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Where am I now? Lawlink > Office of the Legal Services Commissioner > Publications and Resources > Fact Sheet 11
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Fact Sheet 11
Negligence
A legal practitioner has a duty to provide professional services with reasonable care and skill. A legal practitioner who fails to do this might have breached their duty of care to a client and been negligent.
Some acts of negligence are more serious than others. For example, having the wrong description of a property on a contract of sale is usually far less damaging to a client than a practitioner’s failure to lodge forms with a court or registrar when this failure might lead to the case being struck out. Between the two extremes there are many other acts or omissions which might also be negligent.
Clients can bring a consumer dispute to the Office of the Legal Services Commissioner (OLSC) about an alleged act of negligence and, if appropriate, the OLSC will try to help the client and the practitioner reach a satisfactory resolution. In simple cases this can mean an apology, the correction of an error, the reduction of an account, and so on.
Negligence and disciplinary action
The Legal Profession Act 2004, Legal Profession Regulation 2005 and the Professional Conduct Rules set out the rules which solicitors and barristers in New South Wales must follow and the standards of legal practice they must meet. The Act sets out two kinds of breaches of those standards:
- Unsatisfactory professional conduct includes conduct occurring in the practice of law, which falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.
- Professional misconduct includes conduct which involves a substantial or consistent failure to reach reasonable standards of competence or diligence.
Unsatisfactory professional conduct and professional misconduct can lead to disciplinary action. This can involve a reprimand or referral to the Legal Services Division of the Administrative Decisions Tribunal (‘the Tribunal’). The purpose of disciplinary action is to protect the public, try to ensure that breaches do not occur again and to correct the professional conduct that causes them.
The Tribunal and superior courts have determined that negligence is a form of unsatisfactory professional conduct or professional misconduct only when it goes beyond ‘mere carelessness’ or ‘mere negligence’. For example:
- A legal practitioner who does not know that a contract for the sale of land must be stamped before it can be registered shows a lack of professional competence and diligence. This could lead to disciplinary action.
- A practitioner might know that a contract needs to be stamped but make a simple mistake when calculating the amount of stamp duty due. This would probably be ‘mere negligence’ — not a breach of the Act leading to disciplinary action.
The dividing line between ‘mere negligence’ and misconduct under the Act is not clear. In the experience of the OLSC, very few complaints of negligence amount to professional misconduct or unsatisfactory professional conduct.
Compensation
Clients who complain to the OLSC about legal practitioners usually do not receive compensation even when disciplinary action is taken against the practitioner in the Tribunal. Under the Legal Profession Act the Commissioner and the Tribunal can order compensation, but only in cases where:
- There is a reasonable likelihood that the practitioner will be found guilty of unsatisfactory professional conduct or professional misconduct,
- the complainant has suffered a loss as a result of that conduct,
- it is in the interests of justice, and
- the complainant has not received, and is not entitled to receive, compensation from the Fidelity Fund or compensation under an order made by a court (including compensation as a result of negligence proceedings against the lawyer).
If proceedings are brought in the Tribunal, it can also make compensation orders if it finds the practitioner guilty of professional misconduct or unsatisfactory professional conduct and the complainant has suffered financial loss - costs incurred, income foregone, rights or entitlements now lost or payments actually made.The amount of compensation awarded by the Tribunal is limited to $25,000 and the maximum compensation by the Commissioner is $10,000 unless the practitioner consents to a higher amount.
A compensation order may be filed as a judgment of the local court and enforced as such.
Taking action for negligence
Complainants who want compensation from a legal practitioner usually have to take private legal action against the practitioner for professional negligence. Legal action can be taken in the courts or in the Consumer, Trader and Tenancy Tribunal (for claims of under $25,000).
When considering legal action against a lawyer, complainants should get legal advice. Sources of assistance include:
- Law Access on 1300 888 529.
- a Community Legal Centre, which can provide some free legal advice, information and referrals. To find the nearest legal centre, call 02-9318 2355.
- The Registrars or Deputy Registrars (formerly Chamber Magistrates) in Local Courts can assist with procedural advice about the court process or documents to be put to the Court.
Complainants can lodge a complaint with the OLSC at the same time as taking action for professional negligence. The two processes are different:
- A complaint with the OLSC can lead to dispute resolution or disciplinary action. There are no fees or charges involved, however there is limited opportunity for the complainant to receive compensation.
- An action for professional negligence can lead to a court order for damages. It can be expensive — even if successful — because it usually means hiring another lawyer to present the case.
The OLSC does not play any part in private court actions for professional negligence. Complaints against practitioners will usually not be finalised until court proceedings are completed.
October 2005
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