Council of the Law Society of the Act v Legal Practitioner M1
[2015] ACAT 78
•23 November 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER M1 (Mona Moutrage) (Occupational Discipline) [2015] ACAT 78
OR 14/10
Catchwords: OCCUPATIONAL DISCIPLINE – legal practitioner – unsatisfactory professional conduct – costs disclosure statement and costs agreement – agreement for fixed costs – failure to calculate the fees payable by the Client in accordance with the agreement between the parties –failure to inform the client of right to apply to the Supreme Court for assessment of costs at the practitioners expense – whether the practitioner treated the client fairly and in good faith – failure of practitioner to be frank and open with the Law Society
Legislation cited: Legal Profession Act 2006 ss 269, 271, 277, 291, 302, 386, 387, 419, 425
Legal Profession (Solicitors) Rules 2007 r 1.1, 39.1
Cases cited: Briginshaw v Briginshaw (1938) 60 CLR 336
CGU Insurance Limited v AMP Financial Planning Ltd [2007] HCA 36
Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service Pty Ltd [2010] NSWCA 268
List of
Texts/Papers cited:
Tribunal: Mr C. Chenoweth – Senior Member
Ms J. Lennard – Senior Member
Mr G. Wright – Member
Date of Orders: 23 November 2015
Date of Reasons for Decision: 23 November 2015ACT CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 14/10
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT
Applicant
AND:
LEGAL PRACTITIONER M1
Respondent
TRIBUNAL: Mr C. Chenoweth – Senior Member
Ms J. Lennard – Senior Member
Mr G. Wright – Member
DATE: 23 November 2015
ORDER
The Tribunal finds that:
the respondent’s conduct has fallen short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner and her conduct constitutes unsatisfactory professional conduct; and
this is an appropriate case for submissions in relation to penalty, a compensation order, and costs.
The Tribunal orders that:
1. The application is to be listed for hearing of further submissions from the parties on a date to be advised.
………………………………..
Mr C Chenoweth – Senior Member
For and on behalf of the Tribunal
REASONS FOR DECISION
1. This is an application by the Law Society of the Australian Capital Territory under section 419 of the Legal Profession Act 2006 (LPA).
2. The legal practitioner who is the respondent in this matter practices as the principal of the firm of lawyers in Canberra. She is referred to in these reasons as “the Practitioner”. The applicant is the professional body charged with responsibility under the LPA for the institution of proceedings against practitioners who hold a practising certificate issued by the applicant. The applicant is referred to as “the Society” in these reasons.
3. These proceedings arose out of a matter in which the Practitioner acted for a man who was seeking advice concerning his matrimonial difficulties and distrusted his prospects of resolving those personally. The man is referred to as “the Client” in these reasons for decision. The focus of the complaint is the manner in which the Client was advised about fees for the Practitioner’s services, the manner in which she dealt with certain proceeds received as part of the sale of the property conducted as part of the matrimonial proceedings and the way in which she dealt with the Society once the initial complaint has been made by the Client.
4. The Society contends that the conduct of the Practitioner constitutes unsatisfactory professional conduct or professional misconduct justifying orders pursuant to section 425 of the LPA. The Society applied to the tribunal for orders as follows:
(a) a finding that the respondent has been guilty of professional misconduct;
(b) alternatively, a finding that the respondent has been guilty of unsatisfactory professional conduct;
(c) orders pursuant to section 425(3) of the LPA; and
(d) an order that the respondent pay the applicant’s costs on the Supreme Court scale on a party/party basis.
5. Section 386 of the LPA defines ‘unsatisfactory professional conduct’. It is set out in annexure A to these reasons. Section 387 of the LPA defines ‘professional misconduct’. It is set out in annexure B to these reasons.
Grounds of complaint
6. The first ground of complaint was that the Practitioner had failed to disclose to the Client in writing, before or at the time after she was retained in the matter, details of her legal costs and the matters specified in section 269(1) and 271(1) of the LPA. These sections are set out in annexure C to these reasons.
7. The second ground of complaint was that the Practitioner failed to notify the Client of his rights to have costs assessed or to have the costs agreement set aside at the time that the tax invoice was rendered to him on 28 October 2011, as required by section 291 of the LPA. This is set out in annexure D to these reasons.
8. The third ground of complaint was that the Practitioner had failed to treat the Client fairly and in good faith by charging legal fees on a different basis to that which had been agreed, and further that the Practitioner failed to notify the Client of his rights to apply to the Supreme Court for an assessment of legal costs and as a result he would not be obliged to pay those costs until they had been assessed, or the costs set aside. If the Client made such an application, the law firm could not recover those costs until they were assessed.
9. The particulars further complained that the Practitioner had informed the Client that he could have the costs assessed at his own expense. Section 302 of the LPA states that the law practice would be responsible for costs if they are reduced by 15% or more or if the court is satisfied that the law practice failed in its obligation to disclose under division 3.2.3. Thus the Practitioner was in breach of her obligation to treat the Client fairly and in good faith. This allegation arose from rule 1.1 of the Legal Profession (Solicitors) Rules 2007 (the rules). Annexure E to these reasons sets out rule 1.1.
10. The fourth ground of complaint was that the Practitioner had not been open and frank in her dealings with the Society as to the existence or otherwise of a costs disclosure notice or costs agreement and the alleged sighting of such notice or agreement by the Client, in breach of rule 39.1. Annexure F to these reasons sets out rule 39.1.
The evidence before the tribunal
11. Prior to the hearing a substantial amount of documentary evidence had been filed with the Tribunal in affidavit form. This was as follows:
(a) an affidavit of Michael James Phelps dated 28 May 2014;
(b) an affidavit of Robert Anthony Reis dated 29 May 2014;
(c) an affidavit of the Client dated 3 June 2014;
(d) an affidavit of the Client dated 9 July 2014;
(e) a supplementary affidavit of Robert Anthony Reis dated 10 July 2014; and
(f) an affidavit of the Practitioner dated 2 July 2014.
12. In addition to these affidavits and the oral evidence given at the hearing, there were a number of exhibits tendered. At the conclusion of the hearing, written submissions were filed on behalf of the Society and the Practitioner.
Background - Summary
13. Prior to October 2010, the marriage of the Client and his wife had broken down. They were in negotiation to divide the matrimonial assets. Legal Aid ACT was acting for the wife. The Client was representing himself. He considered that his wife’s solicitors were being unreasonable, and that he needed expert assistance to resolve the matter.
14. The Client approached the Practitioner’s firm seeking advice about the proceedings, and the resolution of the matrimonial property. It was alleged that there were some preliminary meetings between the Client and the Practitioner, the dates of which were not agreed. Ultimately in May 2011, the Practitioner was instructed by the Client to act on his behalf.
15. The Practitioner stated that she first met the Client on 26 October 2010. He was seeking advice in relation to his family law matters. There was an hour-long conference on that day, and general advice was provided. At that meeting, the Client was advised that the firm charged $320 per hour plus GST for its services. The Client was not billed for the appointment. The Client does not agree that he met the Practitioner in October 2010, and states that his first meeting with the Practitioner was in February 2011.
16. It is agreed that the Practitioner met with the Client on 10 May 2011 and the Practitioner’s firm was engaged to act. There then followed a number of negotiations between the Practitioner’s firm and the solicitors for the wife. A conciliation conference was held, which was not successful. The conference was adjourned and a further conference was held. Resolution was not achieved at that conference. Further negotiations resulted in consent orders being subsequently reached between the parties, and those orders were handed up for the making of formal orders.
17. Those orders included the obligation to pay part of the proceeds of the sale of a property forming part of the matrimonial property and held in the Practitioners trust bank account to the Client’s bank account. The Practitioner drew a trust account cheque after agreed minutes of a consent order had been handed to the Registrar of the Family Court. The trust cheque was given to the Client. The next day, the Client terminated the retainer with the Practitioner’s firm. Shortly afterwards, the Practitioner stopped the trust account cheque. The reasons for this are in dispute. (A trust cheque was also drawn, payable to a firm of accountants. This was in accordance with the consent orders handed up. This cheque was not stopped by the Practitioner.)
18. Ultimately, the Client agreed that the Practitioner could retain part of the proceeds of the sale of the property included within the court order and which had been sent to him by the cancelled trust account cheque, by way of payment of her fees. The Client sought an itemised accounting of the bill, which was not provided. The Client made a complaint to the Society. The Society corresponded with the Practitioner. The Society's last complaint involves an alleged failure to provide to the Society the costs agreement which the Practitioner said had been shown to the Client.
19. Both in the affidavit material and in the evidence given at the hearing there was substantial disagreement between the Client and the Practitioner as to what meetings had been held leading to the engagement and when they were, and what discussions that had been held between them about the question of costs.
20. The Client’s affidavit evidence was that the meeting to engage the Practitioner took place in February 2011. He could not recall and did not agree that there had been a meeting in October 2010. At that February meeting, he explained to the Practitioner that he needed to represent himself in the initial stages relating to exchanging financial documents but that he would need help with the negotiation and finalisation stage. He enquired what that service would cost. The affidavit stated that the Practitioner had told him that the costs would be “around $5,000 if the matter does not proceed to a hearing. If it does go to hearing it will be around $20,000.”
21. The Client stated that at no stage in his initial meeting or any subsequent meetings did the Practitioner show him any documents in relation to her fees or any other costs disclosure documents, and that the first time he saw those documents was when they were provided to him by the solicitor for the Society.
22. The Client instructed the Practitioner in May 2011 to negotiate on his behalf and if possible to reach a negotiated solution. The matter proceeded through to conciliation conferences and further negotiation, ultimately leading to consent orders made by the Federal Magistrates Court on 24 October 2011.
23. The Practitioner held in her trust account the proceeds of the sale of the property which were the subject of the court orders. On 25 October 2011, and in accordance with the draft court orders that had been handed to the Registrar the previous day, the Practitioner gave to the Client a trust account cheque for $84,187.88, payable to the Client’s loan account. The Practitioner also sent a trust account cheque for part of the sale proceeds to certain accountants, again in accordance with the court order.
24. On 26 October 2011, there was a discussion between the Client and the Practitioner in which the Practitioner advised the Client that her costs already exceeded $10,000. The following day, the Client sent an e-mail to the Practitioner terminating her services. The Client subsequently discovered that the trust account cheque which he had banked into his account had been cancelled by order of the Practitioner.
25. Several days later, the Client received an invoice from the Practitioner dated 28 October 2011 in the sum of $13,560.80, although offering to reduce the fees to $11,220 if paid within seven days. The Client was upset as this sum was more than double the estimate that he considered he had originally been quoted by the Practitioner in February 2011. The Client denied that he had received any notification of client’s rights with this account.
26. On 2 November 2011 the Client sent an e-mail offering to pay $6,500 by way of costs and requesting an itemised account. The following day the Client became aware of that the trust cheque had not cleared into his account and enquired from the Practitioner’s firm about the reason for this. In his affidavit, the Client said that he spoke to a staff member, whose name he could not recall at the time of making his affidavit, who had told him that the Practitioner had cancelled the cheque because she was concerned that the Client would not pay the fees.
27. The Client then subsequently sent a letter to the Practitioner consenting to her deducting $11,220 from the sale proceeds of the property in payment of her account of 28 October 2011. The Client’s reason for this was given as his concern that he was continuing to incur interest on his bank loan and that he felt he had no other option but to agree. He intended to dispute the invoice and the authority to deduct the fees was not intended to be an acceptance of the invoice in its entirety.
28. Subsequently, the Client forwarded a letter to the Practitioner requesting a refund. The letter also offered to increase his payment from $5,000 to $6,500. If the refund had been given, it would have reduced the Client’s fees to $6,500. This proposal was rejected by the Practitioner. The Client subsequently complained to the Society.
29. In response to the Practitioner’s affidavit, the Client denied meeting with the Practitioner in October 2010. He stated that a meeting that was held in February 2011 which was the only meeting in which the Practitioner’s fees were discussed. He denied that the Practitioner’s fees were discussed in May 2011. He denied that he had been advised that the Practitioner would charge at the rate of $320 per hour plus GST after the first conciliation conference. He denied that he was shown a standard disclosure statement, or any document on the desk, when he was first talking with the Practitioner about costs and fees. He denied any verbal or written communication referring to that document. He also denied a number of statements in the Practitioner’s affidavit concerning meetings and discussions, particularly those said to have taken place after the first conciliation conference when the Practitioner had said that she told the Client that she was now charging at an hourly rate.
30. In her affidavit, the Practitioner maintained that she first saw the Client on 26 October 2010. She gave him some general advice about his family law matter and quoted her professional charges as $320 an hour plus GST. The Client was not billed for that appointment.
31. The Practitioner states that she met the Client for a second time on 10 May 2011 to give further advice. At that meeting she also discussed the firm’s professional fees. Her outline of the discussion indicated that she would normally charge $6,500 plus GST plus disbursements to take the matter to conciliation, but the Client requested a set figure of $5,000 because of his lack of resources. The Practitioner said that her response had been that she would act up until a conciliation conference for the figure of $5,000 plus GST but if it did not settle at that point then there would be an hourly rate of $320 plus GST plus disbursements. They discussed what disbursements were likely.
32. The Practitioner stated in her affidavit that during the conversation she had on her desk a copy of her standard costs disclosure statement to which a copy of the standard costs agreement was attached. Apart from writing the name of the Client at the top of the document, there was no inclusion of any figure for the hourly rate, or for the agreed costs figure of $5,000. The Practitioner says that she placed the statement and agreement in front of the Client and talked it through with him, summarising the points including the right to negotiate costs, the right to ask for a bill and the right to ask for an account to be broken down. The Practitioner maintains that the Client then said words to the effect “I will think about it and let you know.” The Practitioner asserts that she told the Client that she would accept $5,000 plus GST plus disbursements by way of payment to take the matter to the conciliation conference on the basis that the matter settled at the conference. When the Client left, he did not take the document with him. The Practitioner did not subsequently send him a copy or write to him setting out the basis of her costs.
33. Subsequently, on 16 May 2011 the Client contacted the firm and provided copies of documents and correspondence filed and exchanged with his wife’s solicitors and instructed the firm to proceed to act on his behalf.
34. The first conciliation conference was held on 29 July 2011, before Registrar Parker. The matter was not settled, and the conference was adjourned to 18 August 2011.
35. The Practitioner asserts that following the conference on 29 July, the Client said words to the effect of “I suppose it's going to start costing me” and the Practitioner replied that her costs would be $320 per hour plus GST. The Practitioner took it that the Client agreed with the fee arrangement. The Practitioner intended that the hourly rate would only apply to further work carried out by the firm from that date. The Client sent several e-mails to the Practitioner after this date, indicating that he was concerned about his legal costs.
36. The adjourned conciliation conference was further adjourned and held on the 8 September 2011. The parties were unable to reach final agreement on that day, but after subsequent negotiations with Legal Aid, a consent order was signed by both parties and handed to Registrar Parker on 24 October 2011, when the matter was before the court for directions. The Registrar did not make the orders at that time but retained the signed minutes of orders and indicated that she would arrange for the orders to be made. The Practitioner took it that this was because the orders would have to go to a federal magistrate for signing. The Practitioner does not assert that Registrar Parker expressed any concern about the terms of the orders.
37. The Practitioner’s firm had acted on the sale of the matrimonial property at Franklin. The proceeds of sale were the subject of the court orders. She had the proceeds of sale in her trust account.
38. On 25 October 2011 the Practitioner drew a cheque on her trust account to the Client for the amount required by the consent orders to be paid to the Client’s bank account. The Client collected the cheque on 26 October 2011. The Practitioner also drew a trust account cheque and sent it off to the accountants, whose fees were also required to be paid by the consent orders. This cheque was not cancelled at the time that the cheque in favour of the Practitioner was cancelled.
39. The following day, the sealed consent orders had still not arrived at the Practitioner's office, and the Practitioner became concerned that the court may have requisitioned the orders. The Practitioner was ‘particularly concerned’ because the orders had not been formally made by the Registrar on 24 October 2011.
40. The Client wrote to the Practitioner on 26 October 2011, stating that he wished to discontinue the use of the firm’s services and expressing concern about the costs involved. In this letter he referred to:
Estimated price for representation in this matter was $5,000. I thought that the final sum could be slightly up or down of that amount. I expected that you would let me know if the case was costing you more than the originally agreed amount, so that we could make appropriate decisions. Slightly higher figure would not be an issue but double that unfortunately is. I will leave further discussion on that for a later time. As agreed, I can pay you only after this matter is finalized.
41. On 27 October 2011 the Practitioner directed her bookkeeper to cancel the trust cheque that had been given to the Client, she says as a precaution in case the Court had requisitioned the orders. She intended to contact the Client that day, but did not do so. When she returned to her office on the same date, she received an e-mail from the Client indicating that he did not wish her to act any further.
42. On the following day, 28 October 2011, the firm rendered an account to the Client of $13,560.80, rendered on the basis of an hourly rate of $320 per hour plus GST. The account had no reference to the $5,000 figure. The letter also indicated that the firm would accept $11,220 in settlement if the amount was paid within seven days.
43. On 2 November, the Client wrote to the Practitioner objecting to the invoice and reasserting that there had been a figure of $5,000 agreed, to be paid after the settlement of the case. There had been no agreement to pay more than $5,000. The letter also protested that the Client had not been informed until a telephone call from the Practitioner on 26 October 2011 that the cost of the services now exceeded $10,000. It was this telephone call that caused the Client to cancel the retainer.
44. The Client also sought justification for the account, including details of the activities undertaken. He did indicate a preparedness to pay an additional $1,500 if the matter was settled on the basis that they did not proceed to arbitration.
45. On 3 November, the Client e-mailed the Practitioner instructing her to keep $11,220 as requested for the costs of the firm’s services. According to a trust ledger statement attached to a letter to the Society, dated 5 March 2012, the Practitioner drew a cheque for the balance of monies held under the court order for payment in favour of the Client’s account on 4 November 2011, and the $11,220 was transferred into the firm’s general account on 30 November 2011. On 30 December 2011, the firm received further correspondence from the Client requesting a refund of $4,720. That refund was not made and there was further correspondence disputing the basis on which Client sought a refund. The Practitioner offered to have her bill taxed on the basis that the Client would pay the costs of taxation.
46. On 23 January 2012 the Client complained to the Society about the conduct of the Practitioner. The Society wrote to the Practitioner on 13 February 2012 and received a detailed response dated 5 March 2012. In it, the Practitioner referred to the figure of $5000 as ‘an indicative estimate’. She referred to this figure as being to ‘take the matter to a conciliation conference’ and referred to the likely cost of a full hearing as being in the order of $20-25,000 plus disbursements plus counsel’s fees. The Practitioner stated in this letter:
[the Client] looked frail and sick and I felt bad for him so I quoted to him a flat fee of $5000 plus GST plus disbursements to attend the Conciliation conference on 29 July 2012 [sic]. I added that but if the matter does not settle at that first conciliation conference then our hourly rate will apply from there onwards.
The Practitioner then commented on the amount of work that she had done and the difficulty and demanding nature of the Client. She referred to the conduct of the Client in the course of the conciliation conferences and subsequent negotiations. Later in that letter she referred to “my estimate of $5000 plus GST plus disbursements ended on the date of the first Conciliation conference. Any further services had to be charged at our hourly rate of $320 plus GST.” Later in that letter she commented:
At no time did (the Client) ask for an account nor did he indicate to me that he would not proceed with our services once his costs had reached the magic number of $5000 because after all that flat fee was to cover him to the first Conciliation conference only. At all times he was aware that our services were charged out at $320 an hour and he continued to use our services even after the initial Conciliation conference.
47. The letter from the Client to the Society also referred to the alleged inappropriate exercise of lien and contravention of the court order, by cancelling the trust account cheque for the funds to go into the Client’s loan account. The Practitioner denied that she had terminated the cheque because the Client had terminated the retainer, but said it was because the sealed consent court orders had not arrived and she was concerned that they may be requisitioned before being formally made. She stated that in relation to the cheque to the accountants. “[The cheque] had already been sent out and I chose not to cancel that amount as I was prepared to wear that liability in the event the court rejected the order submitted on 24 October 2011.”
48. In this letter to the Society, the Practitioner asserts that she did not tell the Client to pay her fees or she would not release the money. She simply said that the firm would do no more work. The Practitioner asserts that if she had not stopped the cheque she would have had no authority to draw the cheque. The Client signed the court orders so the process of money transfer could not have been decided without his authority.
49. In accordance with the usual practice, the Practitioner's letter to the Society was sent to the Client, who, in his response, commented in detail on it and disputed the Practitioner’s comment about the amount of work that the $5000 was meant to cover. The Client asserted that the agreement had been that the Practitioner would take the case up to the point of a hearing and disputes that the conciliation conference was a reference point in the issue of costs. The Client asserted that if (as the Practitioner asserts), the $5000 was only to take the matter to the first conciliation conference then there was no reference to that in their agreement, nor to any prospect that the conference might be adjourned and there would be a second conference. He also states that he does “not remember any mention of GST and expenses in the context of the cost”.
50. In this letter, the Client asserts that he received information from the firm that the trust cheque was cancelled to enforce payment of the costs. (The Client did not identify the source of this information to the Society but revealed the identity of the informant at the hearing).
51. The Practitioner replied in a letter of 10 April 2012. She confirmed that the Client was quoted a flat fee of $5000 plus GST plus disbursements to take the matter to one (Practitioner’s emphasis) conciliation conference and thereafter the fees would be $320 an hour plus GST plus disbursements. The Practitioner asserted that she would be happy to have the bill and the file assessed by a professional costs assessor. She also asserted again that the only reason for cancelling the trust cheque was that she had written the cheque prematurely and had not waited for the sealed court orders to be issued. She stated:
the only blameworthy act on my part was to sign the initial cheque for $84,187.88 without waiting for the sealed Orders from the Court, and I rectified this as soon as I realized that the Court Orders had not arrived in three days and this concerned me as I thought the court had requisitioned the Orders.
52. In a further letter to Society on 12 June 2012, the Practitioner confirmed that she did not enter into a written costs agreement and with the Client, and again asserted that her costs disclosure had been on the basis of a flat fee of $5000 plus GST plus disbursements. The letter of 5 March 2012 made no reference to a costs agreement.
53. The Society responded by letter of 27 June 2012, repeating a request made in a letter dated 21 May 2012, for the Practitioner to provide a copy of the costs disclosure given to the Client and drawing the Practitioner’s attention to the provisions of the LPA Act.
54. On 4 July 2012, the Practitioner replied to the Society. In that letter she stated:
in hindsight, what I should have done after a verbal agreement was reached to attend the conciliation conference, was to have solidified this in a costs agreement as produced by the Law Society in 2007 and handed him the costs disclosure statement I had produced and was on my file attached to my file note of my discussion with the client.
The letter also asserts that the Client was provided with a section 291 notice under cover of a letter dated 30 May 2011. It also asserts that a copy of this notice was also provided to the Client with the actual bill. The letter of 30 May 2011 related to the conveyancing transaction for a property in Franklin. A copy of that letter was provided to the Society, together with a copy of notification of Client’s rights.
55. On the 5 July 2012 The Society responded indicating that the Complaints Committee would consider the matter further and that the Professional Standards Director considered that the Practitioner had not complied with her obligations in relation to disclosure.
56. The matter was the subject of further correspondence and delay, in view of the Society dealing with another matter concerning the Practitioner.
The grounds of complaint
57. The first ground of complaint was that the Practitioner had failed to disclose to the Client in writing before or at the time after she was retained in the matter, details of her legal costs and the matters specified in section 269(1) of the LPA.
Disclosure of costs to clients
58. Section 269 of the LPA provides that a law practice must disclose to a client the basis on which legal costs will be worked out. Section 271 of the LPA provides that such disclosure must be made to the client in writing before, or as soon as practicable after a law practice is retained in the matter.
59. The Client gave evidence that the Practitioner’s fees were discussed with him only once at a meeting in February 2011. The Client gave evidence that he expected that he was to be charged a ‘around $5000’ flat rate fee , but also as an estimate $20,000 for taking his family matter to a hearing. He did not recall mention of a conciliation conference. He said that the figure of $5000 is referred to as ‘an estimate’. The Client maintained that there was no reference to $320 an hour plus GST.
60. The Practitioner gave evidence that she had agreed to undertake the matter to the conciliation conference for a fee of $5000 plus GST plus disbursements. The Practitioner gave further evidence that she had told the Client that should the matter not settle at the conciliation conference, the firm would begin charging an hourly rate of $320 plus GST.
61. The Practitioner gave evidence that she was aware in October 2010 of the legislative requirements for a cost disclosure to be provided to the Client in writing. The Practitioner agreed that it was important to give the information to the Client. The Practitioner gave evidence that, at a meeting in May 2011, she had shown a costs disclosure statement in the standard Law Society form and a costs agreement to the Client. A copy of the cost disclosure statement was in evidence before the Tribunal. The Client’s name had been inserted at the top of the document. The document did not contain any information as to the professional fees to be charged by the Practitioner: the spaces for inclusion of information about hourly rates or flat rate fees had not been completed. In his oral evidence before the Tribunal the Client strenuously denied that he had seen the costs disclosure statement.
62. The Practitioner gave evidence that she had that she had that costs disclosure statement in front of her at the meeting in May 2011 and that she explained the document and the manner of calculating fees to the Client. The Practitioner agreed that the Client had not taken the costs disclosure statement or costs agreement with him at the end of the meeting and that she had taken no steps to send it to him or otherwise provide him with a copy of it.
63. In a letter to the Society dated 12 June 2012, the Practitioner stated “this firm does not generally enter into written costs agreements with clients, as in our view, this does not foster a good relationship”.
64. The difference in the evidence before the Tribunal is not sufficient for the Tribunal to conclude that the Practitioner did, as a matter of fact, at the meeting in May 2011 show to the Client the costs disclosure statement. The evidence before the Tribunal is not sufficient for the Tribunal to conclude that the Practitioner did, as a matter of fact, clearly explain to the Client the basis upon which her fees would be calculated. From the evidence of the Client, however, it was clear that he expected to pay $5000 for work done up until the matter went to hearing. What was meant by ‘a hearing’ and the preliminary work before that do not appear to have been discussed in detail. The Client denies that he had ever been quoted an hourly rate for such work.
65. The detailed provisions of the LPA regarding the advice that a practitioner must give to a client about the costs to be charged reflects both the importance of this matter to both of them, and to the difference in knowledge and ability to control costs in a matter such as acrimonious litigation. The fiduciary relationship between a practitioner and a client means that not only is the practitioner obliged to comply with the LPA, but that the practitioner must be able to carry out the work in accordance with an agreed rate of charging.
66. That agreement may arise from the known pattern of dealing from previous relationships that implies a particular basis of charging, or from an express agreement with the new or established client in relation to a particular matter. However that agreement arises, the provisions of the LPA must be complied with. A failure to comply with these provisions may of itself constitute professional misconduct or unsatisfactory professional conduct under section 277(7) of the LPA.
67. It was put for the Practitioner that the disclosure of costs and clients rights that were said to have been made when instructed on the conveyancing matter should be sufficient compliance in relation to the family law matter. While the conveyance was part of the separation of assets, it is a noncontentious process generally carried out for a fixed fee, and leading to a known and agreed outcome – the sale of the property and division of the net proceeds as agreed or ordered.
68. Litigation, particularly in the family law jurisdiction, is so different in process and so uncertain in its outcome compared with a conveyance that it cannot be fairly regarded as the same ‘matter’ even when linked as part of a final resolution of a couple’s affairs. The Practitioner had opened a separate file, and there is no argument that she failed to provide appropriate notification of the Client’s rights. But there is no suggestion that she linked that disclosure when talking about costs with the Client in the litigation matter.
69. The Practitioner was aware that the Client was (not surprisingly) upset with his wife’s solicitor, that he was not well and that he was very concerned about costs. She acknowledges that she negotiated a fixed fee in the light of these factors. While she referred to the fixed fee applying ‘up to the conciliation conference’ there does not appear to have been thought given by her to the prospect of the conference being adjourned, or for another conference being held before the matter proceeded to court.
70. This case illustrates the confused and regrettable consequences of the Practitioner failing to comply with the provisions of the LPA, consequences which if they were followed would have avoided conflict about what the agreement as to costs was.
71. Both of the Client and the Practitioner gave oral evidence at the hearing and both were intensively cross-examined. The Tribunal is not able to say that one is more credible than the other.
72. The Practitioner’s admitted lack of clarity in documenting the costs arrangement, and the uncertainty about when the arrangement moved from a fixed fee to an hourly rate reflects on her capacity to remember exactly what happened and when.
73. Evidence was given in the form of pages from the office diary that supported the proposition that the Client had come to the office when he said he had not. On the other hand, there were no other documentary records to indicate what might have happened if the client had attended.
74. The Client in his evidence appeared to be attempting to recollect the history as best he could, bearing in mind the stressful nature of the litigation, that he was unwell at the time and that English was not his first language. He acknowledged that he had been prepared to pay a bit more than the quoted figure as a matter of commercial agreement, if negotiated, but this was not to be taken as reducing the commitment to the initial quoted figure.
75. The Tribunal is not able to determine conclusively from the conflict of evidence between the Practitioner and the Client, the manner in which fees were to be calculated for work done subsequent to the conciliation conference and in preparation for a hearing. Had the Practitioner complied with the requirements of the LPA and completed a costs disclosure statement and costs agreement which disclosed an hourly rate or other method of calculating such fees, and provided a copy to the Client, this confusion would not have arisen. While the Client appears to accept that the figure of $5000 up until the conciliation conference (without specifying this to be the first or and adjourned conference) was reasonable, and indeed was prepared to pay a further amounts if this was negotiated between the practitioner and the client, the uncertainty around the whole arrangement must reflect upon the Practitioner, whose obligation it is to make clear the costs arrangement.
76. An incomplete costs disclosure statement, which contains no information as to the basis of the charges or the rate at which work will be charged cannot be said to be a written costs disclosure, as required by section 269 of the LPA.
77. The Tribunal finds that the Practitioner on her own acknowledgement failed to disclose to the Client in writing before or at any time after she was retained in the matter, details of her legal costs and the matters specified in section 269(1) of the LPA. Having considered the definition set out in annexures A and B, the Tribunal is satisfied that this constitutes unsatisfactory professional conduct rather than professional misconduct. It appears to have arisen out of poor record-keeping and file management, together with inadequate client communication, rather than wilful misrepresentation.
78. The second ground of complaint was that the Practitioner failed to notify the Client of his rights to have costs assessed or to have the costs agreement set aside at the time that the tax invoice was rendered to him on 28 October 2011, as required by section 291 of the LPA.
79. Section 291 of the LPA provides that a bill must include or be accompanied by a written statement setting out the avenues that are available to a client if there is a dispute in relation to costs. The purpose of a written statement setting out the avenues available to a client in case of a dispute in relation to costs is to ensure that clients are aware of their rights with respect to the fees charged, including the right to apply to have the cost agreement set aside, the right to have the bill assessed and any time limits that apply to taking action.
80. The cost disclosure statement contains information regarding the client’s rights in the event of a dispute about costs. Section 291 imposes a separate obligation upon a practitioner to advise client of their rights at the time a bill is rendered.
81. On or about 28 October 2011, the Practitioner sent to the Client, a tax invoice for a total amount of $13,560.80. This was attached to a letter dated 28 October 2011 which stated:
We take this opportunity to provide our memorandum of costs and disbursements. The total payable on the tax invoice is $13,560.80; however, if you pay the account within seven days of the date of this letter, will accept the amount of $11,220 in full and final settlement of your account.
82. In a letter dated 29 December 2011, the Client wrote to the Practitioner and requested a refund of $4,720. On 11 January 2012 the Client again wrote to the Practitioner protesting the amount charged and asserting that they had an agreement for the work to be done for total amount of $5000.
83. On 16 January 2012, the Practitioner wrote to the Client and stated, inter alia: “if you dispute our account, we are happy to have the file taxed at your expense.” The Tribunal notes that the Client had paid the account prior to this exchange of letters. It is clear that the reason for the Client consenting to the payment of the bill was the financial pressure that he was under, and in no way can be seen to be concurrence with the amount claimed. Interest was running on the account with the bank, and there were no doubt other financial pressures on the Client as indicated in the evidence as a result of the divorce proceedings.
84. There was no evidence before the Tribunal that the Practitioner had included with her tax invoice a written statement setting out the avenues available to a client in case of a dispute in relation to costs. The Practitioner made submissions to the effect that in relation to the conveyancing matter in which she also acted for the Client, the Practitioner had provided an adequate cost disclosure statement and that that statement included some information about the avenues available to a client if the client should have a dispute as to costs. If that submission is accepted it establishes only that at some time and in relation to a separate matter, the Practitioner had provided to the Client a cost disclosure statement.
85. The submissions of the Practitioner noted that although the Practitioner conceded that there was no mention of the statement of client’s rights on the cover letter that was attached to the bill issued by the firm with respect to the family law matter, it is not clear that no such statement was included. The Practitioner gave evidence that she could not be certain whether or not a statement of client’s rights complying with section 291 of the Act was sent to the Client.
86. Before making an adverse finding on the disciplinary matter, the Tribunal must be satisfied to the degree of comfortable satisfaction, and beyond the mere balance of probabilities. This test arises from the principle set out in the case of Briginshaw v Briginshaw and the cases that have applied it. Having regard to the evidence of the Client on the matter about his receipt of the account for the conveyancing transaction, the failure of the letter sending out the account for the family law transaction to refer to any statement of clients rights and the lack of any evidence from the Practitioner that one was sent, the Tribunal is comfortably satisfied that none was sent. If it had been, it is highly likely that the Client would have taken up those rights, particularly in view of his reaction to the size of the account.
87. The Tribunal finds that the Practitioner has failed to comply with the requirements of section 291 of the LPA. The Tribunal considers that this would constitute unsatisfactory professional conduct, rather than professional misconduct.
88. The third ground of complaint was that the Practitioner had failed to treat the complainant fairly and in good faith. Rule 1.1 of the Legal Profession (Solicitors) Rules 2007 provides that a practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of the dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner. The Society has particularised two aspects of this rule:
a) That the Respondent knowingly or recklessly purported to charge the Client professional fees calculated at an hourly rate when there was an agreement that the work would be done for a fixed fee up to the first conciliation conference and an hourly rate thereafter. It should be noted that this is a concession by the Society that on a proper interpretation of the evidence concerning payment of fees, the fixed fee of $5000 plus GST would apply up to the first conciliation conference. Bearing in mind that a conference could be adjourned and the uncertainty of the arrangements as set out by the Practitioner, this concession operates in favour of the Practitioner.
b) The second aspect is that the Respondent failed to inform the Client of his right to apply to the Supreme Court for an assessment of legal costs and as a result he was not obliged to pay those costs until they had been assessed. The particulars further complained that the Respondent had informed the Client that he could have the costs assessed at his own expense.
89. The Society contends that the breach of the rule arises from the fact that the Practitioner and the Client had come to an agreement to have the fees calculated in one manner, but the work done was billed in a different manner.
90. It is noted that the tax invoice is not itemised but that it appears to charge the Client for 39.7 hours, at $320 an hour plus GST plus disbursements. The Practitioner in her evidence contended that she had greatly discounted her fees. However, there is no allegation of overcharging and it is the manner of calculating the fees rather than the amount charged that is the basis of this ground of complaint. As the Society made clear in its submissions, the question of whether the fixed fee was a reasonable return for the work done is irrelevant. If a fee was fixed, up to a particular point, then the Practitioner takes the risk on whether she can undertake the work properly within that fixed sum. It was for this reason that the offered tender of evidence from a costing consultant, to attempt to demonstrate that the total account for the work done was reasonable, was not relevant to the proceedings.
91. If the Tribunal accepts the Practitioner’s evidence that the agreement was that the Client would be charged a flat fee of $5000 plus GST up to the first conciliation conference and an hourly rate of $320 plus GST plus disbursements thereafter, then the tax invoice rendered on 28 October 2011 does not reflect that agreement. The Tribunal accepts the submissions of the Practitioner that she undertook considerable additional work for which she did not charge. Further the Tribunal accepts the submissions of the Practitioner that had the bill been calculated according to the agreed formula then the total amount would reflect that the Practitioner had undertaken 10.9 hours of work, subsequent to the conciliation conference. If the Client was charged $5000.00 to the conciliation conference and $320 per hour plus GST plus disbursements then the total account would be $9556.80, which is less than the $11.220 the Client agreed to the Practitioner deducting from her trust account after the proceeds of the revoked cheque had been credited back to that account.
92. Section 302 of the LPA provides that, unless the Supreme Court orders otherwise, the law practice, to which the costs are payable, or were paid must pay the cost of the costs of the cost assessment if the court is satisfied that the law practice failed to provide a costs disclosure statement and costs agreement to the client. The Practitioner, in a letter dated 16 January 2012 stated: “if you dispute our account, we are happy to have the file taxed, at your expense”. In cross examination the Practitioner stated in relation to the file being taxed at the Client’s expense that “at your expense is being a little bit exaggerating there, but I was happy to have the file taxed at any point in time”. This was a misrepresentation on a significant point to a vulnerable client, in circumstances where the revocation of the cheque would have left him totally confused. The Tribunal notes that there is no suggestion that the Practitioner communicated with the client to explain why she had taken the grave step of revoking a trust account cheque.
93. The letter of 16 January 2012 conveys to the Client in clear terms that if he wishes to dispute the amount being charged, the file may be taxed but that will be at his expense. In the circumstances of this case, Section 302 of the LPA would require the Practitioner to pay the costs of the assessment, since she failed to comply with the obligation to provide a costs disclosure statement.
94. The Law Society asserts that the failure to calculate the fees payable by the Client in accordance with the agreement between the parties and the failure to inform the Client of his right to apply to the Supreme Court for assessment of costs, but not at his expense constitute a breach of rule 1.1, because the Practitioner has failed to treat her Client fairly and in good faith.
95. A duty to act in good faith includes a duty to act reasonably and with fair dealing, having regard to the interests of the parties. The concept of good faith combines a number of concepts: fairness, fair dealing, ethical behaviour, loyalty, decency and honesty. Fairness, honesty and reasonableness are well understood concepts in commercial law and good faith is related to them. Rule 1.1 makes reference to the client’s position of dependence upon the practitioner and the high degree of trust which a client is entitled to place in a practitioner. Discharge of the duty of good faith would require something more than passivity and in the circumstances of a solicitor would require affirmative action on the part of the practitioner to act fairly, honestly and reasonably and in the interests of their client.
96. The Practitioner has calculated her fees in a manner that is not consistent with the agreed charging basis. Whether the failure to apply the agreed charging basis was as a result of oversight, or a feeling by the Practitioner that the amount of work that she had undertaken justified ignoring the agreed basis, the effect on the Client was serious. Had the Practitioner kept proper records and a proper costs agreement to which she could have referred, the situation would not have arisen. Further, the misrepresentation about the right to tax the bill and who should pay was a deliberate misrepresentation.
97. The Practitioner has failed to properly convey to the Client rights available to him to dispute the amount charged, and in asserting that any dispute would be at the Client’s expense has misled the Client. The Tribunal finds that the Practitioner has failed to treat her Client fairly and in good faith. The Tribunal considers that this conduct amounts to unsatisfactory professional conduct.
98. The fourth ground of complaint was that the Practitioner had not been open and frank in her dealings with the Society as to the existence or otherwise of a costs disclosure notice or costs agreement and the alleged sighting of such notice or agreement by the Client, in breach of rule 39.1
99. Rule 39.1 states that subject only to his or her duty to the client, a practitioner should be open and frank in his or her dealings with the Law Society.
100. Rule 39.2 states that a practitioner should respond within a reasonable time:
…to any requirement of the Society for comments or information in relation to the practitioner’s conduct or professional behaviour and in doing so, the practitioner should furnish in writing a full and accurate account of his or her conduct in relation to the matter.
101. On 13 February 2012 Mr Robert Reis, Professional Standards Director of the Law Society wrote to the Practitioner. The letter included a copy of the complaint and required the Practitioner to respond to the substance of the complaint and to include a brief history of the matter and other relevant background information and to address the specific complaints. The complaint raised the following grounds: inappropriate exercise of a lien, contravention of court orders and costs.
102. On 5 March 2012 the Practitioner replied to the Society and in relation to each of the grounds of complaint made the following comments:
a) Inappropriate exercise of a lien and contravention of court orders. She had issued to her Client a cheque in the amount of $84,187.88 from her trust account. Then she became concerned that the court orders requiring the payment of this amount had not been properly finalised, and so she instructed her bookkeeper to stop the cheque. It is noted that the Practitioner did not stop the other cheque in payment of an accountant’s bill nor offer an explanation to the Client as to why she had cancelled his cheque but not also cancelled that second cheque;
b) Costs. That her Client knew that her firm’s hourly rate was $320 per hour plus GST plus disbursements. The Practitioner states that she had estimated the costs of $5000 plus GST plus disbursements up to the first conciliation conference and that she had quoted this fixed price to the Client for work done up to and including that conciliation conference and that any work done after that would be on an hourly basis. The Practitioner asserts that she had, in response to a query from the Client explained her fees to the Client “because he asked me how much we charge per hour and I told him it was 320 per hour plus GST plus disbursements;”
c) There are several attachments to the reply by the Practitioner:
i. an email from the Client to the Practitioner dated October 11 2011 attaching a copy of documents;
ii. a letter from the Client to the Practitioner dated 12 September 2011, discussing his family law matter;
iii. a copy of Family Court orders dated 20 April 2011;
iv. a copy of a settlement statement in relation to a conveyance where the Practitioner acted on the sale of the Client’s property;
v. a copy of relevant trust account ledger in relation to the Client’s matter which shows that a cheque had been paid on 25 October 2011, in the matter $5039 to the accountants and that a cheque in the amount of $84,187.88 had been paid on 25 October 2011 to the account of the Client. The ledger also shows that the cheque in the amount of $84,187.88 had been stopped;
vi. a copy of Family Court orders dated 24 October 2011;
vii. a copy of an email dated November 3, 2011 from the Client to the Practitioner attaching a letter authorising her to retain the amount of $11,220 from her trust fund and to transfer the balance to the Client; and
viii. a copy of an email dated 27 October 2011 attaching a letter from the Client to the Practitioner. That letter, inter alia, terminates the retainer.
103. It is noted by the Tribunal that the Practitioner did not state in this reply to the Society that she had provided or shown a cost agreement in writing to the Client. It is also noted that the Practitioner made no reference to any usual practice of providing or not providing a written costs agreement.
104. 19 March 2012 the Society provided to the Practitioner, a copy of the comments made by her Client on her response of 5 March 2012.
105. 10 April 2012 the Practitioner made the following response:
that [the Client] was quoted a flat fee of $5000 plus GST plus disbursements to take the matter to the Conciliation conference and thereafter our fees would be $320 an hour plus GST plus disbursements.
The Practitioner states that she:
is happy to have the file assessed by a professional costs assessor.
The Practitioner re-states that the:
only reason why I cancelled the cheque was that I had written the cheque prematurely. I had not waited for the sealed Court Orders to issue from the Court.
106. It is noted that the Practitioner did not take the opportunity in the second response to provide to the Society any explanation along the lines that she had provided to the Client a copy of a written costs agreement. Nor did she offer any explanation as to why she had cancelled the cheque made out in favour of the Client, but not the cheque made out in favour of the accountant.
107. 21 May 2012 the Society wrote to the Practitioner requesting her to provide copies of the costs agreement or costs disclosure notice.
108. 12 June 2012 the Practitioner wrote to the Society stating that:
This firm does not generally enter into written costs agreements with clients, as in our view, this does not foster a good relationship. However, we now see the merit in having a costs agreement drawn up for each matter exceeding $1500 and we acknowledge that this would be a good habit to adopt.
109. It is noted that the Practitioner stated in her evidence that she had offered her file to the Society. In the letters dated 10 April 2012 and 12 June 2012, the Practitioner offers her file for the purpose of having the costs assessed. It is not a general offer to provide the file to the Society for investigation of the complaint.
110. On 27 June 2012 the Society wrote to the Practitioner again asking for a copy of her costs disclosure notice in the matter relating to the Client. The Law Society letter states:
Given the serious consequences of the failure to provide costs disclosure, and the gravamen of [the Client’s] complaint the Committee requires you to unequivocally advise whether costs disclosure compliant with the Act has been provided to [the Client].
111. 4 July 2012 the Practitioner wrote to the Society and stated:
in hindsight, what I should have done after a verbal agreement was reached to attend the conciliation conference, was to have solidified this in a costs agreement as produced by the law Society in 2007 and handed him the costs disclosure statement had produced and was on my file attached by file note of my discussion with the client.
Attached to this reply was a copy of a letter from the Practitioner to the Client dated 30 May 2011 in relation to the costs of acting for the Client in relation to the sale of his property and a ‘Notification of Client’s Rights’ attached to that letter.
112. It is noted that at this third opportunity the Practitioner does not provide a copy of a written costs agreement and her reference to a costs agreement attached to her file note of her discussion with the Client is less than clear. Given the strong wording of the letter from the Law Society of 27 June 2012, this cannot be regarded as unequivocal advice as to whether a cost disclosure statement was provided in writing to the Client.
113. 5 July 2012 Mr Reis wrote to Practitioner and stated:
In view of your response to my letter dated 27 June 2012 requesting you advise whether cost disclosure complaint (sic) with the Legal Profession Act 2006 was given to [the Client]. I will report to the Complaints Committee that you have not complied with your obligation to provide [the Client] with the requisite disclosure.
114. 25 November 2013 the Practitioner provided to the Society, a copy of the cost disclosure statement costs agreement, which she stated she provided to the Client, but which he left behind, at the initial conference in May 2011. Her letter of 25 November 2013 and the attached agreement is annexure V to her affidavit.
115. In her oral evidence the Practitioner asserts that she offered her entire file to the Society. The letters reveal that this is an offer only to allow the Client to have the matter costed.
116. In her oral evidence the Practitioner states that she provided a copy of the written costs agreement and costs disclosure statement to the Society only after she had received advice from counsel. There is no evidence before the Tribunal which would indicate that she had considered and rejected the notion of providing the costs agreement or cost disclosure statement. Indeed, the letters would indicate that either there was no such written agreement or that the Practitioner had entirely forgotten the existence of such an agreement.
117. In her oral evidence the Practitioner stated that she had shown a copy of a costs disclosure statement to the Client, but he had not taken it with him after their meeting. She gave further gave evidence that she had removed the incomplete document from that Client’s file and was using it as a pro forma to develop a new costs agreement.
118. The Society in its submissions describes the conduct of the Practitioner as a failure to be frank and open and notes that the purpose of the rule is that the practitioner must provide information, whether favourable or not, to the Law Society. The practitioner is given an opportunity to explain any apparent deficiencies in the material provided but the obligation remains to provide such information. The Practitioner was afforded a number of opportunities to produce the document, but did not do so. In her oral evidence the Practitioner asserted that she provided the costs disclosure statement and costs agreement to the Society only after receiving advice from counsel that she should do so. The Practitioner fails to give any explanation as to why she had not provided those documents to the Society on any of the earlier opportunities.
119. In the Respondent’s submissions counsel states:
It is clear that the respondent was mistaken as were obligations of frankness and openness towards the society. However, is also clear that she sought advice as to those obligations and immediately complied with them.
The Practitioner is under a professional obligation to provide a cost disclosure statement and costs agreement in written form to the Client before or soon as practicable after the commencement of the retainer. The complaint by the Client was about the amount and method of charging. If the Practitioner had complied with her obligations with regard to costs disclosure and a costs agreement then it would seem to the Tribunal that the provision of those documents at the earliest opportunity would be a necessary and important part of the duty to be frank and open with the Society.
120. The Tribunal finds that the legal practitioner was not frank and open with the Law Society. The Tribunal considers that this conduct amounts to unsatisfactory professional conduct.
121. Having regard to the decisions of the Tribunal, the Tribunal will reconvene to consider the question of penalties and reimbursement to the Client, together with any other orders that the Tribunal considers appropriate.
………………………………..
Mr C.G Chenoweth, Senior Member
For and on behalf of the Tribunal
ANNEXURE A
386 What is unsatisfactory professional conduct?
In this Act:
unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
Note See also s 389 (Conduct capable of being unsatisfactory professional conduct or professional misconduct).
ANNEXURE B
387 What is professional misconduct?
(1) In this Act:
professional misconduct includes—
(a) unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and
(b) conduct of an Australian legal practitioner whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate.
Note See also s 389.
ANNEXURE C
269 Disclosure of costs to clients
(1) A law practice must disclose to a client in accordance with this division—
(a) the basis on which legal costs will be worked out, including whether a scale of costs applies to any of the legal costs; and
(b) the client’s right to—
(i) negotiate a costs agreement with the law practice; and
(ii) receive a bill from the law practice; and
(iii) request an itemised bill if the client receives a lump sum bill for more than the threshold amount; and
(iv) be notified under section 276 (Ongoing obligation to disclose etc) of any substantial change to the matters disclosed under this section; …
271 How and when must disclosure be made to a client?
(1) Disclosure under section 269 (Disclosure of costs to clients) must be made in writing before, or as soon as practicable after, the law practice is retained in the matter.
ANNEXURE D
291 Notification of client’s rights
(1) A bill must include or be accompanied by a written statement setting out—
(a) the following avenues that are open to the client if there is a dispute in relation to legal costs:
(i) costs assessment under division 3.2.7;
(ii) the setting aside of a costs agreement under section 288 (Setting aside costs agreements); and
(b) any time limits that apply to the taking of any action mentioned in paragraph (a).
Note These matters will already have been disclosed under s 269 (1) (Disclosure of costs to clients).
(2) Subsection (1) does not apply in relation to a sophisticated client.
(3) A law practice may provide the written statement mentioned in subsection (1) in a form approved by the law society council under section 587 and if it does so the practice is taken to have complied with this section in relation to the statement.
ANNEXURE E
RELATIONS WITH CLIENTS
Practitioners should serve their clients competently and diligently. They should be acutely aware of the fiduciary nature of their relationship with their clients, and always deal with their clients fairly, free of the influence of any interest which may conflict with a client's best interests. Practitioners should maintain the confidentiality of their clients' affairs, but give their clients the benefit of all information relevant to their clients' affairs of which they have knowledge. Practitioners should not, in the service of their clients, engage in, or assist, conduct that is calculated to defeat the ends of justice or is otherwise in breach of the law.
1 . Acceptance of Retainer -
(Instructions to Act or Provide a Legal Service)
1.1 A practitioner should treat his or her client fairly and in good faith, giving due regard to the client’s position of dependence upon the practitioner, his or her special training and experience and the high degree of trust which a client is entitled to place in a practitioner.
ANNEXURE F
39 Dealings with the Law Society
39.1 Subject only to his or her duty to the client, a practitioner should be open and frank in his or her dealings with the Law Society.
HEARING DETAILS
FILE NUMBER:
OR 14/10
PARTIES, APPLICANT:
Council of the Law Society of the ACT
PARTIES, RESPONDENT:
Legal Practitioner M1
COUNSEL APPEARING, APPLICANT
Mr G Blank
COUNSEL APPEARING, RESPONDENT
Mr T Crispin
SOLICITORS FOR APPLICANT
Phelps Reid Lawyers
SOLICITORS FOR RESPONDENT
Self Represented
TRIBUNAL MEMBERS:
Mr C Chenoweth – Senior Member, Ms J Lennard – Senior Member, Mr G Wright - Member
DATES OF HEARING:
24 & 25 September 2015
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