Glenorchy v Addison].’

Original post: Bray v Dye (No 2) [2010] VSC 152, a decision of Justice Judd, is a salutary reminder of the importance of solicitors getting very clear instructions from anyone on whose behalf they intend to commence or defend legal proceedings, and checking that they have capacity to engage in litigation (i.e. that they are of sound mind, and are not minors). In relation to this fundamental instruction in a retainer, it is more dangerous to rely on instructions through agents than it is to take instructions from agents in relation to steps in the litigation.  Get it wrong, and the lawyer will be ordered personally to pay adverse costs ordered against the phantom litigant, once the truth is ascertained, generally following an attempt at execution. That is what happened in this case: the solicitor and the barrister were substituted for the person on whose behalf they instituted proceedings, unbeknown to her, which failed and resulted in adverse costs orders.  According to the lawyers’ version of events, they did so on the basis of the second plaintiff’s oral instructions that he was authorised by the first plaintiff to instruct them to commence proceedings. Continue reading “Reminder: you need very clear instructions before commencing proceedings on a person’s behalf”

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Solicitor’s equitable charge to secure fees declared void

The plaintiff in Brott v Shtrambrandt [2009] VSC 467 is not having much luck.  First of all, he cut what he thought was a plea bargain in a professional misconduct prosecution only to have VCAT’s Legal Practice List increase by 50% the penalty he and the Law Insitute had agreed jointly to contend was appropriate, so that his practising certificate was cancelled and he was prohibited from applying for a new one for 9 months: Law Institute of Victoria v Brott [2008] VCAT 1998.  But the extra penalty all became a bit academic when he was prohibited from applying for a new practising certificate until 2014 in a professional misconduct prosecution he contested and lost disastrously (Legal Services Commissioner v Brott [2008] VCAT 2399, and then lost on appeal ([2009] VSCA 55), paying the Commissioner’s costs all the way and suffering withering criticism.  Then, in a suit by the solicitor for fees charged back in the day when he was allowed to charge them, Justice Beach has inconveniently declared that what sounded like a pretty kick-arse charge fell foul of the Consumer Credit Code and was void.  Section 40 of the Code voids any mortgages (including equitable charges) governed by the Code which do not describe or identify the charged property.  ‘[A]ll estates or interests in real estate which I now have or may hereafter acquire’ did not cut the mustard as a description.

Not all costs agreements will be credit contracts governed by the Code.  I bet there are a lot of solicitors out there with void equitable charges, however.  They will need to proceed with great care in fixing the problem.  Unless they procure the amelioration of the position with retrospective effect with the utmost probity, the ‘fix’ may in fact be challenged in the various jurisdictions which give expression to the law’s tenderness towards clients in their dealings with solicitors.  It would be sensible to obtain advice if the amount secured by the questionable charge is of sufficient significance to them. Continue reading “Solicitor’s equitable charge to secure fees declared void”

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The consequences of substituting lawyers responsible for client matters

My experience of working in and representing big firms is that they consider they have an entitlement to swap lawyers in and out of files, even if that involves the loss of accumulated knowledge and a need to spend time on (and therefore charge fees for) the newbie coming up to speed.  One of the things solicitors whose retainers are governed by the Legal Practice Act, 1996 are required to disclose before, or as soon as reasonably practicable after, being retained, is the name of the person who will be principally responsible for the matter (s. 86(3)(a)).  Under the Legal Profession Act, 2004 there is no such requirement, but I often see disclosures and costs agreements which specify who is going to work on a matter, and at what rate.  In Fitzroy Robinson Ltd v Mentmore Towers Ltd [2009] EWHC 1552 (TCC), the Queen’s Bench Division of the English High Court considered an alleged breach of a promise in a professional services contract that a certain person would work on an engagement. I will link to CMS Cameron McKenna’s excellent Law Now service’s helpful case note rather than reinventing the wheel.

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Another case about one of Schapelle Corby’s lawyers

I have previously expressed my disquiet about the Western Australian QC who told the Australian media that Schapelle Corby’s lawyers were trying to bribe the judges hearing her case.  It seems the Bureau de Spanque de l’Australie de l’Ouest had in fact got right onto it, initiating an own motion investigation. The resultant prosecution has only just now, almost four years later, ground to a successful halt, with a 60,000 word decision crafted by WA’s State Administrative Tribunal over the six months during which the decision was reserved.  The case is Legal Practitioners Complaints Committee v Mark T QC [2009] WASAT 42. The QC does not come out of it well. Continue reading “Another case about one of Schapelle Corby’s lawyers”

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The preconditions to a confidentiality obligation by a barrister

In Legal Practitioners Complaints Committee v Mark T QC [2009] WASAT 42 the prosecutor, the Committee, framed its case on the existence of a retainer, or on a prospective retainer.  The Tribunal did not allow it to morph into an allegation of breach of an equitable duty of confidence.  So the question arose as to what, exactly, a ‘retainer’ is, in the context of a barrister and a client, especially as in this case where there was no solicitor briefing the barrister, and there was no expectation of a fee. The Tribunal held that it was not a contractual relationship which was the touchstone for the creation of confidentiality obligations, but rather

‘the inquiry is whether the relationship of barrister and client is established in the circumstances. That may depend on the purpose of the inquiry. In our view, in the present context, so much might readily be accepted where a barrister acting in the course of the barrister’s professional duties meets with and provides or offers to provide legal advice or assistance to a lay person (or other lawyer on behalf of the lay client) who seeks that advice or assistance. In those circumstances, and whether or not the barrister offers ongoing services, the barrister is retained by the client.’

The whole of the exposition of the law in this regard was: Continue reading “The preconditions to a confidentiality obligation by a barrister”

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More on the solicitor’s ‘penumbral’ duty of care (or lack of it)

Ever since Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1, the solicitor’s penumbral duty of care, orthodoxy since Hawkins v Clayton (1988) 164 CLR 539, has been looking shaky. The reference to the penumbral duty of care is a reference to the proposition that lawyers may owe duties in tort to take care to avoid foreseeable loss accruing to their clients, even if their retainer (i.e. their contractual obligations to the client) does not require them to do so. The classic example is the solicitor retained to document a transaction which to the solicitor seems improvident.  Can the solicitor document the transaction and stay mum about his concerns?  More to the point, can the stupid solicitor who does not notice what a competent solicitor would notice — that the transaction is manifestly improvident, get away with it by saying ‘Not my problem. Go sue someone you asked to advise on whether you struck a good deal or not.’? The whole question got a thorough going over in Kowalczuk v Accom Finance [2008] NSWCA 343. The decision of Justice of Appeal Campbell, with which Justices of Appeal Hodgson and McColl agreed, said: Continue reading “More on the solicitor’s ‘penumbral’ duty of care (or lack of it)”