Legal Services Commissioner v Rosen
[2015] QCAT 306
•3 August 2015
| CITATION: | Legal Services Commissioner v Rosen [2015] QCAT 306 |
| PARTIES: | Legal Services Commissioner (Applicant/Appellant) |
| v | |
| Warren Lance Rosen (Respondent) |
| APPLICATION NUMBER: | OCR151-13 |
| MATTER TYPE: | Occupational regulation matters |
| HEARING DATE: | 2 July 2015 |
| HEARD AT: | Brisbane |
| DECISION OF: | Justice Carmody Assisted by: Ms Megan Mahon, Legal Panel Member Prof Susan Dann, Lay Panel Member |
| DELIVERED ON: | 3 August 2015 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | THE TRIBUNAL ORDERS THAT: 1. Warren Lance Rosen be publicly reprimanded. 2. Warren Lance Rosen pay a penalty of $1,500.00 within 60 days. 3. Warren Lance Rosen pay the applicant’s costs fixed in the amount of $2,500.00 within 90 days. 4. Unless sufficient evidence of prior service is filed with the Tribunal, the Legal Services Commissioner will serve the Notice of Intention to Seek Compensation Order and any supporting documents on Warren Lance Rosen by: 4:00PM 10 August 2015 5. Warren Lance Rosen will file in the Tribunal four copies and give one copy of any submissions in response to the complainant’s Notice of Intention to Seek Compensation Order by: 4:00PM 17 August 2015. 6. The Tribunal will determine the complainant’s application for compensation on the papers not before 20 August 2015, unless: a) Warren Lance Rosen files and serves an application by 4:00PM, 12 August 2015 seeking orders or directions extending the time required to comply with Order 5; b) the complainant requests an opportunity to file submissions in reply to the Warren Lance Rosen’s response to the complainant’s Notice of Intention to Seek Compensation Order by 4:00PM, 19 August 2015; or c) Warren Lance Rosen or the complainant files and serves an application by 4:00PM, 14 August 2015 seeking orders or directions for an oral hearing in respect of the complainant’s application for compensation. |
| CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – PROFESSIONAL MISCONDUCT AND UNSATISFACTORY PROFESSIONAL CONDUCT – FAMILY LAW – SUCCESSIVE CONFLICT OF INTEREST –– where the respondent was a legal professional practicing in family law – where the respondent was representing the complainant in respect of a property management dispute – where the respondent had formerly represented the complainant’s husband in a previous property management dispute – where the legal representatives of the complainant’s husband filed an application for an injunction restraining the respondent from acting for the complainant on the basis of an apparent successive conflict of interest – where the complainant instructed the respondent to contest the application for an injunction – where the Federal Magistrates Court granted the injunction restraining the respondent from continuing to represent the applicant – where the complainant filed a complaint regarding the conduct of the respondent with the Legal Services Commissioner – where the complainant filed an application with the Queensland Civil and Administrative Tribunal for compensation for legal costs and expenses incurred in prosecuting the property management dispute – whether the conduct of the respondent constituted unsatisfactory professional conduct – whether the complainant should receive compensation for legal costs and expenses incurred in prosecuting the property management dispute. Legal Profession Act 2007 (Qld) ss 418, 420, 452, 462, 464, 465, 466 |
APPEARANCES and REPRESENTATION:
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
This is a discipline application by the Legal Services Commissioner under s 452 of the Legal Profession Act 2007 (Qld) in relation to a complaint made by the complainant, Ms Dawn Holling, against the respondent, Mr Warren Lance Rosen.
The applicant has charged the respondent with unprofessional or professional misconduct by contravening Rule 4 of the Legal Profession (Solicitors) Rule 2007 (Qld) by representing a client against a former client between 14 April 2011 and 24 November 2015.
The respondent resists the application, claiming that:
1.The respondent was not in possession of confidential information of Mr McKee;
2.If the respondent were in possession of confidential information of Mr McKee, he had waived the confidentiality of the relevant information; and
3.If Mr McKee had not waived the confidentiality of the relevant information, the respondent nevertheless had received instructions to contest the application for an interlocutory injunction restraining him from acting for the complainant.
Factual Matrix
The facts giving rise to this application are relatively undisputed.
Between 1 October 2006 and 30 June 2007, the respondent acted for Mr McKee in relation to a property settlement between Mr McKee and his former wife Ms Carolyn McKee.
On 16 April 2011, the respondent accepted instructions from the complainant to represent her in an application for a property settlement against her estranged husband, Mr McKee.
On 19 April 2011, the respondent advised Mr McKee in writing that the respondent was acting against Mr McKee in respect of property settlement proceedings. The respondent informed Mr McKee that the respondent did not believe it was in possession of any information, confidential or otherwise, which Mr McKee would not be required to otherwise disclose in the property settlement proceedings. The respondent advised Mr McKee to seek independent legal advice regarding the property settlement.
On 6 May 2011, the respondent wrote to Mr McKee purportedly confirming that Mr McKee had no objection to the respondent acting for the complainant, that Mr McKee did not intend to obtain independent legal representation, and that Mr McKee wished to negotiate a settlement.
Mr McKee responded by email on 27 May 2011 stating that he intended to negotiate a “civil agreement on values” himself and “finalise the end result” with his own legal representatives. Mr McKee did not make reference to the successive representation in his email correspondence.
On 24 June 2011, the respondent filed an application for property settlement on behalf of the complainant in the Federal Magistrates Court.
On 12 July 2011, Mr McKee retained Holloway Jenkins Lawyers as legal representatives in the property settlement proceedings. On the same day, Holloway Jenkins Lawyers wrote to the respondent, advising that Mr McKee objected to the respondent acting for the complainant as the respondent had previously acted for Mr McKee in a property settlement dispute. Holloway Jenkins Lawyers advised the respondent that Mr McKee had previously supplied the respondent with confidential information and reasonably believed that there was a risk such information may be used to his disadvantage in the property settlement proceedings. Holloway Jenkins Lawyers also advised that if the respondent declined to withdraw from the proceedings they would seek an interlocutory injunction restraining the respondent from acting for the complainant.
On 18 July 2011, the respondent wrote to Mr McKee stating that they had previously advised their client of the successive representation and that Mr McKee was precluded from relying on raising any objection on that basis. Despite further requests from Mr McKee’s solicitors for the respondent to desist from representing the complainant, the respondent nevertheless persisted with acting for the complainant.
On 7 September 2011, Holloway Jenkins Lawyers filed an application in the Federal Magistrates Court seeking an interim order that the respondent and any employee of Rosen Lawyers be restrained from acting for the complainant.
On 8 September 2011, the respondent wrote to the complainant enclosing copies of certain documents and stated that the complainant had two choices: (a) contest the application for an injunction; or (b) terminate her instructions to the respondent. The complainant responded on the same day stating that there was “no way she would stop using Warren to represent” her and that she would “contest [their] application”.
On 13 September 2011, Holloway Jenkins Lawyers wrote to the respondent advising that he had not correctly elucidated the principles governing conflict of interest in family law proceedings and that the respondent should review the applicable principles and case law.
Similar correspondence requesting the respondent to refrain from continuing to represent the complainant was exchanged until, on 23 November 2011, Federal Magistrate Howard issued an injunction restraining the respondent and any employee of Rosen Lawyers from acting for the complainant in the property settlement proceedings, and the complainant from continuing to retain the respondent or his firm. The learned Federal Magistrate ordered $8,000.00 costs, assessed in excess of the standard basis, because Mr McKee had “extremely good prospects of success from the outset [of the application].”
Rule 4 of the Legal Profession (Solicitors) Rule 2007
Rule 4 of the Legal Profession (Solicitors) Rule 2007 (Qld), in force at the time of the alleged unsatisfactory professional conduct or professional misconduct, provides that:
A solicitor must not accept a retainer to act for another person in any matter against, or in opposition to, the interest of a person (‘the former client’):
4.1 for whom the solicitor or the solicitor’s current or former law practice or the former law practice of a partner or employee of the solicitor or of the solicitor’s law practice has acted previously and has thereby acquired information confidential to the former client and material to the matter; and
4.2 if the former client might reasonably conclude that there is a real possibility the information will be used to the former client’s detriment.It is undisputed that the respondent was a solicitor at all material times, and that the respondent accepted a retainer to act for the complainant. Furthermore, the respondent concedes that Mr McKee was his former client in respect of a previous property settlement dispute.
The complainant and Mr McKee, as opposing parties in an adversarial property settlement proceeding arising out of an emotional and acrimonious divorce, clearly possess opposing interests, each seeking a more favourable allocation of resources from a limited estate.
The complainant appears to contend that he was not in possession of confidential information which would not be disclosed in the ordinary course of property settlement proceedings. The finding that the solicitor was in possession of confidential information of Mr McKee acquired in the course of prior representation was an essential precondition to the interlocutory injunction ordered by the learned Federal Magistrate on 20 February 2015. Indeed, the reasons of the learned Magistrate clearly articulate the existence of confidential information relating to the property settlement previously negotiated by the respondent with Mr McKee’s former spouse, and the emotional, psychological and mental qualities of Mr McKee.
Legal practitioners in property settlement proceedings often possess an intimate relationship with their clients. Sensitive information regarding marital transgressions, financial and property arrangements, relational affectivity, custodial preferences, and dispositional qualities are necessarily commuted to the legal practitioner for the exclusive purpose of facilitating the optimal management of the settlement proceedings. If legal practitioners retaining such confidential information were permitted to represent an opposing party in later proceedings in circumstances giving rise to a risk of misuse, the administration of justice would be brought into disrepute and the public would be discouraged from candidly disclosing prejudicial or embarrassing information to their legal practitioners. Any reduction in the quality and quantity of information exchanged between solicitor and client diminishes the standard of legal representation and advice and may unnecessarily prolong legal disputes.
On the evidence presented to the Tribunal, we are satisfied on the balance of probabilities, having regard to the gravity of the allegations made against the respondent, that the respondent possessed confidential information of Mr McKee. Furthermore, the Tribunal is not satisfied that the information, including the material appertaining to Mr McKee’s emotional, psychological or mental qualities, would necessarily be disclosed, or otherwise become available, to the respondent during the property settlement proceedings.
The respondent possesses a duty to act in the best interests of the complainant. This requires the use of not merely the legal skills and resources at the respondent’s disposition, but all knowledge and information which may be in the possession of the respondent. Therefore, the respondent was required, by reason of his fiduciary duties, to utilise the confidential information to promote the interests of the complainant. The respondent was not absolved of this obligation by reason of conflicting duties of confidentiality owed to the complainant.
There is a real possibility – in the sense of being concrete, tangible and not insignificant – that this information may be used to the detriment of Mr McKee. It is well established, by experience and precedent, that a skilled advocate or negotiator may exploit the mental, emotional and psychological attributes of an opposing party to their disadvantage. For this reason, it is untenable to propose that the confidential information possessed by the respondent could not justify a reasonable conclusion that there is a real possibility that the information could be used to Mr McKee’s detriment.
The respondent nonetheless contends that Mr McKee has “waived” his right to either the confidentiality of the information or object to the respondent’s continued representation of the complainant. The respondent appears to rely on the fact that Mr McKee was advised on 19 April 2011 of the confidential information possessed by the respondent, and failed to promptly object until 12 July 2011 to his continued representation of the complainant. Put another way, the less than three month delay is alleged to give rise to an implied waiver of the right to object to the respondent’s representation of the complainant.
Mr McKee was, and is, hardly a well-resourced and advised person. Although Mr McKee has previously been involved in property settlement proceedings, he could not be accurately described as knowledgeable in the law and practice prevailing within this area of law. There is no evidence that Mr McKee adequately appreciated the significance of the respondent possessing confidential information, or that his delay might undermine his right to object to the respondent’s continued representation of the complainant. Immediately on retaining Holloway Jenkins Lawyers, Mr McKee instructed his solicitors to object to the respondent’s continued representation of the complainant. In light of these circumstances, it cannot be concluded that the delay gave rise to a waiver of Mr McKee’s right to object to the respondent acting for the complainant.
Accordingly, the respondent is found guilty of breaching Rule 4 of the Legal Profession (Solicitors) Rule 2007 (Qld).
Professional Misconduct of Unsatisfactory Professional Conduct
Unsatisfactory professional conduct is defined to include:
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 from a reasonably competent Australian legal practitioner.[1]
[1]Legal Profession Act 2007 (Qld) s 418.
Breach of the Legal Profession (Solicitors) Rule 2007 (Qld) may be regarded as unprofessional or professional misconduct.[2]
[2]Legal Profession Act 2007 (Qld) s 420(1)(a).
The conduct of the respondent is not so grave as to require a finding that he is no longer a fit and proper person to practice law. The conduct of the respondent was neither dishonest nor malicious. However, the conduct was unethical and potentially unfair to his former client. Furthermore, representing the complainant against a former client in possession of material confidential information disadvantageous to his former client is liable to bring the legal profession into disrepute. The conduct, therefore, falls short of the standard of care, competence and diligence which a member of the public is entitled to expect from a reasonably competent Australian legal practitioner.
The respondent has submitted, however, that such a finding should not be made because his client gave him instructions to contest the application for an interlocutory injunction. The contention is irrelevant to these proceedings; the gravamen of the charge against the respondent is the existence of the conflict of interest, not the maintenance of spurious legal proceedings.
Nevertheless, the respondent should be reminded of his onerous obligations as a legal professional. A legal practitioner’s first duty is to the Court and the administration of justice. Vested with specialised knowledge and training, it is incumbent on a legal practitioner to exercise their professional judgement and independence to dissuade their client from commencing or defending futile proceedings. In light of the robust and repeated warnings advanced by Holloway Jenkins Lawyers, the respondent should have provided more complete and comprehensive advice to the complainant against resisting the application to avoid the accrual of unnecessary costs. In seeking to retain the complainant as a client in the matter when the respondent was clearly disqualified from representing for the complainant, the respondent has failed in his duty to act in the complainant’s best interests and exercise independent judgment.
Accordingly, the respondent is found to have committed unsatisfactory professional misconduct by breaching Rule 4 of the Legal Profession (Solicitors) Rule 2007 (Qld).
Penalty
The respondent is 67 years of age and has practised law in either New South Wales or Queensland for 45 years. The respondent has no previous adverse disciplinary findings.
The conduct of the respondent was not dishonest or malicious. The respondent is not alleged to have exploited the confidential information to benefit the complainant. The complainant, indeed, has provided a broadly positive review of the quality of legal services delivered by the respondent.
The conduct of the respondent, however, is exacerbated by his failure to adequately respond to the objections and advice supplied by Holloway Jenkins Lawyers. The respondent, as an accredited specialist in family law, should have been aware of the broad approach to conflicts of interest applying in the context of property settlement proceedings. The respondent also demonstrates a gross failure to exercise professional judgment and independence expected of an experienced legal practitioner.
In the context of the onerous economic and practical demands of modern legal practice, solicitors risk being improperly induced into representing clients despite concurrent or successive conflicts of interest. Accordingly, there is a clear public interest in imposing condign penalties to deter other legal practitioners from engaging in similar conduct. Despite this and having regard to the long-standing and unblemished service of the respondent, there is little need for personal deterrence.
On balance, the Tribunal is satisfied that a public reprimand of the respondent and a fine of $1,500.00 represents an appropriate penalty commensurate with the totality of the conduct of the respondent.
Application for Costs
The applicant seeks an order for costs relating to the disciplinary application. The applicant has been successful in prosecuting the respondent for unsatisfactory professional conduct emanating from the respondent’s violation of Rule 4 of the Legal Profession (Solicitors) Rule 2007 (Qld).
No exceptional circumstances exist which justify this Tribunal refusing to order costs in favour of the applicant.[3] Therefore, this Tribunal possesses no discretion to refuse an application for costs.[4]
[3]Legal Profession Act 2007 (Qld) s 462(1).
[4]Ibid.
The applicant has sought a costs order fixed in the amount of $2,500.00 to be paid within one month of the date of the order. The requested amount reasonably reflects the cost and difficulty associated with prosecuting the disciplinary application, particularly having regard to the fact that the applicant appears to have unnecessarily resisted a cogent and well-supported disciplinary application.
Accordingly, the Tribunal allows the application for a costs order fixed in the amount of $2,500.00 to be paid within one month of the date of the order.
Application for Compensation
On 9 August 2013, the complainant filed a Notice of Intention to Seek Compensation Order under s 464 of the Legal Profession Act 2007 (Qld).
A compensation order may only be granted where: (a) the complainant has suffered pecuniary loss as a result of the impugned conduct; and (b) it is in the interests of justice that such an order be made.[5]
[5]Legal Profession Act 2007 (Qld) s 465(1).
There is no evidence before the Tribunal that the respondent was served with the Notice of Intention to Seek Compensation Order.
In the interests of providing procedural fairness to the respondent, the Tribunal should order the Legal Services Commissioner to serve the Notice of Intention to Seek Compensation Order on the respondent, and for the respondent to file submissions in reply to the application. To expeditiously dispose of the application for compensation, the Tribunal proposes to determine the application on the papers not before Thursday, 20 August 2015.
Proposed Orders
The Tribunal orders that:
1. Warren Lance Rosen be publicly reprimanded.
2. Warren Lance Rosen pay a penalty of $1,500.00 within 60 days.
3. Warren Lance Rosen pay the applicant’s costs fixed in the amount of $2,500.00 within 90 days.
4. Unless sufficient evidence of prior service is filed with the Tribunal, the Legal Services Commissioner will serve the Notice of Intention to Seek Compensation Order and any supporting documents on Warren Lance Rosen by:
4:00PM 10 August 2015
5. Warren Lance Rosen will file in the Tribunal four copies and give one copy of any submissions in response to the complainant’s Notice of Intention to Seek Compensation Order by:
4:00PM 17 August 2015.
6. The Tribunal will determine the complainant’s application for compensation on the papers not before 20 August 2015, unless:
a)Warren Lance Rosen files and serves an application by 4:00PM, 12 August 2015 seeking orders or directions extending the time required to comply with Order 5;
b)the complainant requests an opportunity to file submissions in reply to the Warren Lance Rosen’s response to the complainant’s Notice of Intention to Seek Compensation Order by 4:00PM, 19 August 2015; or
c)Warren Lance Rosen or the complainant files and serves an application by 4:00PM, 14 August 2015 seeking orders or directions for an oral hearing in respect of the complainant’s application for compensation.
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