INTRODUCTION
5.1 In the preceding Chapter, the Commission detailed and commented upon the “core” recommendations for the proposed new system of handling complaints against lawyers. In this Chapter, we look at related - but no less important - matters, dealing with education and preventive measures in respect of legal ethics and professional responsibility; confidentiality and privilege; disputes over fees and costs; solicitors’ liens; clarification of terminology and transitional provisions in the Legal Profession Act 1987; and reciprocal enforcement of disciplinary orders. The Commission also makes a recommendation for a new method of funding the complaints handling system, through a levy or charge on lawyers’ practising certificates.
EDUCATION, PREVENTION AND PROFESSIONAL STANDARDS
58. The Law Society should take immediate steps to adapt and introduce the “Client Care” program developed in England and Wales, which is directed towards the improvement of lawyer-client communications and relations, including the establishment of internal ethics committees and complaints handling procedures.
59. The Law Society and the Bar Association should collaborate on the production of a Legal Profession Code of Ethics and Professional Responsibility, to be completed and presented to the Attorney General within one year, which is oriented towards lawyers’ obligations to clients and to the community.
60. The professional associations should ensure that more basic and continuing education about legal ethics and professional responsibility is available, including courses which are incidental to the practising certificate and disciplinary systems.
61. The professional associations should ensure that adequate counselling and assistance programs are provided for legal practitioners who seek help or are required to seek help to resolve personal, professional, or commercial difficulties.
62. Successful completion of a subject which adequately deals with the issues of legal ethics and professional responsibility should be compulsory for LLB students in University law schools in NSW (and for students in the Admission Board courses), and should be compulsory for admission to practise as a barrister or solicitor of the Supreme Court of New South Wales.
63. The professional Councils and the Legal Services Ombudsman should ensure that there is feedback from the disciplinary system to the legal profession in order to facilitate changes in (basic, practical or continuing) legal education or legal practice aimed at remedying common problems.
Commentary
Client Care (Recommendation 58)
5.2 In DP 26, the Commission discussed at some length issues relating to the enhancement of standards of professional ethics and practice, and made some proposals with this aim. Unfortunately, few of the submissions addressed these issues or proposals. While prevention may be preferred to cure in the homily, it excites less interest in the media. Nevertheless, the Commission has continued its research and consultation program in this area, and we make a number of recommendations about education and prevention in this Report.
5.3 In Recommendation 58, the Commission calls on the Law Society to take steps to adapt and adopt the “Client Care” program, which has been successful in England and Wales. The program is aimed at the improvement of lawyer-client communications and relations, and involves the organisation of all firms of solicitors in such a way as to emphasise matters of legal ethics and professional responsibility, such as through the creation of in-house ethics and complaints committees, specific training programs, greater supervision, and clear lines of authority and responsibility in matters of ethics.1
5.4 One aspect of the Client Care program in England and Wales which the Commission does not endorse, however, is the requirement that a client first go through a law firm’s internal complaints handling procedures before he or she may approach the Solicitors’ Complaints Bureau. While direct and consensual dispute resolution will often be effective, the Commission does not believe that clients should be compelled to go through the law firm where they feel that this would be futile, unpleasant, or even traumatic. It may be that in future the Legal Services Ombudsman will sometimes recommend a direct approach to the firm (or barrister) involved, but this should not normally be a pre-condition for receiving the complaint.
5.5 The Commission is aware that the Law Society of New South Wales is familiar with the English Client Care scheme and conducted a CLE seminar on this topic at the "LEXPO Congress ’92".2 The purpose of the recommendation is to encourage further development of Client Care principles and practices in New South Wales in the near future.
Developing Codes of Ethics and Practice (Recommendation 59)
5.6 The production of industry-wide Codes of Practice is now commonplace in Australia, and is thought to be an essential part of (or pre-condition to) the regulation of any industry or occupation. For a profession which so highly prizes the “service ideal”, it is remarkable that the legal professions in Australia have been so slow to produce Codes which are of any value to clients.
5.7 The New South Wales Bar Association produces a set of Rules for its members, which effectively have application to all barristers when a rule is recognised by the courts. The Law Society of New South Wales includes a considerable amount of material on ethics in the loose leaf service that is provided to all solicitors,3 in the form of textual discussion, annotated legislation, rules and regulations, and a collection of ethical rulings, practice guidelines and special bulletins from the Law Society Council, but has yet to produce the long-awaited codification.4 Both the Bar Association’s and the Law Society’s materials, however, are intended to be read by practitioners, and suffer from the criticism levelled by Maley at the traditional approach to “professional ethics”:
By far the most attention is paid ... [to] detailing the professional’s obligations to his colleagues, to matter of etiquette between colleagues, and to carrying his professional practice in ways which do not infringe colleague-prerogatives or give him a professional (especially an economic) advantage.5
5.8 What the Commission seeks as a result of Recommendation 59 is:
a practical, modern, client-centred approach ... While there is a need to preserve professional comity, legal ethics should be about defining and encouraging the provision of proper services to clients, having regard to general concerns about candour, fairness, and social responsibility. Ethical behaviour, for example, will sometimes require counselling clients that they may not pursue a certain course of action.6
5.9 The submission from Mr Barry Hart, of the Chelmsford Victims’ Action Group, makes the point that the Legal Profession Act and the Medical Practitioners Act do not speak to the consumers of professional services. According to Hart, the emphasis should be on the protection of the public by spelling out the expected standards of practice, and by defining professional misconduct from the public’s point of view rather than in terms of what the profession regards as unacceptable.7 Whether or not these matters should be included in the basic legislation, they certainly should be expressed in a professional code of practice.
5.10 Apart from being more client-centred, a new professional code of conduct should take account of the contemporary circumstances of legal practice in New South Wales,8 such as the growth of public sector and corporate sector legal services, the changing organisation of private sector legal work (eg, with the growth of the “mega-firms” and increasing inter-state and international practice), the opening up of advertising and marketing of legal services and the consequent increase in competition (from within and without the profession), and the needs and imperatives of practising law in a multicultural society.9
5.11 In its recent Report on Accountability of the Legal Profession, the Victorian Law Reform Commission (VLRC) recommended10 that the two branches of the profession collaborate on the production of a Common Code of Professional Conduct which would spell out and make readily available to both lawyers and clients the high standards of service, skill and integrity which clients should be able to expect of lawyers (and lawyers should expect of themselves). The VLRC commented that:
A Common Code might lay down and elaborate upon general rules relating to a lawyer’s duties of integrity, candour, competence, independence, diligence, confidentiality, impartiality, courtesy and fidelity to the law. A Common Code might also deal with the minimum obligations of all lawyers to make their services available to the public, their obligation not to withdraw their services except in specified circumstances, and their ethical obligation to charge fair and reasonable fees. The Commission would be surprised to learn that there is not common ground between [barristers and solicitors] in relation to these and other professional responsibilities.11
5.12 This Commission agrees with the (now defunct) VLRC that there is merit in the professional associations cooperating in the production of a client and community-centred (Common) Legal Profession Code of Ethics and Professional Responsibility, and we have recommended accordingly. The professional associations would be free, of course, to supplement the Common Code with material which is pertinent only to either barristers or solicitors.
Continuing and further legal education programs (Recommendation 60)
5.13 In DP 26, the Commission stated that the “foundations of understanding of professional responsibility gained at law school must be regularly reinforced in practice.”12 The purpose of Recommendation 60 is to remind the professional associations and other providers of further and continuing legal education that more seminars and workshops on legal ethics and professional responsibility should be added to the many programs currently offered on various areas of substantive law, practical skills development and office management. Thought should be given to requiring practitioners to undertake periodic courses on legal ethics and professional responsibility as a condition of maintaining a current practising certificate.
5.14 The Commission has recommended in this Report that the proposed Legal Services Tribunal be given considerable flexibility to fashion an appropriate, customised sanction following a finding of unsatisfactory professional conduct or professional misconduct. This would include the power to order that the person undertake and successfully complete a specified course of further legal education, or to place a condition upon a person’s practising certificate requiring the person to undertake further education.13 One order which should be utilised, where appropriate, is for the lawyer involved to undertake and successfully complete an approved course of continuing or further education relating specifically to legal ethics and professional responsibility.
5.15 As the Commission noted in DP 26,
In California, the State Bar has established an “Ethics School” for the purpose of facilitating such orders, and lawyers in that state may be required to attend for a specified period of time and successfully complete a designated program at the School. The Commission can see some virtues in the establishment of a similar institution in New South Wales, although it is recognised that this State has only about 5% the number of lawyers that California has, and economies of scale may limit such innovations here. Nevertheless, this is a matter worthy of consideration, perhaps in conjunction with associations representing other professions and with bodies devoted to ethical training, such as the St James’ Ethics Centre in Sydney.14
Counselling and assistance programs (Recommendation 61)
5.16 There is strong evidence in Australia and overseas suggesting that legal practice can be a particularly stressful occupation. Many of the most serious disciplinary offences in recent years have been occasioned more by personal problems, such as drug or alcohol dependency and gambling, than by lack of professional competence.
5.17 In this recommendation, the Commission seeks to highlight the need for adequate counselling and assistance programs for legal practitioners who seek help to resolve personal, professional, or commercial difficulties. Submission to a counselling or assistance program also should be available as a disciplinary sanction, so that such a course may be directly required or prescribed as a condition on a lawyer’s practising certificate.
5.18 Participation in a counselling or assistance program should normally be on a completely confidential basis; however, where participation follows a disciplinary order or condition, then information on progress should be made available (on a confidential basis) to the Legal Services Ombudsman and/or the relevant professional Council, depending upon who is charged with monitoring the particular case.
5.19 The Commission is aware that the professional associations already have established some counselling and assistance programs for practitioners. For example, the NSW Law Society operates “LawCare”, a confidential and voluntary counselling service to help solicitors “whose professional lives are threatened by work or financial pressures, alcohol or other drug dependency, family difficulties and so on”.
Teaching legal ethics and professional responsibility in the law schools (Recommendation 62)
5.20 As discussed in DP 26,15 several law schools (the University of New South Wales, the University of Wollongong, and the planned course at the University of Newcastle) and the Admission Board have compulsory subjects covering legal ethics and professional responsibility; another law school (the University of Technology, Sydney) includes legal ethics and the legal profession among a cluster of “skills subjects” from which students are obliged to choose; while the remaining law schools (University of Sydney, the Australian National University, Macquarie University) do not offer subjects in this area. The admission authorities (the Joint Qualifications Committee of the Supreme Court) generally require the study of legal ethics in order to satisfy the educational qualifications for admission to practice as a lawyer in New South Wales, but this may be satisfied by the Admission Board course or the segment on legal ethics taught at the College of Law.
5.21 The Commission noted in DP 26, and still believes strongly that:
the study of legal ethics and professional responsibility should be an integral part of any law school program, whether this involves mounting a discrete, compulsory subject or dealing with these questions as a significant part of a larger subject. It is only during this formative period in a lawyer’s education that there is the opportunity for sustained study, discussion and reflection.16
Only one submission was received on this issue, with the Bar Association agreeing with the Commission’s view.17
5.22 While accepting that the university law schools should be accorded a very large degree of autonomy in curriculum matters, the Commission recommends that a subject on legal ethics and professional responsibility be compulsory for LLB students. Although the actual length of university studies varies considerably depending upon the particular degree (or, more commonly, joint degree) program undertaken, virtually all LLB students do the equivalent of three years of full-time study of law subjects. It is not unreasonable to ask potential lawyers to devote a small portion of that time learning about and thinking about basic issues of professional responsibility, the delivery of legal services, the structure and regulation of the profession, and so on. Such matters are at least as important for incipient lawyers as are the substantive “building block” subjects or “skills subjects” which are compulsory in all law schools.
5.23 The effective teaching of professional responsibility in NSW may be assisted in future through the efforts of the Law Foundation’s Centre for Legal Education. The Centre has initiated and is providing support to a Standing Committee on the Teaching of Professional Responsibility. One of the possibilities being considered by this Committee is the preparation of a “model curriculum” for teaching in this area, with written materials and other teaching resources. The model curriculum could be used in its entirety, or law teachers could pick and choose from the available materials to design or customise their own subject. The Commission welcomes this initiative.
5.24 The Commission wishes to make clear its view that it is inadequate to teach legal ethics and professional responsibility as if these are matters are etiquette which must simply be transmitted, committed to memory and recalled on the appropriate occasions (such as at the examination). Rather, these are matters which are bound up in the fundamental nature and essence of lawyering and legal professional practice, which necessitates a process or problem-solving approach to the subject. Ideally this involves a clinical approach, and certainly the opportunity for reflection and discussion, but in any event we regard the “large lecture” as an unsuitable pedagogical technique (and the large lecture hall an unsuitable venue) for creating a professional sensibility and developing a thoughtful and lasting commitment to ethical conduct.
5.25 It is not yet clear what practical effect the proposed uniform mutual recognition legislation (regarding reciprocal interstate admission of lawyers) will have on educational requirements for admission, or what practical effect the proposed changes in practical legal training will have on teaching professional responsibility prior to admission. Professional responsibility is one of the “areas of knowledge” that is meant to be incorporated into every law degree program. In any event, the Commission believes that it is appropriate to develop university law school programs in this state with an eye toward the enhancement of professional responsibility and professional standards.
Feedback from complaints to the educational system (Recommendation 63)
5.26 In DP 26, the Commission expressed concern that:
The existing disciplinary system for lawyers, in common with most quasi-judicial systems, proceeds on a case-by-case basis with the focus on the handling of individual complaints. There is no person or institution charged with maintaining an overview of the whole process, to ascertain trends in the demography or subject matter of complaints or to make recommendations about changes in legal education or practice aimed at remedying common problems.18
5.27 We contrasted this deficiency with the approach of the NSW Department of Health’s Complaints Unit, which sees one of its major roles as monitoring the whole system of health care provision as well as processing individual complaints. To this end, the Complaints Unit has developed a sophisticated, computerised data base which can cross-reference the information using a number of variables. For example, the data base can provide information about trends in complaints according to geographic region, area health authority, medical speciality, hospital, and so on. The information gained may then be fed back to the specialist medical colleges, the Health Department, hospitals and others in order to address specific concerns and to assist in education and policy development.
5.28 As discussed in Chapter 2 of this Report, the Commission identified a number of common problems in the course of its File Surveys of the complaints files of the Law Society and (to a lesser extent) the Bar Association, which were not picked up by the professional Councils or their officers and fed back to the profession for its information and action. For example, it became apparent from the manner in which most solicitors responded to complaints that many solicitors, at least, fail to put their instructions in writing or get clients to sign them, fail to keep file notes of communications with clients, and fail to disclose clearly the fee arrangements and responsibility for disbursements. A Special Bulletin to all solicitors from the Law Society reminding them of recommended practice and procedure in this area, and offering CLE or other training and assistance, would no doubt prevent many disputes from arising in the first instance and would lead to the faster resolution of those disputes which still do arise.
5.29 The Law Society’s new six-monthly publication on “trends and statistics” emerging from the disciplinary process is useful,19 but does not contain enough qualitative analysis or advice beyond the presentation of the raw data - a conscientious practitioner reading the publication would learn nothing about how to improve his or her professional standards, and a CLE provider would likewise learn little about the needs of the profession.
5.30 More and better reporting (in the journalistic sense) of the decisions of the Legal Services Tribunal would also be very valuable. The position in NSW has improved considerably in recent years; the Law Society now includes full reports of the Disciplinary Tribunal as a supplement to the Law Society Journal, and the Bar Association has a new “Legal Ethics” section (in different colour paper) in its quarterly Bar News, with digests of Standards Board and Disciplinary Tribunal decisions. It is important that the material on discipline be presented in a distinct and “eye-catching” manner, so that lawyers who browse the professional magazines may actually take some note of the contents. For example, the Commission commends the Law Society of Upper Canada (Ontario) in this regard for its new periodical Discipline Digest.20 This publication clearly and concisely sets out the facts of each disciplinary case, the relevant principles, the disposition, and the reasons for the disposition. Lawyers in Ontario can no longer have any excuse for failing to keep abreast of the standards of professional conduct required of practitioners.
5.31 In Recommendation 63, the Commission proposes that a positive responsibility be placed on the Legal Services Ombudsman and the Councils of the Law Society and the Bar to ensure that there is feedback from the disciplinary process to the profession in order to remedy common problems and improve the standards of the delivery of legal services. For the bodies charged with the day-to-day investigation of complaints against lawyers this should not be an onerous task, and greater efforts in this area should be handsomely repaid over time.
FUNDING
64. A graduated charge or levy on the annual practising certificate fees of legal practitioners should be imposed to fund at least the major portion of the complaints handling system, including the establishment and operation of the office of Legal Services Ombudsman. The charge or levy should be fixed by regulation by the Attorney General. The system should continue to have access to funds from the Statutory Interest Account and, if necessary, from Consolidated Revenue.
Commentary
5.32 At present, the funding of the administration of the current complaints handling and disciplinary system, including the activities of the professional Councils, is drawn entirely from the Statutory Interest Account - ie, the interest on clients’ moneys which are under the temporary control of solicitors and the Law Society. Statutory Interest money is used to reimburse the costs of the Law Society and Bar Councils and their committees and departments involved in the investigation of complaints,21 the costs of operating the Standards Board, Disciplinary Tribunal and Conduct Review Panel, and other costs (eg court actions) involved in prosecuting “unqualified practitioners”22 or lawyers whose professional conduct has been complained about.23 (Other disbursements from the Statutory Interest Account24 are made for the purposes of legal aid, the supplementation of the Fidelity Fund, legal education, the Law Foundation, and the operation of the Legal Fees and Costs Board.25) The disbursement of funds from the Statutory Interest Account is “determined” by the Law Society Council and “approved” by the Attorney General.26 This is supplemented by a considerable amount of voluntary labour by the members of the professional Councils and their Professional Conduct Committees.
5.33 As discussed in DP 26, there are at least two other possible sources of funding for the complaints handling system, which can supplement or supplant the existing source. First, funding from Consolidated Revenue is a possibility. The Health Department’s Complaints Unit (and the proposed Health Care Complaints Commission) is funded entirely from Consolidated Revenue, with no direct contribution from the medical profession or other health care professionals under the Unit’s jurisdiction. The expenditure of public money for this purpose is justified on the basis that:
the regulation of health care professionals is a matter of general public interest of sufficient importance to warrant the expenditure of public funds. Having given up their own regulatory responsibilities to an independent body, the medical and allied health professions have likewise been relieved of the responsibility for funding the system. Unlike lawyers, of course, health care professionals do not hold clients’ funds in trust, and thus there is no equivalent ancillary source of funding.27
5.34 The other alternate source is revenue raised from an increase or levy on annual practising certificate fees for barristers and solicitors. In DP 26, the Commission noted that American pattern is to rely largely on this source - the elaborate and expensive lawyers’ disciplinary system in California is funded entirely out of annual fees, while statutory interest money is reserved for application to legal aid and other public interest programs.28
5.35 The American Bar Association’s Commission on the Evaluation of Disciplinary Enforcement wrote recently that the “Commission is unanimous in its conviction that adequate funding of the disciplinary [system] must be provided even if it requires a substantial increase in the annual assessment of lawyers.”29 Similarly, the American Bar Association’s Model Rules for Lawyer Disciplinary Enforcement (“ABA Model Rules”) provide for the imposition of a levy on practising lawyers in order to fund the disciplinary system,30 on the basis that:
The profession recognizes that the creation and maintenance of an effective structure for discipline and disability proceedings is one of its primary responsibilities. The level of funding for the agency will determine whether it can hire experienced, full-time lawyers as counsel, or whether it can rely upon volunteers, part-time participants and clerks. Adequate funding will enable the agency to unravel a complex or obscure fact situation with which it might not otherwise be able to cope. The level of funding will determine how promptly allegations can be resolved, thereby affecting the length of time the lawyer remains uncertain about his future, the extent to which clients are exposed to further harm, and the amount of public confidence in the system.31
5.36 The ABA Model Rules do admit the possibility of some public funding, as well:
The establishment of an adequate structure for lawyer discipline and disability proceedings is one of the principal obligations of the legal profession. It is likely therefore that the funding of the system will come primarily from lawyers admitted to practice in the state. It should be noted, however, that there is also a strong public interest in effective disciplinary enforcement. It is for that reason not inappropriate for public funds to be used toward financing the system.32
5.37 In DP 26, the Commission raised for consideration the future funding of the disciplinary system and related processes. The submission received from the Commissioner for Consumer Affairs, Mr John Holloway, stated that “whatever course [of regulation] is adopted, costs should be met wholly, or in part, by appropriate funding from the legal profession.”33 The Kingsford Legal Centre submitted that funds raised from practising certificate fees or a levy on practitioners should be used to supplement Statutory Interest Account funds, although this should not lead to a position whereby the profession feels entitled to control the disciplinary process.34 The Australian Consumers’ Association submitted that Consolidated Revenue and practising certificate fees could be used to supplement funding, and considered that consumers should have the majority vote in the way that Statutory Interest Account money is disbursed, since this is clients’ money rather than solicitors’ money.35
5.38 By way of contrast, the legal professional associations were content with the present funding arrangements. The Law Society submitted that the use of Statutory Interest Account funds is
thoroughly compatible with the public interest. That system provides direct relief to consumers of legal services who have suffered at the hands of a legal practitioner and it maintains standards for the delivery of legal services.36
5.39 The Bar Association opposed any effort to impose a financial obligation on the profession, submitting that:
Practising certificate fees are high enough now. Many have difficulties in these recessionary times in paying them. An increase in fees or a levy to fund an external disciplinary system will merely provide a further financial barrier to entry to the Bar and would be anti-competitive.37
5.40 The Commission has concluded, however, that it is appropriate and desirable for legal practitioners to bear the primarily responsibility for funding the disciplinary system and its ancillary features and processes, and we have so recommended. The Commission agrees with the American Bar Association that, in theory, it also is appropriate for public funds (Consolidated Revenue) to be used for these purposes. As we noted in DP 26, arguably “the community has as great an interest in the proper and effective regulation of lawyers as it does in the regulation of doctors”.38 However, we accept that competing demands on public funds make such a commitment unlikely at this time.
5.41 In an event, a relatively modest addition to practising certificate fees or a (stepped) per capita levy on legal practitioners would not only obviate the need for public funding but also would be sufficient to wean the disciplinary system from its reliance on Statutory Interest Account money. This would free up the equivalent amount of money for legal aid, where additional funding is desperately needed. In the year ending 30 June 1992, disbursements of over $3.36 million were made from the Statutory Interest Account alone for the purposes of: (1) the costs of administration of Part 10 (Professional Misconduct) of the Legal Profession Act 1987 ($749,291 - mainly the operation of the Standards Board, the Disciplinary Tribunal and the Conduct Review Panel); and (2) reimbursement of the expenses of the Law Society ($2,291,432) and the Bar Council ($320,934) incurred in connection with administering Parts 9 (Unqualified Practitioners) and 10 of the Act.39
5.42 According to the professional associations, there were 11,805 “active solicitors” (including 5511 principals) in New South Wales as at 1 July 1992, and 1,723 “practising barristers” as at 4 October 1992, or a total of 13,528 with current practising certificates. Thus, an annual average charge per NSW lawyer of:
- only $75 each would yield $1,014,600 per annum;
- only $100 each would yield $1,352,800 per annum;
- only $125 each would yield $1,691,000 per annum; or
- only $150 each would yield $2,029,200 per annum.
5.43 The Commission believes that the charge should be graduated, with principal solicitors and more senior barristers (with, say, more than seven years of practice at the Bar) paying significantly more than other lawyers.40 Further gradations could be made if it was thought desirable. The increasing numbers of lawyers entering the profession should ensure that the annual levy need not increase by very much over time.
5.44 Having regard to our own staffing arrangements and annual budget,41 the Commission anticipates that the annual cost of the office of Legal Services Ombudsman should be less than $1 million, which would easily be covered by the $75 (average) charge; a greater charge would replace Statutory Interest allocations for other parts of the system, such as for the operations of the Legal Services Tribunal, and free up the equivalent amount for legal aid.
5.45 With due respect to the Bar Association, it is hard to see how such a modest contribution from barristers towards the funding of the system which ensures professional responsibility and proper delivery of legal services to the public, as well as offering education and assistance to lawyers, would have any (negative) effective on entry into the profession or competition among legal professionals. Leaving aside the irony of the Bar Association expressing concern about anti-competitive measures, but having regard to the current costs of practising at the Bar - the expense of chambers, practising certificate fees, special court dress, maintaining a legal library, and so on - the sort of charge we have suggested for disciplinary purposes is trivial by comparison.
5.46 The amount of the annual charge or levy should be fixed by the Attorney General, the responsible minister, by regulation. The Attorney would no doubt wish to consult with the Legal Services Ombudsman, the professional Councils, and other interested parties on this matter. However, although this fund raising effort would bear a relation to the system of administering practising certificates, it is imperative that the professional Councils do not have control over the setting of the charge or levy, so that it is beyond their power to starve the Legal Services Ombudsman of necessary funds.
5.47 In Recommendation 28, above, the Commission proposes that the professional Councils maintain a discretionary fund from which they can make a direct ex gratia award of compensation to a client (or another category of complainant) where this is the most fair and appropriate way of remedying the person’s consumer-type grievance against a lawyer. This is the position in Victoria, and it appears to have worked well.
5.48 In Recommendation 55, the Conduct Review Panel is empowered to recommend such a course of action to the relevant Council. Most matters requiring compensation will probably will be dealt with under the more routine dispute resolution procedures proposed in Recommendations 15-20; however, there will be cases in which, for one reason or another, compensation has not been considered at an early stage and it would be unfair or futile to attempt to refer the matter for dispute resolution at a later stage. As with other aspects of the complaints handling system, the Commission believes that resourcing this discretionary fund should primarily be the responsibility of members of the profession, through a graduated charge on practising certificate fees.
RELATED MATTERS
Issues of confidentiality and privilege
65. All files held by the Legal Services Ombudsman, the Law Society and the Bar Association, relating to the investigation of a complaint (or held by a mediator or arbitrator appointed for this purpose) should be immune from civil discovery and exempt from production under the Freedom of Information Act 1989.
66. All files held by the Legal Services Conduct Review Panel for the purposes of reviewing the actions and decisions of the Legal Services Ombudsman, the Law Society, or the Bar Association in relation to a complaint also should be immune from civil discovery and exempt from production under the Freedom of Information Act 1989.
67. To the extent that it is reasonably necessary in order to defend allegations made in a complaint or information, a legal practitioner should be entitled to disclose confidential information to the investigating body which might otherwise be the subject of the client’s legal professional privilege. As with other such communications made to the Law Society, the Bar Association, the Legal Services Ombudsman or the Conduct Review Panel relating to a complaint, this information should be immune from civil discovery and exempt from production under the Freedom of Information Act 1989. In the event that the matter proceeds to a hearing before the Legal Services Tribunal, unless the client waives privilege, evidence which relates to privileged communications between client and lawyer should be taken in private or be subject to an order prohibiting publication.
Commentary (Recommendations 65-66)
5.49 While generally endorsing the need for “open justice” in the complaints handling system, the Commission nevertheless recognises that the position in respect of investigations and informal dispute resolution efforts must of necessity be somewhat different. In DP 26, the Commission considered that privilege (from civil discovery and Freedom of Information) normally ought to attach to confidential material gathered in the course of investigations, trust account inspections or other aspects of the administration of the disciplinary process:
The disciplinary process should not be used as a form of discovery in contemplation of civil litigation, nor as a means of commercial debt recovery. There is a strong public interest in ensuring that the investigation of complaints against lawyers is conducted in a thorough, active manner, and that lawyers are under an obligation to be candid with the disciplinary authorities. Confidentiality is an essential part of any investigative procedure, while subsequent proceedings should, to the greatest extent possible, be subject to principles of open justice. The confidentiality of other investigative agencies, such as the police, the Director of Public Prosecutions, the Independent Commission Against Corruption and the Ombudsman is already recognised in the FOI Act. The Commission proposes that the investigation of complaints against legal practitioners be treated in the same way, and be given express protection in the Legal Profession Act and the Freedom of Information Act.42
5.50 The ABA Model Rules also recognise the need for confidentiality prior to the filing and service of formal charges, except that the pendency, subject matter, and status of an investigation may be disclosed where the respondent has waived confidentiality or the proceeding is based on allegations that have become generally known to the public.43 The commentary attached to the Model Rules notes that the confidentiality “is primarily for the benefit of the respondent, and protects against publicity predicated upon unfounded accusations”; however, where the allegations already have received public attention the disciplinary agency must be able to acknowledge the existence of an investigation, otherwise it “could lead to a mistaken notion that the agency is unaware of or uninterested in allegations of misconduct, without in any way protecting the reputation of the lawyer”.44
5.51 The same principles apply in respect of the files and other confidential material held by the Conduct Review Panel. The Panel operates to impose an external check on the investigative and prosecutorial responsibilities of the professional Councils (and the Legal Services Ombudsman, once established), and is thus really part of the investigative apparatus which should be accorded privilege and exemption from FOI. As the Commission noted in DP 26, concerns about the privilege of files turned over by the professional Councils led to the Bar Council’s decision not to refer any files - and thus effectively to prevent any review - for some years until this was informally resolved in late 1991.45
5.52 All of the submissions received on this topic - from the Law Society, the Bar Association, the Registrar of the Disciplinary Tribunal, Mr Robert Bennett, and the Community Justice Centres - agreed with these proposals in DP 26.
5.53 The question of confidentiality and privilege in respect of mediation and other forms of dispute resolution is considered above, in the commentary following Recommendation 19.
Commentary (Recommendation 67)
5.54 In this Recommendation, the Commission has sought to balance the rights of a complainant to suffer no disadvantage or discouragement in the lodgment of a complaint with the right of a legal practitioner to have the opportunity to defend properly any allegations which bear upon his or her professional reputation or rights of practice.
5.55 Under the rules and ethics of the legal profession, a lawyer may not disclose confidential communications made within the lawyer-client relationship; indeed, with some limited exceptions, such communications are privileged from discovery through the processes of the courts, a position which most other professional-client communications (such as accountant-client) do not enjoy. The confidentiality and privilege belong to the client, and it is only the client who may waive these rights.
5.56 In the context of complaints against lawyers, this position can cause problems in so far as a legal practitioner effectively may be deprived of the opportunity to defend himself or herself, when a defence is in truth available. A practical example of this would be the situation where a client complains about his or her barrister’s conduct of the cross-examination of a critical witness in a criminal trial. The barrister, who is under a duty not to wilfully mislead the court nor to put propositions which are known to be false,46 may have carefully tailored the cross-examination because of confidential communications between the barrister and client which, say, indicate that the witness is telling the truth, or that the client is factually guilty.
5.57 The Commission proposes that there should be a limited waiver of client confidentiality, but only to the extent reasonably necessary for the lawyer to defend the allegation. The disclosure of client confidences by a lawyer absent this necessity would in itself amount to a breach of ethics, and a quite serious breach where the disclosure is made for the purpose of intimidation or revenge.
5.58 Any disclosures of confidential material that are made to the investigating authorities or the Conduct Review Panel are privileged under the preceding two Recommendations. In order to ensure that the client suffers no disadvantage from disclosure at the hearing stage, the Commission proposes that (unless the client agrees to waive privilege) such evidence should be taken in private or be the subject of a non-publication order.
Disputes about fees and costs
68. It should be a rule of practice that a legal practitioner is obliged to disclose clearly in writing, at the commencement of the lawyer-client relationship, all reasonably foreseeable fees, costs and disbursements, followed by a written fee agreement in Plain English.
69. Every bill of costs rendered by a legal practitioner should contain a standard, clear, brief statement informing the client what to do in the event of any question or problem, and what procedures are available for external review of the bill.
70. The system of taxation of bills of costs by the Supreme Court should be replaced by a two-phase process of mediation and arbitration, to be determined by the Attorney General’s Working Party on Legal Costs. This process should be integrated into the general complaints-handling system recommended in this Report, with access through the office of the Legal Services Ombudsman.
Commentary (Recommendations 68-70)
5.59 Although the issue of barristers’ and solicitors’ remuneration47 is not expressly part of the Commission’s terms of reference for this inquiry, disputes about legal fees, costs and disbursements represent a significant proportion of the complaints received by the legal professional associations48 and are the cause of a good deal of the current public disquiet about lawyers. The Commission believes that it is necessary and proper for this matter to be dealt with as part of the overall rationalisation of the system of complaints-handling and discipline.
5.60 Under the existing law in NSW, a solicitor may not sue for costs until at least one month after the delivery of a bill of costs to the client.49 Upon the application of a client, the Supreme Court may order a solicitor to provide a detailed bill of costs to a client, and may order the surrender of documents held pursuant to a solicitor’s lien.50 In the event of a dispute about the amount of the bill, a client may apply to the Supreme Court to have the bill “taxed” (appraised) by Court officers.51 If the bill is reduced by a factor of at least one-sixth by taxation officers, the client has “won”, and the losing party bears the expenses of the process.52
5.61 In DP 26,53 the Commission noted that:
It is widely accepted that taxation is a cumbersome, little-understood, and generally unsatisfactory method of resolving disputes about fees and costs.54 It is well beyond the reach of most clients to initiate an action in the Supreme Court simply to require a solicitor to render a proper bill of costs, or to have a lien lifted, or to have the fairness or otherwise of a bill of costs assessed. Nor is there any special reason why, if the formal Courts must play a role, such matters could not be heard in the lower courts.
5.62 The Commission’s proposed reforms in this area are based on a series of related propositions, that: (1) there is no marked inherent difference between a client-lawyer dispute over fees and costs and other types of client-lawyer dispute; (2) the procedures for resolving disputes over fees and costs should be integrated into the general system for dealing with client-lawyer disputes; (3) the procedures for resolving disputes over fees and costs should be simple, quick, inexpensive and accessible, with an emphasis on consensual or summary procedures;55 and (4) such disputes are eminently preventable with proper disclosure and communication by lawyers at the initial stages of the relationship.
5.63 In DP 26,56 the Commission wrote that:
Any system designed to reduce the level of conflict between lawyers and clients over fees must address the prevention of such disputes as well as prompt and effective resolution. This is best achieved by ensuring that there is clearly communicated, “up-front”, written disclosure to clients (and prospective clients) of all reasonably foreseeable fees, costs and disbursements, followed by written fee agreements in Plain English. These documents should include information about the scope of the retainer, the basis of charges, the nature of disbursements, the method by which clients will be kept informed of the progress of the matter and the accrual of costs, and a contact person in the event of questions or problems. This “Client Care” approach was adopted by the Law Society of England and Wales about one year ago,57 and appears to be working well.
Similarly, every bill of costs rendered by a legal practitioner should contain a clear, brief statement at the end about what to do in the event of any question or problem, and how to seek external review.
5.64 Recommendations 68-69 do provide for comprehensible, up-front, written fee agreements, and for bills of costs to contain a standard simple statement of the procedure for review of the bill. The Commission’s research and the submissions received indicate that while most disputes are over the total amount of the bill - which takes the client by surprise - many disputes are also about the manner of billing (whether fees and costs are to be paid at the outset, or on an interim basis, or after the completion of the work or the judgment) and the lack of any express or obvious explanation for certain charges (such as large amounts for photocopying or travel, or telephone calls, or “perusal of documents”). It is incumbent upon lawyers to ensure that clients are clear about these matters at all times.
5.65 The Attorney General’s Department has advised the Commission that the Attorney General’s Working Party on Legal Costs, which is due to report early in 1993, “has determined that mandatory disclosure will be a requirement and that a guideline on what disclosure entails will be produced”, and that the need for a statement about review on all bills of costs also has been accepted, “although the precise detail of the statement remains to be finalised”.58
5.66 In Recommendation 70, the Commission proposes that the resolution of disputes about fees and costs be removed from the Supreme Court and replaced by a two-phase system of mediation (in the first instance) and arbitration (where mediation fails). That is, we recommend that such disputes normally should be resolved in the same manner that we have suggested other “consumer” type disputes be resolved. The Commission has not prescribed the detail of the proposed new system in this Report, as this is the subject of a review currently being completed by the Attorney General’s Working Party on Legal Costs which is expected to result in legislative action in 1993.
5.67 The Commission does make a positive recommendation that all fees and costs disputes should be channelled through the office of the Legal Services Ombudsman, even if the matter is to be sent to a court or other forum for determination. There are at least two very good reasons for integrating the procedures for resolving fee disputes into the general system for handling complaints against lawyers. First, one of the Commission’s central concerns in this Report is to rationalise the system and impose a single point of entry for all disputes, so that complainants are not given the “run-around” or forced to launch multiple actions, and so that they may be properly advised of their position and their options.
5.68 Secondly, it may be that a “fee dispute” also has a disciplinary aspect, whether or not this is apparent to (or of interest to) the client. Gross or fraudulent overcharging would amount to a serious disciplinary matter in itself, but it also may be that the client’s allegation of “overcharging” comprehends other concerns about the lawyer’s professional conduct, such as incompetent service or poor communications, which contribute to the client’s unwillingness to pay the bill of costs as presented.
Solicitors’ liens
Commentary (Recommendation 71)
5.69 Prior to the publication of DP 26, the Commission received a number of submissions from individuals as well as from the Australian Consumers’ Association (ACA) calling for the abolition of the common law “solicitor’s lien”. Under this lien, a solicitor may withhold all files, documents and other personal property of the client from the client until the solicitor’s bill of costs has been paid in full59 or there is a Supreme Court order requiring the solicitor to give up the documents.60 The ACA’s submission stated that: “The present lien which solicitors have over files until fees are paid is a substantial barrier to consumers being able to seek advice, complain, or take action against their previous lawyer. This barrier to accountability needs to be removed.”61 The NSW Combined Community Legal Centres Group (CCLCG) submission identified a particular problem with “the use of liens in disputes involving costs to impede access to documents necessary if the client is to obtain a second opinion about the matter”.62
5.70 These submissions were mentioned in DP 26,63 and the Commission noted that:
Solicitors’ liens can be a considerable source of tension in circumstances in which the client is already dissatisfied with the standard of service being provided. Solicitors have as much right to receive payment for their work as any other service-provider, but they do not deserve any special privileges in this regard. The dispute - and the relevant files and documents - belong to the client and not to the solicitor. Solicitors have access to the courts to recover unpaid fees, and are obviously in a better position than clients to make the running in a civil action. Serious consideration should be given to the abolition of solicitors’ liens, or closer supervision by the courts. The legitimate interests of solicitors also may be protected in other ways, such as by giving the first solicitor in a personal injury case a charge for the amount of the taxed or agreed costs upon the judgment money.64
5.71 The submission of the Kingsford Legal Centre agreed with that of the CCLCG on this point, and called for the abolition of solicitors’ liens.65
5.72 The Law Society’s submission in response to DP 26 disagreed with the proposition that solicitors’ liens ought to be abolished. The Law Society submitted that:
A solicitor’s lien for unpaid costs is an established common law right, which, should not in the opinion of the Law Society be abolished...There is already in Part 11 of the Legal Profession Act a mechanism for the taxation of solicitor and client costs and specific provision for a client to seek from the Court orders for the delivery of documents. While that existing system has received criticism on grounds of delay and its perceived cumbersome nature, the better solution to any problems involved in the delivery of documents may be sought in an improved procedure for costs review rather than to extinguish a long standing right which recognises the just entitlement of a solicitor to be paid for work done before the fruits of that work are delivered absolutely to a client.66
5.73 It is true that solicitors are not the only service-providers who may place a lien over property subject to the payment of outstanding fees - mechanics, repairers and bailees of goods have similar rights. However, the position of solicitors does stand alone in some important respects. First, members of the legal profession are meant to be motivated by the “service ideal” - that is, by “a tradition of devoted and disinterested service ... directed towards general community or cultural benefit rather than to self-interest”, as opposed to the purely commercial concerns of other trades, occupations and enterprises.67 Indeed, the submission of the Law Society places heavy emphasis on law being one of “the learned professions”, with a strong service ideal, as one of the main justifications for substantial self-regulation.68 These are claims that mechanics, panel beaters and dry cleaners seldom make: such persons have a purely commercial relationship with their customers.
5.74 Second, the nature of the legal file kept by the solicitor is clearly distinguishable from other types of personal property or chattels - the file often will contain instruments which regulate legal rights and obligations between parties (such as contracts and wills), and material of a personal, perhaps confidential, nature which the client regards as belonging in essence to himself or herself, as well as containing some of the lawyer’s own research and analysis. Third, the withholding of property by a repairer may cause inconvenience to a greater or lesser degree, a solicitor’s lien may prevent a person from properly vindicating his or her legal rights in a court of law. It is commonly known that solicitors’ liens also cause problems with the prosecution of appeals.
5.75 In New South Wales, the Law Society recorded only seven complaints about “Liens” in the period between January 1990 and June 1992; however, many more complaints of this type may have been characterised under other headings, such as “Failure to transfer documents” (146 complaints), “Not complying with undertaking” (90) or “No communication” (164).69 No doubt there also are many other cases in which clients are upset at or confused about the imposition of a lien, but no formal complaint is lodged with Law Society.
5.76 The Victorian Lay Observer, Ms Jan King, has observed that the concept of the solicitor’s lien is completely alien to most clients who encounter it; and that although complaints relating to liens are not large in number in Victoria, the issues are often significant, perhaps affecting the viability of a small business which is unable to recover through litigation moneys owed to it.70
5.77 The Law Society is correct to observe that a solicitor’s bill may be taxed and a lien may be overcome through an action initiated by the client in the Supreme Court,71 but it is also correct to note the concerns about the delay, cost and complexity of these procedures. Just above, the Commission endorses the moves towards the prevention of, and faster and more simple methods of resolving, fee disputes between lawyers and their clients. This will remove some of the sting from solicitors’ liens but it will not eliminate all of the problems and concerns we have expressed. Most plainly, the lien sits very badly with the profession’s own service ideal.
5.78 Consequently, the Commission recommends the abolition of solicitors’ liens forthwith. No doubt solicitors will be able to develop methods short of civil litigation to protect their genuine interest in being paid for the fair value of their work, such as through mediation, or the lodgement of a guarantee with a court or tribunal, or the giving of an appropriate undertaking by the new solicitor who has taken over the file.
Clarification regarding “complaints” and “complainants”
Commentary (Recommendation 72)
5.79 Both professional associations made representations to the Commission that some of the terminology used in the Legal Profession Act 1987 was confusing and caused problems in practice. The original letter or form making allegations of unsatisfactory professional conduct or professional misconduct which starts off the investigation process is referred to as the “complaint” in s 130, and the person making the allegations is the “complainant”. However, where a Council decides to refer a matter or matters to the Standards Board or the Disciplinary Tribunal under s 134, the referred brief is also referred to as the “complaint”, even though the Council’s sensibly have developed the practice of aggregating a number of original complaints or parts of complaints, adding material produced in the course of the investigation and, perhaps, expressing a number of its own concerns. Given that it is the Council which sends the “complaint” for hearing and prosecutes the matter, the Council may fairly be referred to as the “complainant” as well. Further confusion is then caused where the Board or Tribunal awards compensation to the “complainant” - which could mean that it is a matter for the Council to seek to enforce the order at a later time, rather than the original complainant.
5.80 In its submission, the Bar Association pointed out some recent decisions of the Board and Tribunal state that the only “complaint” that can be referred for hearing is the original letter or form under s 130(2) and “it is not correct or appropriate for the Bar Council to break up or itemise different matters arising out of one letter of complaint or dismissing some and referring others.”72 This causes obvious difficulties since the post-investigation brief, drawn by lawyers, is the more appropriate document to base hearings around, and the original letter of complaint may list a number of unrelated allegations.
5.81 The Commission agrees with the Bar Association that it is appropriate for the Councils (and the Legal Services Ombudsman) to formulate and file with the Legal Services Tribunal a document that distils and itemises the particulars of the complaint, based on the original allegations and the material disclosed in the course of the investigation, and having regard to the statutory heads of misconduct.73 This provides a proper basis for the hearing, which must be in everyone’s interests, including those of the respondent practitioner, who can clearly ascertain what charges must be defended.
5.82 Accordingly, the Commission recommends that, in the Legal Profession Act 1987, all references to “complaint” should be to the original letter or form (and any supporting material) from the client or other person which initiates the complaints handling process, and all references to “complainant” should be to that initiating party. Where a professional Council or the Legal Services Ombudsman decides to (or is directed by the Conduct Review Panel to) refer a matter to the Legal Services Tribunal for a hearing, the document which is filed with the Tribunal containing the itemised “charges” and particulars should be referred to as the “information”, and the authority which files the document and will prosecute the matter (the Council or the Ombudsman) before the Tribunal should be referred to as the “informant”.
5.83 The use of this terminology and procedure should avoid any further confusion and allow for proper hearings. It meets the Bar Association’s concern that “the private right of a complainant” not be confused with “the public and protective nature of disciplinary proceedings”,74 and accords with the simplified terms and procedures for originating process and hearings in the Local Courts recommended by the Justices Act Review.75
Where the person complained about is no longer a practitioner
Commentary (Recommendation 73)
5.84 Under the Legal Profession Act 1987, the disciplinary provisions of Part X apply to a person against whom a complaint about professional conduct has been made, even if the person is longer a legal practitioner.76 The Commission believes that this should continue to be the position.
5.85 With the exception of judicial officers,77 it is generally the case that a professional cannot escape disciplinary proceedings by voluntarily removing himself or herself from the roll of practitioners. This would deprive the disciplinary tribunal of the opportunity to consider the person’s fitness to practice, which may have future relevance, and to determine whether any compensation should be awarded to the complainant.
5.86 In NSW, complaints against doctors and other health care professionals may be proceeded with notwithstanding the fact that the person complained about has ceased to practice.78 In the United Kingdom, legislation in 1990 confirmed that the Solicitors Disciplinary Tribunal has jurisdiction over former solicitors.79
Clarification of transitional provisions
Commentary (Recommendation 74)
5.87 In DP 26, the Commission noted that the transitional provisions of the Legal Profession Act 1987 were somewhat unclear in relation to complaints about the conduct of legal practitioners which occurred before the entry into force of the Act (in January 1988). As a matter of practice, complaints which raise issues going to professional misconduct are being dealt with, since this was recognised prior to the Act by both the common law and the earlier legislation. However, the new lesser category of unsatisfactory professional misconduct was not expressly covered by earlier law, and there is less certainty about what to do with these complaints now. The Legal Profession Transitional Regulation 1987 appears to relate only to conduct which would constitute professional misconduct.80
5.88 This is not a major issue, as the number of complaints based on pre-1988 conduct is now small81 and will diminish further as times goes by, and in any event the Commission has recommended a general limitation period of six years (Recommendation 12). However, it is likely that there still will be a few such complaints made in the next few years, and the legislative position should be clear. In DP 26, the Commission proposed that, subject to any general limitation period, complaints about pre-1988 conduct should be able to be dealt with by the disciplinary system.82
5.89 This issue was not widely discussed in the submissions, but the Registrar of the Disciplinary Tribunal, Mr Robert Bennett, agreed that this area needed clarification. The NSW Bar Association disagreed with the Commission’s proposal, submitting that it called for “retrospective legislation [which] is almost always unfair, per se”.83
5.90 With respect, it was the position before the Act that substandard professional conduct - such as poor communications, negligence, delay, discourtesy and so on - could be complained about. Indeed, as the Commission discovered in its earlier inquiry into the regulation of the legal profession, complaints about such matters comprised the overwhelming proportion of all complaints against lawyers before the 1987 - and they still do. While a legal practitioner was unlikely to be severely sanctioned for such conduct, it was recognised by the professional associations that such conduct could warrant a reprimand or other action, and practitioners were, or should have been, aware that such conduct was unacceptable.
5.91 In 1979, the Law Society Council issued a Special Bulletin alerting members that “professional misconduct is not constrained within any legal definition of wrong-doing; it is enough that such conduct amount to grave impropriety affecting a practitioner’s professional character and be indicative of a failure either to understand or to practice the precepts of honesty and fair dealing in relation to his clients”. The Council specifically reminded solicitors that “culpable irresponsibility”, “gross negligence” or “serious failure to attend to the matter promptly or to keep the client informed on significant developments and progress” could be referred for disciplinary action.
5.92 In the circumstances, the Commission believes that its recommendation amounts to a clarification of the transitional position rather than new or retrospective law. Those few prospective complainants who are not otherwise caught by the recommended general limitation period of six years should not be denied an opportunity for a hearing and a remedy. Lawyers are already required under the Act to defend allegations about pre-1988 activities which may amount to professional misconduct; it is not unfair to ask them to explain as well pre-1988 activities which may amount to unsatisfactory professional conduct, given that the conduct in question also would have been unacceptable by the standards of the time.
Reciprocal discipline
75. Legal practitioners in New South Wales should be under an obligation to inform the relevant professional Council of any disciplinary action taken against them in another jurisdiction or of any criminal conviction. Arrangements should be made between the various states and territories of Australia to inform all jurisdictions of any criminal conviction or disciplinary order made in respect of any legal practitioner, or any action taken by a professional Council or other body which affects a person’s practising certificate or practising rights.
76. Any disciplinary order made in another Australian jurisdiction which removes the name of a person from the roll of legal practitioners, or which cancels, suspends, or places conditions upon a person’s practising certificate, automatically should be given effect in New South Wales by the relevant authorities in relation to that person’s rights of practice in this State.
77. The Legal Services Tribunal should have the power, upon application, to decline to give effect in New South Wales to a disciplinary order (of the kind referred to in Recommendation 76) made in another jurisdiction, on the grounds that having reviewed the record from the other jurisdiction the Tribunal is satisfied that:
- the procedures which led to the making of the disciplinary order constituted a denial of natural justice in the particular case;
- on the evidence, it would clearly be unsafe or unsatisfactory to allow the order to have effect in New South Wales;
- giving effect to the order would result in grave injustice; or
- the conduct in question warrants substantially different discipline in New South Wales.
Commentary (Recommendations 75-77)
5.93 Until fairly recently, there was little interstate mobility among Australian lawyers. Almost all practitioners worked in the same state in which that they received their initial legal qualifications, and very few law firms had branches which crossed state or territory boundaries.84 This position has changed markedly in recent years, however. It is now the case that all of the leading firms of solicitors have offices in most capital cities (as well as overseas), with partners admitted in all jurisdictions.85 Many NSW barristers also are briefed to handle matters interstate on a regular or, at least, occasional basis.
5.94 Thus, it is now important in practice as well as in theory to provide for reciprocal notification and enforcement of disciplinary action taken against legal practitioners. The American Bar Association has commented that:
If a lawyer suspended or disbarred in one jurisdiction is also admitted in another jurisdiction and no action can be taken against the lawyer until a new disciplinary proceeding is instituted, tried and concluded, the public in the second jurisdiction is left unprotected against a lawyer who has been ... determined to be unfit. Any procedure which so exposes innocent clients to harm cannot be justified. The spectacle of a lawyer disbarred in one jurisdiction yet permitted to practice elsewhere exposes the profession to criticism and undermines public confidence in the administration of justice.86
5.95 The Commission agrees with this assessment, and has recommended that there be an express obligation placed upon legal practitioners (and former practitioners) to be candid with the authorities in disclosing any disciplinary action taken against them as well as any criminal conviction (which may affect their fitness to practice). As well, the Commission recommends that a mechanism be put in place to ensure that all States and Territories receive notification of any disciplinary order or any action taken by a professional Council or other body which affects a person’s practising certificate or practising rights.
5.96 The current practice in NSW is for the Registrar of the Legal Profession Disciplinary Tribunal to forward a copy of each judgment of, and the orders made by, the Standards Board and the Disciplinary Tribunal to the Prothonotary. A file is created in the Supreme Court for the practitioner concerned and the details of the matter are noted. In those cases in which a legal practitioner has been struck off the roll, a notice of this event is sent by the Prothonotary to the Chief Judge of the District Court, the Chief Magistrate, the Registrar General, and the Sheriff in NSW, as well as the Registry of the Supreme Court in every other Australian State and Territory.
5.97 It is not the case at present, however, that any widespread action or notification takes place when a legal practitioner’s practising certificate is cancelled or suspended, or has conditions placed upon it. Consequently, the situation could arise where, following a disciplinary order or the decision of a professional Council, a legal practitioner effectively has lost the right to practice for a proscribed or indefinite period in another state, but may continue to practice in NSW. Similarly, a practitioner may have a condition imposed on the practising certificate in another state by a disciplinary tribunal or a professional Council which, for example, prohibits the person from accepting instructions in (say) family law matters. Absent reciprocal recognition of this condition, the practitioner would be at liberty to practice contrary to this condition in NSW, contrary to the public interest.
5.98 In Recommendation 76, the Commission proposes that orders or actions in other Australian jurisdictions affecting rights of practice - the striking off of a name from the roll of practitioners, or the cancellation, suspension, or imposition of a condition upon, a practising certificate - automatically ought to be given effect by the appropriate authority in NSW.87 Other disciplinary orders made interstate - reprimands, fines and so on - should be noted in NSW but there is no need for enforcement in this state. The recommended scheme assumes the correctness and conclusiveness of the interstate action or order, and obviates the need for repeating the whole process in NSW.
5.99 In order to ensure that the legal practitioner is accorded natural justice, however, the Commission also recommends that he or she should be entitled to the opportunity to satisfy the Legal Services Tribunal (and ultimately the Supreme Court, on appeal) that effect should not be given to the disciplinary order or action in NSW for one of four specified reasons: (1) the procedures used in respect of the original order or action constituted a breach of natural justice; or (2) the evidence available manifestly did not justify the making of the disciplinary order or the action taken in respect of the person’s practising certificate; or (3) enforcement of the order in NSW would result in a grave injustice to the practitioner concerned; or (4) a substantially different sanction would have been applied in NSW. The onus of satisfying the Tribunal would lie upon the applicant practitioner, and the hearing should be limited to a review of the record of proceedings from the other jurisdiction.
FOOTNOTES
1. The Client Care program is established pursuant to Rule 15 of the Law Society of England and Wales. See DP 26, at paras 3.129-3.130, and 4.89-4.91.
2. On 28 October 1992, entitled “Communicating with Your Client & Client Care”, presented by Mr Fred Smith of the Law Society’s Professional Standards Department.
3. F Riley New South Wales Solicitors Manual: A Commentary on the Law and Practice Relating to the Profession of the Solicitor in New South Wales. (Hereafter, “Riley”.)
4. Law Society submission of 31 July 1992, at paras 3.5 and 7.18. The Commission just has learned that the Law Society Council has approved the publication of a draft code of ethics at its meeting of 17 December 1992: see Caveat No 118, 21 December 1992. Submissions are called for by 31 March 1993.
5. B Maley “Professionalism and professional ethics”, in D Edgar (ed) Social Change in Australia (1974) 397.
6. DP 26, at para 4.86.
7. Submission of 19 May 1992.
8. See D Weisbrot Australian Lawyers (1990) Ch 7.
9. The Ethnic Affairs Commission of New South Wales sponsored a “Cross-Cultural Issues in the Law Symposium” on 28 July 1992, focussing on criminal law. (Professor David Weisbrot, of the Law Reform Commission, was a member of the “reference group” which planned and organised the event.) The background paper for the Symposium, prepared by Dr Janet Chan, highlighted issues relating to “professional responsibility and cultural awareness”, at 22-27. See also the Australian Law Reform Commission Multiculturalism and the Law (Report No 57, 1992).
10. Victoria. Law Reform Commission Access to the law: Accountability of the Legal Profession (Report No 48, 1992) (hereafter, “VLRC 48”) at 40, Recommendation 11.
11. VLRC 48, at para 49.
12. DP 26, at para 4.99.
13. See Recommendation 40 and the accompanying commentary in Chapter 4, above.
14. DP 26, at para 4.101.
15. DP 26, at paras 4.93-4.95.
16. DP 26, at para 4.98.
17. Bar Association submission of 31 July 1992, at 14.
18. DP 26, at para 4.83.
19. Law Society of New South Wales The legal profession disciplinary process: Trends and statistics (October 1992). (Hereafter, “Law Society Trends and Statistics”.)
20. The Digest, which commenced in 1992, is to be published six times annually.
21. Section 67(3)(d)-(e).
22. Such as conveyancing companies.
23. See ss 67(3)(c) and 168, regarding the funding of costs incurred in enforcing Parts 9 and 10 of the Act.
24. The Law Society also maintains another special trust fund, known as the Law Society’s Solicitors Trust Accounts Fund, which accrues the interest income on residual funds held in solicitors’ trust accounts. The trustees of this Account are the President and Treasurer of the Law Society and a nominee of the Attorney General. The fund is applied to purposes similar to those of the statutory interest account. See DP 26, at para 4.105.
25. Section 67(3)-(4).
26. Section 67(2)(b).
27. DP 26, at para 4.108.
28. DP 26, at para 4.106.
29. ABA Report, at 50.
30. American Bar Association Standing Committee on Professional Discipline Model Rules for Lawyer Disciplinary Enforcement (1989) r 8. (Hereafter, “ABA Model Rules”.)
31. ABA Model Rules, commentary at 17.
32. ABA Model Rules, commentary at 18.
33. Submission of 10 August 1992, at 3.
34. Submission of 11 August 1992, at 5.
35. Submission of 23 December 1991, at para 9.
36. Submission of 31 July 1992, at para 7.20.
37. Submission of 31 July 1992, at 16-17.
38. DP 26, at para 4.113.
39. Law Society of New South Wales Annual Report 1992 at 40.
40. The ABA Model Rules, r 8 on “Periodic Assessment of Lawyers”, proposes two rates, with the higher rate coming in for a lawyer after five years from the date of his or her admission to practice. Most American jurisdictions have fee waiver programs for lawyers who can demonstrate hardship.
41. The Commission’s budget for the two most recent financial years has been $992,000 per annum, which covers offices in the Sydney CBD, all salaries for Commissioners and about a dozen professional and support staff, and other associated library, equipment, publication and office expenses.
42. DP 26, at para 4.79.
43. ABA Model Rules, rr 16-17.
44. ABA Model Rules, at 33.
45. At para 2.81.
46. See eg NSW Bar Association Rules, rr 39 and 52.
47. See Part 11 of the Act.
48. For example, the Law Society received 104 complaints about “overcharging” in 1990, 102 in 1991, and 73 in the first six months of 1992. Further, other fee disputes may be categorised under other headings, such as “No communications”, “Liens”, and “Failure to transfer documents”.
49. Legal Profession Act 1987, s 198.
50.. Section 208.
51. Sections 199-206.
52. See the Supreme Court Rules, Part 52, r56.
53. At para 4.117.
54. See Weisbrot, at 216-222, regarding the regulation of legal fees and costs, including taxation of bills of costs (at 221).
55. The South Australian Government also recently recommended the establishment of an extra-judicial procedure which would allow clients to obtain “a quick and informed decision as to whether the charge was reasonable.” See A White Paper: The Legal Profession (August 1992) at 25:
56. At paras 4.120-4.121.
57. See (1991) 5 Law Society’s Gazette 6. See the discussion of the Client Care system in Chapter 3.
58. Letter of 14 August 1992, at p5, from the Director General. The submissions of the Bar Association and the Combined Community Legal Centres Group also supported these propositions. The Law Society’s submission did not address these issues.
59. See Barratt v Gough-Thomas [1950] 2 All ER 1048, at 1053. See Riley, at paras 2506 et seq, for a good discussion of general and particular solicitors’ liens.
60. See s 208(1)(b).
61. ACA submission of 23 December 1991, at para 8.
62. Community Legal Centres submission of 28 February 1992, at 2.
63. At para 4.128.
64. At para 4.129.
65. Kingsford Legal Centre submission, 11 August 1992, at 6-7.
66. Law Society submission of 31 July 1992, at para 7.21.
67. See the discussion of this point in Weisbrot, at 4, 9, 16, 30, 196-198 and 215.
68. See eg the Law Society submission of 31 July 1992, at para 2.1.
69. Law Society Trends and Statistics, at Table 1.
70. Interviewed on ABC Radio National’s The Law Report No 165, 10 March 1992.
71. Under the Legal Profession Act 1987 s 208.
72. Bar Association submission of 31 July 1992, at 25.
73. Bar Association submission of 31 July 1992, at 25-26.
74. Bar Association submission of 31 July 1992, at 25.
75. Justices Act Review Steering Committee Report of the Justices Act Review Steering Committee (1992) Part I. Professor David Weisbrot, of the Commission, served as a member of the Steering Committee.
76. Section 124.
77. Judicial Officers Act 1986 (NSW) s 20(1)(g) provides that the Judicial Commission shall dismiss a complaint if “the person complained about is no longer a judicial officer”.
78. See the Medical Practitioners Act 1938 (NSW) s 28(6); Cf the Health Care Complaints Bill 1992 (NSW) cl 19(3).
79. Courts and Legal Services Act 1990 (UK) s 92, which amends s 47(1)(c) of the Solicitors Act 1974 (UK).
80. Clauses 9-10.
81. See DP 26, at para 4.132.
82. DP 26, at para 4.132.
83. NSW Bar Association submission, 31 July 1992, at p21.
84. See Weisbrot, at 61, 65-66 and 139.
85. Weisbrot, at 259-264 and 269-270.
86. ABA Model Rules, commentary accompanying r 22, at p45.
87. The Supreme Court, in relation to striking off the roll, and the Law Society or Bar Council in relation to practising certificates.
