RECOGNITION OF THE MULTIPLE AIMS OF THE LEGAL PROFESSION'S DISCIPLINARY SYSTEM

1. Part 10 of the Legal Profession Act 1987 should expressly recognise that the multiple aims of the disciplinary system are: (1) to redress the consumer complaints of users of legal services; (2) to ensure compliance by individual legal practitioners with the necessary standards of honesty, diligence and competence; and (3) to maintain the ethical and practice standards of the legal profession as a whole at a sufficiently high level.

2. Fulfilment of the multiple aims of the disciplinary system requires a comprehensive, integrated approach, which provides for: community education about the legal system and the role of lawyers; assistance for complainants to facilitate access to the complaints system; the prompt, thorough investigation of complaints; the diversion of appropriate matters for consensual dispute resolution; the formal hearing of allegations of unsatisfactory professional conduct and professional misconduct; a flexible range of sanctions and remedies which satisfy the needs of complainants and the public interest in effective discipline; and education, counselling, and other assistance programs for lawyers.

THE LEGAL SERVICES OMBUDSMAN

3. An office of Legal Services Ombudsman should be established as an independent, statutory authority. The Legal Services Ombudsman should be appointed by the Governor in Council for a term not exceeding seven years, after which the person is eligible for reappointment.

4. It should be open to the Governor to appoint one or more persons (in the same manner) to the position of Deputy Legal Services Ombudsman if the workload of the office so requires.

5. The office should have a secretariat providing sufficient professional, support and technical services to discharge its statutory responsibilities promptly and effectively in the public interest.

6. A person is qualified to be appointed as the Legal Services Ombudsman if he or she is a person who is broadly familiar with the nature of the legal system and legal practice and possesses sufficient qualities of independence, fairness and integrity. The Legal Services Ombudsman need not be legally qualified, nor should legal qualifications or experience be a disqualifying factor; however, in the event of the appointment of a non-lawyer, legal advice should be available within the office.

7. The functions of the Legal Services Ombudsman should be to:
• handle the initial intake of all complaints against legal practitioners - including non-lawyers who offer legal services, such as conveyancers;
• provide complainants and potential complainants with the appropriate level of advice and assistance about making complaints or pursuing other avenues and remedies;
• regularly monitor sources of public information, such as news and current affairs reports and court decisions, which may contain information about the conduct of legal practitioners;
• Investigate directly complaints made against lawyers who currently serve or have recently served on one of the professional Councils or are otherwise associated with a Council or the complaints handling process, as well as those complaints which the Ombudsman believes should be handled directly in the interests of justice and public confidence;
• refer all other complaints to the relevant professional Council for investigation (such reference may contain a recommendation to investigate, divert to mediation, or both);
• commence an investigation or refer a matter to one of the professional Councils on his or her own initiative, such as where allegations have been aired publicly;
• prosecute disciplinary matters before the Tribunal, following an investigation or upon the request of the Conduct Review Panel or a professional Council;
• be responsible for community education about the regulation and discipline of the legal profession;
• assume a general duty to assist in the enhancement of professional ethics and standards, through liaison with institutions which provide training and education for service providers, as well as through direct efforts, such as by sponsoring research, publishing, and holding seminars and workshops; and
• report annually to Parliament through the Attorney General, and at least semi-annually to the professional Councils.

8. In the proper discharge of the functions of the office, the Legal Services Ombudsman should be entitled to:
• have access, on a confidential basis, to all of the files and other records kept by the professional associations in relation to the assessment and investigation of complaints against lawyers and the disciplinary system generally;
• have sufficient powers to conduct its investigations effectively, including the same powers available to the professional Councils in this respect;
• have the power to dismiss a complaint after investigation, on the same bases available to the professional Councils in this respect;
• attend and participate in any meeting of the professional Councils (or their committees) considering complaints;
• attend the hearings of the Legal Services Tribunal as an observer;
• attend any dispute resolution (mediation or conciliation) conference as an observer; and
• protection from all liability for anything done in good faith in the course of executing his or her statutory responsibilities.

9. The Legal Services Ombudsman may, in the exercise of his or her discretion, take over the conduct of the investigation of a complaint which has been referred to one of the professional Councils, where the interests of justice so require. In such a case, the Legal Services Ombudsman should be entitled to uplift the file and any other relevant material from the Council.

10. The Legal Services Ombudsman should, on a regular basis, conduct surveys of the views and levels of satisfaction of complainants and respondent lawyers with the complaints handling system. Such surveys should be published in the Legal Services Ombudsman’s Annual Report.

THE POSITION OF COMPLAINANTS

11. It should be open to any person to make a complaint alleging that a provider of legal services is guilty of conduct that may constitute unsatisfactory professional conduct or professional misconduct.

12. The lodgment of complaints should be subject to a limitation period of six years from the time of the conduct which is the subject of the complaint. It should be open to a complainant to seek leave from the Legal Services Tribunal to pursue a complaint outside the time limit, where the matter involves a question of professional misconduct.

13. A “Complainants’ Charter of Rights”, having statutory force, should be inserted into the Legal Profession Act 1987, in order to clarify the position of complainants (and respondent lawyers) and to emphasise the fairness and integrity of the system.

14. The Charter should provide that:

• Complainants are entitled to receive sufficient advice and assistance in order to prepare a complaint in writing in the prescribed form, and to understand the nature of their rights and responsibilities in the disciplinary process.
• Complainants are entitled to effective access to the office of Legal Services Ombudsman and other relevant institutions.
• Complainants - and respondent legal practitioners - are absolutely immune from civil suit for all communications made to the officers of the agency responsible for the handling of complaints, for all communications made to the various disciplinary bodies exercising direct or delegated statutory powers, and for all statements made within the disciplinary proceedings.
• Complainants must receive regular and adequate notice of the status of disciplinary proceedings at all stages of the proceedings. In general, a complainant should receive, contemporaneously, the same notices and orders the respondent receives as well as copies of the respondent’s communications to the agency, except information that is subject to another client’s privilege.
• Complainants must be permitted a reasonable opportunity to rebut statements of the respondent before a complaint is dismissed.
• Complainants must be notified in writing when a complaint has been dismissed (with or without a reprimand to the legal practitioner). The notice should include a concise recitation of the specific facts and reasoning upon which the decision to dismiss was made. The complainant should normally be given a copy of the investigator’s report, unless there are good reasons for not doing so in a particular case (such as problems of confidentiality).
• Complainants must be given proper notice of any disciplinary proceedings, and should have the right to attend any hearing. Complainants should have the right to appear as a party to the proceedings on the issue of compensation, and may appear as a party in respect of other matters with the leave of the Tribunal or Court, subject to the risk of costs.
• Complainants have the right to have the dismissal of a complaint or any other adverse decision reviewed by the Legal Services Conduct Review Panel.

DISPUTE RESOLUTION

15. If a complaint does not raise issues of unsatisfactory professional conduct or professional misconduct, but is capable of consensual resolution, it should be open to the Legal Services Ombudsman, the Law Society and Bar Councils, and the Conduct Review Panel to refer the matter for conciliation or mediation.

16. If a complaint does involve an issue (or issues) of unsatisfactory professional conduct or professional misconduct, but also involves a consumer dispute which is capable of consensual dispute resolution (such as where an apology or compensation is called for), it should be open to refer the latter aspect for mediation or conciliation, while the disciplinary aspect proceeds through the formal disciplinary system. In such cases, the dispute resolution process should not have to wait for the disciplinary proceedings to conclude.

17. The Law Society and Bar Councils should maintain a list of mediators for this purpose, in consultation with the Legal Services Ombudsman and the Director of the Community Justice Centres.

18. Mediators on the list maintained by the professional Councils should be obliged to undertake a specific training program. The training program, as well as a Code of Conduct for mediation between lawyer and client, should be developed by the professional Councils in consultation with the Director of the Community Justice Centres and the Legal Services Ombudsman.

19. All confidential communications which are part of the mediation or conciliation process should be privileged, except for admissions or communications which reveal irregularities or dishonesty by a legal practitioner in respect of trust accounts or controlled funds.

20. In the event that conciliation or mediation fails to resolve the dispute, the complainant may apply to the Registrar of the Legal Services Tribunal to have the matter resolved by arbitration. In such cases, the Registrar or his or her nominee may award compensation not exceeding $6,000.

THE ROLE OF THE PROFESSIONAL COUNCILS

21. The Councils of the Law Society and the Bar Association should continue to be responsible for: the investigation of complaint matters (those forwarded by the Legal Services Ombudsman, as well as those matters in which a Council acts on its own initiative); diverting consumer complaints for dispute resolution; dismissing appropriate complaints (with or without a reprimand); determining which matters should be sent to the Legal Services Tribunal for hearing; and prosecuting disciplinary offences before the Tribunal.

22. The Councils must ensure that the investigation of complaints is accomplished in a prompt, active, thorough and professional manner. Sufficient resources and training (for members of the Council and its committees as well as for staff) must be provided to make this possible. An obligation on the part of the Councils (and the Legal Services Ombudsman) to investigate and process complaints expeditiously should be inserted into the Legal Profession Act 1987.

23. In the event that a legal practitioner unreasonably fails to reply to the allegations made in the complaint or to respond to requests for information, it should be open to a Council (or the Legal Services Ombudsman) to apply to the Registrar of the Legal Services Tribunal for an administrative penalty of up to $2000 to be assessed against the practitioner. (Nothing in this Recommendation is meant to derogate from the power of a Council to suspend or cancel a practitioner’s practising certificate under s 35 of the Legal Profession Act 1987.)

24. The Councils should operate several Professional Conduct Committees (exercising delegated authority) in tandem, to speed up its handling of complaints, reduce the workload of individual Committee members, and increase the intensity of investigations.

25. The powers of a Council should be the same whether the investigation has arisen on the Council’s own initiative or following a complaint forwarded by the Legal Services Ombudsman.

26. Following an investigation into any complaint, a Council must refer a matter to the Legal Services Tribunal for a hearing if “it appears to the Council that (a) the legal practitioner may be guilty of unsatisfactory professional conduct or professional misconduct, or (b) the interests of justice so require”. (The same standard shall apply in respect of the investigations of the Legal Services Ombudsman.)

27. Following a referral by its Council to the Legal Services Tribunal, or upon the request of the Legal Services Ombudsman or the Legal Services Conduct Review Panel, the Law Society and the Bar Association should be responsible for preparing the information and prosecuting the matter before the Tribunal and the courts.

28. Where a Council has dismissed a complaint following investigation (with or without a finding of unsatisfactory professional conduct), it should nevertheless have the power to award compensation to the complainant with the consent of the legal practitioner, or to refer the matter for mediation (and ultimately arbitration) on the question of compensation, or to make an ex gratia award of compensation from a discretionary fund maintained by the professional Council for this purpose.

29. The Act should be clarified to ensure that the Councils must report on their activities to the Parliament through the Attorney General at least once per year. It should be standard practice for the Councils each to produce a detailed report at least once per year specifically dedicated to the regulation and discipline of the legal profession.

30. The present role of Councils in the setting of standards of professional ethics and conduct should continue.

THE LEGAL SERVICES TRIBUNAL

31. The Legal Profession Standards Board and the Legal Profession Disciplinary Tribunal should be combined to form a Legal Services Tribunal. The Tribunal would hear complaints involving issues of unsatisfactory professional conduct or professional misconduct, or both.

32. The Legal Services Tribunal (the “Tribunal”) should consist of: at least one judge, at least two barristers and two solicitors, and at least two lay persons, appointed by the Attorney General. The Attorney General should be able to appoint the barrister and solicitor members of the Tribunal without the need for a nomination from the relevant professional Council. One of the judicial members of the Tribunal should be appointed President of the Tribunal by the Attorney General.

33. The President of the Tribunal or his or her nominee should determine the membership of the Tribunal for the purposes of any particular hearing. The judicial member of the Tribunal should preside at the hearing, or in the absence of a judicial member, one of the barrister or solicitor members designated by the President or his or her nominee. The Tribunal should be comprised of equal numbers of independent members and barrister or solicitor members (depending upon whether the information concerns a barrister, a solicitor, or both), plus the presiding member, with a total of three or five members.

34. Hearings of the Tribunal should be conducted in public. The presiding member of the Tribunal may close, or limit the reporting of, the proceedings in those exceptional cases where the presence of the public would defeat the ends of justice. The determinations of the Tribunal should be put in writing, and should be published. (See Recommendation 67, below, regarding the special position of evidence related to privileged communications between client and lawyer.)

35. Having regard to the “protective” nature of the Tribunal’s jurisdiction, the Tribunal should be flexible in its procedures, the rules of evidence do not apply, and it may adopt an inquisitorial style.

36. Notwithstanding Recommendation 35, when conducting a hearing into an information involving a question of professional misconduct, the Tribunal should be bound by the rules of evidence.

37. Prior to the commencement of the proceedings, the legal practitioner involved should be obliged to file a Reply to the information (that is, to “plead”), in order to narrow the issues for hearing.

38. Subject to considerations of natural justice in each case, the Tribunal should have the power to deal with matters of professional conduct which arise in the course of proceedings and should be able to order the joinder of informations against two or more practitioners for hearing.

39. The Tribunal should have the same powers as the Supreme Court to discipline legal practitioners, as well as those powers which are specifically enumerated by statute.

40. The enumerated powers of the Tribunal, in the Legal Profession Act, in respect of a barrister or solicitor, should include the powers to:
• order that a person’s name be removed from the Supreme Court’s roll of practitioners;
• cancel, or suspend for any period, a person’s practising certificate;
• place conditions upon a person’s practising certificate, including, but limited to, conditions involving: supervision of the person’s work by another practitioner, requiring the person to cease to accept instructions in a specified class (or classes) of legal work, or further education;
• impose a fine of not more than $5,000 for a finding of unsatisfactory professional conduct, or not more than $50,000 for a finding of professional misconduct;
• issue a public reprimand, unless special circumstances require a private reprimand;
• order that the person undertake and successfully complete a specified course of further legal education;
• or to do any combination of those things.

41. The Act should continue to specify that in relation to a solicitor, the Tribunal also should have the powers in relation to the supervision or management of the practice which are enumerated in section 149(2)(c)-(g) of the Legal Profession Act 1987.

42. Where the Tribunal determines that, whatever the shortcomings of the individual solicitor or solicitors involved, the evidence indicates a systemic problem in relation to a firm of solicitors, the Tribunal should have the power to join the law firm as a party to the proceedings and then to make appropriate orders in relation to the internal systems of management and supervision of the firm, aimed at rectifying the problem.

43. The Tribunal should be free to make a compensatory order (of the kind now specified in s 149(3), but without a specified upper limit) against the legal practitioner where the complainant has suffered loss as a result of the practitioner’s conduct. Where such an order was not sought at the start of proceedings, the informant or the complainant may seek leave from the Tribunal to amend the information for this purpose. The Tribunal should be free to make a compensatory order without the consent of the legal practitioner involved.

44. The determinations of the Tribunal should be subject to judicial review only by the Court of Appeal. Appeal on matters of law should be as of right, but special leave should be required to appeal on matters of fact.

45. The Registrar of the Tribunal should have the power to arbitrate (or nominate an arbitrator) in relation to lawyer-client disputes which could not be settled by mediation, and to impose an administrative penalty of not more than $2,000 against a legal practitioner who unreasonably fails to provide information requested by one of the professional Councils or the Legal Services Ombudsman for the purposes of investigating a complaint.

EXTERNAL REVIEW

46. The Legal Profession Conduct Review Panel should be renamed the “Legal Services Conduct Review Panel” (the “Panel”) and should be empowered to review the handling of any complaint which has not been referred to the Tribunal for a hearing. Such a review should commence upon an application from the complainant; or upon the request of the Attorney General, the Legal Services Ombudsman or a professional Council; or on the Panel’s own motion.

47. The composition of the Panel should remain as provided in s 126 and Schedule 4 of the Legal Profession Act 1987, except that the Attorney General should be able to appoint the barrister and solicitor members without the need for nomination by the respective Council. It should continue to be the position that one of the independent members should be appointed Chairperson of the Panel by the Attorney General.

48. The appointment of all members of the Panel should follow a system of advertising, interviewing and selection on merit, in the manner normally associated with appointment to important public authorities.

49. The independent members of the Panel should normally be persons who are not practising lawyers. However, it should be open to the Attorney General to appoint a person who has legal qualifications so long as he or she does not hold a current practising certificate. The legislation should specify that the main requirements for appointment as an independent member of the Panel are that the person: (1) is independent of the legal profession, and (2) has sufficient experience and community standing to promote public confidence in the integrity of the system.

50. The independent members of the Panel should be entitled to receive a reasonable level of remuneration, having regard to the time commitment and complexity of the work involved, in order to attract and retain competent people.

51. The Panel should be allocated sufficient resources to ensure that it can carry out its functions promptly and effectively in the public interest. In particular, the Panel should have a sufficient budget to enable it to:

• establish a small, full-time secretariat, to facilitate the work of the part-time Panel;
• provide the necessary legal and technical advice and research to its members;
• make possible the active investigation or re-investigation of complaints in appropriate cases;
• conduct relatively informal hearings at which the parties may be heard; and
• organise training programs for its members, especially the independent members.

52. The Panel should be able to undertake a review upon an application from the complainant; or upon the request of the Attorney General, the Legal Services Ombudsman or a professional Council; or on the Panel’s own motion.

53. The Panel should be entitled to go beyond the file compiled by the professional Council or the Legal Services Ombudsman to conduct a thorough review of the complaint, which may involve further investigation or re-investigation, or asking the parties to appear before it. The Panel also should be able to ask that the Council or the Legal Services Ombudsman conduct further investigations into a complaint instead of or in addition to pursuing its own inquiries.

54. The Panel should be empowered to refer a matter back to a Council or to the Legal Services Ombudsman for further investigation, or to refer a matter directly to the Tribunal for a formal hearing, without the intervention of the Attorney General. Where the Panel refers a matter to the Tribunal for hearing, the Panel should nominate the Legal Services Ombudsman or the appropriate professional Council to prosecute the information.

55. The Panel should be empowered to refer a matter for dispute resolution (see also Recommendations 15 and 28) or to recommend the payment of compensation to a complainant in appropriate cases, from a discretionary fund maintained by the professional Councils for this purpose.

56. If the Panel upholds the decision of the Council or the Legal Services Ombudsman, it should provide the complainant with adequate reasons in writing for the Panel’s decision.

57. The Panel should be obliged to report annually to Parliament through the Attorney General, and at least semi-annually to the professional Councils and the Legal Services Ombudsman.

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.

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.

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.

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.

Solicitors’ liens

71. Solicitors’ liens should be abolished.

Clarification regarding “complaints” and “complainants”

72. The Legal Profession Act 1987 should be amended to clarify the following:

(a) The person or body who first comes forward to the Legal Services Ombudsman with allegations against a legal practitioner is the “complainant”.

(b) The letter and/or complaint form, and any supporting material attached, which is used to commence an investigation into the conduct of a legal practitioner is the “complaint”.

(c) Where a matter is referred to the Tribunal for a hearing, an “information” should be drawn and filed by the body which is prosecuting the matter, which itemises the particulars to be determined by the Tribunal. The prosecuting body is the “informant”.

(d) The informant may be the Legal Services Ombudsman, the Law Society, or the Bar Association, or with the leave of the Tribunal, the complainant.

Where the person complained about is no longer a practitioner

73. As is currently the position, a complaint or information about a legal practitioner should be able to be dealt with even though the practitioner no longer holds a current practising certificate or is no longer on the Supreme Court roll.

Clarification of transitional provisions

74. Schedule 8 of the Legal Profession Act 1987 should be amended to make clear that conduct which occurred prior to the entry into force of the Act may be dealt with by the complaints-handling system, subject to the general provisions on time limitations.

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.