5.1 This Chapter deals with the options available to the Legal Services Commissioner (LSC), the Bar Council and the Law Society Council (the Councils) once an investigation into a complaint has been carried out. The next Chapter deals with the options available to the Legal Services Division of the Administrative Decisions Tribunal (the Tribunal).
TEST FOR REFERRAL TO THE TRIBUNAL
5.2 After completing an investigation into a complaint, the LSC or relevant Council must institute proceedings in the Tribunal, if satisfied that there is a reasonable likelihood that the practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.1 In Murray v Legal Services Commissioner,2 Sheller JA commented that this test imposes a duty on the Council or LSC to attempt to predict the outcome of a hearing in the Tribunal.3
5.3 Like committal hearings in criminal proceedings, this aspect of the complaints process has a number of purposes. The process acts as a filter to ensure that insubstantial complaints do not proceed to the Tribunal for hearing. This saves resources as well as providing a level of protection to practitioners. The process is also closely linked to procedural fairness under the complaints system.4
5.4 In its preliminary submission to this review, the Office of the Legal Services Commissioner (OLSC) criticised the test for referral of complaints to the Tribunal.5 The OLSC submitted that in attempting to assess what the Tribunal may decide, the LSC relies heavily on the Tribunal’s previous decisions in relation to particular issues. Therefore, it was submitted, it is difficult to determine whether there is a “reasonable likelihood” that the Tribunal will find a practitioner guilty of misconduct where the matter involves new issues that have not previously been determined by the Tribunal.
5.5 The OLSC submitted that the test for referral to the Tribunal is also problematic when a complaint comes down to a conflict in evidence between the complainant and the practitioner. The OLSC noted that often a complaint depends on the respective credibility of the parties and observed that in such cases, without the ability to test the evidence, these complaints are usually dismissed rather than referred to the Tribunal.
5.6 The OLSC submitted that the test for referral to the Tribunal is too onerous. It was argued that an appropriate test would be whether or not the evidence establishes a “case to answer” against the practitioner, which is the test used by analogous prosecuting bodies.6 The Bar Association also submitted that there is a need to consider whether there should be a statutory test for determining how complaints should be dealt with and whether the current test for referral to the Tribunal is appropriate.7
Issue 26
Should Part 10 of the Legal Profession Act 1987 (NSW) prescribe a test for referral of complaints to the Tribunal? If so, is the current “reasonable likelihood” test appropriate? If not, what should the test for referral to the Tribunal be?
ENFORCEABLE UNDERTAKINGS
5.7 The OLSC submitted that the resolution of many consumer or conduct complaints by the Councils and the LSC involves the practitioner agreeing to take specific steps, such as transferring a file or lodging court documents.8 It was argued that there should be an effective mechanism for the enforcement of such agreements.
5.8 Section 87B of the Trade Practices Act 1974 (Cth) provides that the Australian Competition and Consumer Commission (ACCC) may accept a written undertaking in connection with its functions. The undertaking may only be varied or withdrawn with the consent of the ACCC. If the ACCC considers that the terms of an undertaking have been breached, it can apply for a court order requiring compliance or compensation. The OLSC suggested this provision as a model for an enforceable undertakings power that could be used for the LSC and the Councils in dealing with complaints against lawyers.
COMPENSATION
5.9 The LSC and Councils do not have any enforceable power to order practitioners to pay compensation to complainants. Compensation orders may be made as part of the mediation of consumer disputes,9 or by the Tribunal.10 The OLSC criticised the current provision for the award of compensation to complainants under Part 10.11 It was argued that the Tribunal’s powers to make compensation orders are inadequate.12
5.10 The other option for a complainant seeking compensation are to bring civil proceedings against the practitioner, either in a court or in the Consumer Claims Tribunal, or to apply to the Fidelity Fund. The OLSC argued that these options are inadequate in terms of cost and complexity. The OLSC also argued that complainants are often reluctant to pursue compensation claims through the legal system as they have lost faith in the legal profession, and perceive that it is not possible to sue a lawyer successfully.
5.11 The OLSC submitted that consideration should be given to empowering the LSC to order practitioners to pay compensation to complainants. The Commission notes that the powers of the Tribunal to make compensation orders are restricted – the Tribunal can only award compensation if it finds the practitioner guilty of misconduct; there is a statutory maximum of $10,000 of compensation; and a compensation order cannot be made if the complainant has or is entitled to receive other compensation.13 If the LSC was empowered to make compensation orders, it may be appropriate to impose similar restrictions. In addition, it may be desirable to provide a review process for compensation orders made by the LSC.
5.12 Legal practitioners in New South Wales are required to hold an approved indemnity insurance policy.14 Compulsory professional insurance relates to professional negligence and does not cover compensation orders made under Part 10 of the Legal Profession Act 1987 (NSW). One submission argued that it is preferable that complainants should be compensated by way of civil negligence actions since insurance, which covers practitioners for liability for professional negligence, is compulsory.15
Issue 28
Should the LSC be given a power to order practitioners to pay compensation to complainants?
If so, should there be a statutory maximum amount?
If so, what should it be? What other restrictions on such a power would be appropriate?
REPRIMANDS
5.13 Part 10 gives the LSC and Councils the power to reprimand practitioners in certain circumstances.16 Reprimands can only be issued where the LSC or relevant Council, after completing an investigation into a complaint, is satisfied that there is a reasonable likelihood that the practitioner will be found guilty of unsatisfactory professional conduct, but not professional misconduct. The practitioner must consent to the reprimand.
5.14 The Law Society submitted that this power should be enhanced.17 It was argued that the LSC and Councils should be given the power to impose reprimands on practitioners without consent and that this power should apply to instances of professional misconduct of a “less substantial nature”.
COSTS ASSESSMENT
5.15 The LSC and Councils can refer complaints for costs assessment.18 Costs assessment is regulated by Part 11 of the Legal Profession Act 1987 (NSW).19 Under Part 11, applications for costs assessment must be made within 12 months after the bill was given to the complainant.20 The OLSC submitted that the time limit should not apply to matters referred to costs assessors by the LSC or the Councils.21
5.16 There is no provision in Part 10 for the LSC to refer a complaint to a costs assessor when the LSC is reviewing the decision of a Council.22 This means that in order to refer a complaint to a costs assessor during a review, the LSC must first re-investigate the complaint. The OLSC submitted that separate provision should be made for referral of complaints to costs assessors as part of a review.23
5.17 Under Part 11, legal practitioners are required to disclose to clients an estimate of the likely costs of services provided, including revised disclosure of any significant increases in costs.24 The Commission received a number of other submissions in relation to legal costs.
5.18 The OLSC submitted that a substantial number of complaints it receives relate to the failure of practitioners to advise their clients of significant increases in estimated costs. It was argued that the costs disclosure regime should be more prescriptive, with compulsory revised estimates being required at specified stages of a matter, particularly in relation to litigation services.25 The OLSC also suggested that costs assessors should be required to disallow any costs which are more than 10% above the most recent costs estimate provided to the client.
5.19 Another submission criticised the costs assessment system, arguing that the remedies available to clients who are dissatisfied with a costs assessment are inadequate.26
5.20 Costs are regulated by Part 11 of the Legal Profession Act 1987 (NSW) and are therefore not within the Commission’s terms of reference.
CONCILIATION
5.21 The OLSC submitted that the LSC should be given a power to require the parties to a complaint to attend a compulsory conciliation conference.27 It was argued that this would enable the LSC to resolve disputes more efficiently. Section 92 of the Anti-Discrimination Act 1977 (NSW) is a model for a conciliation power. Under s 92, the President of the Anti-Discrimination Board can require the parties to a complaint to attend a conciliation conference and failure to comply is an offence.
FOOTNOTES
1. Legal Profession Act 1987 (NSW) s 155(2).
2. Murray v Legal Services Commissioner (1999) 46 NSWLR 224.
3. Murray v Legal Services Commissioner (1999) 46 NSWLR 224 at 247.
4. See para 4.52-4.60.
5. OLSC, Preliminary Submission at 9.
6. Note that the test in New South Wales for committing defendants charged with criminal offences to trial is whether the evidence is capable of satisfying a jury beyond reasonable doubt that the defendant has committed an indictable offence: Justices Act 1902 (NSW) s 41(2).
7. NSW Bar Association, Preliminary Submission 1 at para 27.
8. OLSC, Preliminary Submission at 16-17.
9. The mediation of consumer disputes is dealt with in the Legal Profession Act 1987 (NSW) Part 10 Div 4.
10. Legal Profession Act 1987 (NSW) s 171D.
11. OLSC, Preliminary Submission at 14-15.
12. See para 6.22-6.27.
13. Legal Profession Act 1987 (NSW) s 171D.
14. Legal Profession Act 1987 (NSW) s 38R (barristers) and s 41 (solicitors).
15. S Cuddy, Preliminary Submission at 6.
16. Legal Profession Act 1987 (NSW) s 155(3)(a).
17. Law Society of NSW, Preliminary Submission Issue 1.
18. Legal Profession Act 1987 (NSW) s 153.
19. See Legal Profession Act 1987 (NSW) Part 11, Division 6.
20. Legal Profession Act 1987 (NSW) s 199(2) and Legal Profession Regulation 1994 (NSW) cl 25.
21. OLSC, Preliminary Submission Appendix at item 11.
22. See Legal Profession Act 1987 (NSW) Part 10 Div 6.
23. OLSC, Preliminary Submission Appendix at item 12.
24. Legal Profession Act 1987 (NSW) s 175 and s 177.
25. OLSC, Preliminary Submission at 18.
26. W Lawrence, Preliminary Submission.
27. OLSC, Preliminary Submission at 17-18.
