LEGAL ETHICS IN EVERYDAY PRACTICE

Meaning of unsatisfactory professional conduct

Unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner

Meaning of professional misconduct

(1) Professional misconduct includes –

(a) unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence;

(b) conduct of an Australian legal practitioner, whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

FERGUSON – SEPTEMBER 2006

Facts

• Practitioner acted for vendor in sale of hotel.

• Held deposit in trust.

• Transaction handled by experienced law clerk.

• Deposit wrongly released to vendor without authorisation and prior to completion – but in honest belief that the parties had agreed to release of deposit.

FERGUSON

• Deficiency restored by practitioner when identified.

Outcome

• Finding of unsatisfactory professional conduct.

• $1,000.00 fine.

WATTS – OCTOBER 2007

Facts

• Delay – obtained judgment on behalf of client but failed to enforce that judgment for 10 months.

• In circumstances in which client owed fees –practitioner could have refused to do further work until the fees were paid – but did not do so.

WATTS

• Problems exacerbated by lack of available competent support staff – common problem in sole practice.

Outcome

• $1,500.00 fine.

• Public reprimand.

PENNISI – APRIL 2007

FactsCharge 1• Bookkeeper wrongly deposited $1,500.00

received on account of costs into general, rather than trust.

• That led to practitioner transferring $1,500.00 from trust to pay his account in the belief that funds were held in trust.

• Practitioner identified problem on review of bank reconciliation statement and instructed bookkeeper to fix the problem.

PENNISI

• Bookkeeper assured practitioner problem had been fixed and later reconciliation statements confirmed that.

• In fact, problem had not been fixed – came to light after bookkeeper had been dismissed for incompetence.

Charges 2 and 3

• Each related to clients being billed for unexpended outlay of $108.30.

• Titles Office lodgement fees included wrongly in account because purchaser clients’ mortgagees would be attending to registration.

PENNISI

• Errors made by conveyancing clerks.

• Accounting system did not identify problem –practitioner could only have done so by review of file.

• Practitioner’s problem was that he had earlier (2002) finding of professional misconduct for more serious trust account offences as a result of which the practitioner had been fined $10,000.00 and undertaken the trust accounting course.

PENNISI

• LSC sought suspension – even though offences were minor, involved no dishonesty and were the result of staff errors.

Outcome

• $1,500.00 fine.

• Public reprimand.

VOLL – SEPTEMBER 2008 (COURT OF APPEAL)

Facts

• Practitioner acting for clients claiming damages from builder in Queensland Building Tribunal.

• Hearing had been adjourned several times.

• Difficult clients – unwilling to sign client agreement and had not put practitioner in funds.

VOLL

• 6 September: Matter listed for hearing on 23-25 September. Practitioner writes to clients advising dates of hearing and requesting $10,000.00 on account – letter posted – usual delivery 2-4 days.

• 9 September: Phone call to client – may have advised hearing dates.

• 10 September: Client sends fax – says practitioner’s letter not received – requests letter be faxed because client will be in Sydney 12 September – 2 October.

VOLL

• 10 September: Practitioner sends another letter by post (not fax) enclosing earlier letter – advises clients will be required to appear – no further adjournments.

• 12 September: Clients leave for Sydney – had probably received 6 September letter but not read it carefully. 10 September letter not received.

VOLL

• 23 September: Practitioner appears in Tribunal without clients who were still in Sydney. Practitioner phones client at 10.06am – client says not aware of hearing and that it was impossible for him to return to Bundaberg.

VOLL

• Practitioner then informed Tribunal that client was “actually stranded in Sydney at this present moment waiting to get on his flight” – and so the matter could not proceed. Practitioner also said that the client had been trying to get back that morning and that he was expected by lunch time.

• 26 September: Claim struck out.

VOLL

Legal Practice Tribunal Findings• Failed to take adequate steps to inform client of

hearing.• Dishonestly misleading Building Tribunal – as a

result of which the Tribunal was unable to make a properly informed decision about how to proceed.

• The practitioner then failed to co-operate with the Society’s investigation, including failing to comply with statutory notices. As a result he was fined $5,000.00 (in separate proceedings). He also failed to attend to trust account audit and was reprimanded.

VOLL

Outcome

• $20,000.00 penalty.

• LSC’s appeal (seeking strike-off) dismissed –largely because of the way in which the appeal was conducted.

MACKERETH – MARCH 2008

Facts• Practitioner retained by defendant in matter

listed for hearing.• Practitioner then overlooked date of hearing and

was unprepared.• Practitioner falsely claimed he had not been

advised of hearing date and made application to vacate date of hearing.

• Practitioner forged affidavits by client claiming not to be aware of the hearing date and swore false affidavits that he (the practitioner) was unaware.

MACKERETH

• When application failed, practitioner swore further affidavit that clients were unavailable for trial – again false.

Outcome

• Struck off.

• Convicted of criminal offences (forgery, uttering, false statement on oath) – 12 months suspended sentence.

WALTERS – MAY 2007

FactsCharge 1

• Practitioner acted for husband in divorce application.

• Client signed application for divorce but that was then lost.

• Client was to re-marry and sought confirmation that divorce was final – in fact, no application had been filed.

• Practitioner forged client’s signature on application and then sought to expedite the divorce hearing.

• Wife recognised forgery and complained.

WALTERS

Charge 2

• Failed to progress claim re workplace accident.

• Practitioner believed no arguable case – but failed to advise client.

• Lied to client about progress of action.

Charges 3 and 4

• Two charges of delay in finalising matters.

Charges 5 and 6

• Two charges of delay in responding to QLS queries.

WALTERS

• Charges 1 and 2: “Go to the heart of a solicitor’s professional obligations to the court and to a client.”

• Charges 3 and 4: “Delay and neglect bring the profession into disrepute.”

• Charges 5 and 6: Failure to respond to the Society “is a substantial departure from professional standards”.

Outcome

• Struck off.

PROSSER – AUGUST 2008

Facts• Practitioner acted for plaintiff in litigation concerning

ownership of mining equipment.

• Client gave instructions to obtain an injunction restraining the defendant from dealing with the equipment.

• Practitioner advised client that application for injunction had been successful – in fact, nothing had been done.

• Practitioner typed a document purporting to be an injunction granted by the Supreme Court and cut and pasted a copy of the court seal on that document.

PROSSER

• Practitioner provided copy “order” to client.

• When contacted by the defendant’s solicitor, the practitioner represented that:

– The matter was completely her fault;

– She had acted foolishly on her client’s instructions;

– The order would be removed as if it had never happened;

– She had been contacted by the Judge and reprimanded and was required to provide a letter of apology to the defendant’s solicitor and to the court.

• In fact, those representations were false.

PROSSER

• There were also allegations of delay in the conduct of an unrelated matter as well as consenting to an order without instructions.

Outcome

• Struck off.

JAMESON – NOVEMBER 2006

Facts

• Practitioner also director of company which was defendant in civil proceedings.

• Practitioner fabricated letter which was then relied upon to defend the action.

Outcome

• Struck off.

• Criminal conviction – 12 months imprisonment (suspended after three months).

CHADWICK - AUGUST 2009

Facts

• On two occasions the solicitor created false letters, purported to be from his employers, in order to obtain personal financial gain.

• The documents were not used.

• The practitioner was unwell at the time and apologised for the behaviour.

CHADWICK

Outcome• Each instance of creating the letter was

professional misconduct.• Public reprimand.• Medical treatment ordered for five years.• Risk management plan was required to be

submitted to the LSC.• Guidance and mentoring was ordered.• Twice yearly external audits required for

12 months.

SORBAN - FEBRUARY 2009

Facts• Solicitor failed to check that a document

had in fact been sent before representing to his client that it had been sent to the financier's solicitors.

• A false email was then created and sent –this brought the integrity of the financier’s solicitor into question.

• The solicitor sent a letter of apology.

SORBAN

• There were no consequences for the financier as a result of the incident.

• The financier’s solicitor provided a letter of support regarding the integrity, professionalism and ability of the solicitor.

Outcome

• Finding of professional misconduct.

• Public reprimand.

• No pecuniary penalty.

WHERRY – SEPTEMBER 2009

Facts• Acted for plaintiff in speculative action over

four years.• Upon settlement the practitioner withdrew

money from the trust account without authority.

• Solicitor attempted to obtain more money from the client.

• Client obtained alternative representation.• Solicitor forged a trust account authority.

WHERRY

• Client’s new representative was presented with the forged authority.

• When challenged, the solicitor continued to urge the authenticity of the document.

• Pleaded guilty to the creation of the forged document in the Magistrates Court.

Outcome

• Professional misconduct.

• Struck off.

FARNHAM - FEBRUARY 2009

Facts

• Solicitor was a director and acted for a group of companies.

• On his solicitor’s letterhead sent an email giving written undertaking to be responsible for the balance of an account.

• The solicitor later denied the undertaking –stating it had been given in his capacity as a director.

FARNHAM

Outcome

• The breach of an undertaking was a serious breach of the standard of conduct of a solicitor.

• Professional misconduct.

• Public reprimand.

• $3000.00 fine.

GREGORY – MARCH 2009

Facts

• Solicitor gave an undertaking to the court whilst giving evidence as a witness in his personal capacity.

• Solicitor breached that undertaking.

• No loss or detriment was caused due to the breach.

• Solicitor also failed to respond to a notice given by QLS.

GREGORY

Outcome• Failure to respond to the QLS constituted

professional misconduct.• The breach of the undertaking was

unsatisfactory professional conduct.• Public Reprimand.• $1000.00 fine.• Undertake a practice management course.• Engage consultant to improve his legal

practice.• Undergo mentoring for 12 months.

CAIN – AUGUST 2009

Facts

Charge 1

• Practitioner failed to submit five income taxation returns and one GST return.

• No previous disciplinary findings against the practitioner.

• Efforts were made to repay the amount owed – a mortgage was executed in favour of the ATO for the debt owed.

CAIN

• No dishonesty – overwhelmed by personal and professional circumstances.

Charge 2

• Practitioner failed to reply to a section 443(3) notice from the LSC.

• No excuse was provided for the failure to respond.

CAIN

Outcome

• Cumulative effect of the failure to lodge returns was a finding of professional misconduct.

• Failure to comply with the notice was professional misconduct.

• Public reprimand.

• Prohibited from practising as a principal for three years.

• Ordered to accept mentoring and to undergo a psychologist’s treatment plan.

HEWLETT – APRIL 2008

Facts

• Failure to lodge tax returns for 11 years.

• Substantial tax was payable in only five of those years – and not in the earlier years.

• Attempts were made to settle with the ATO for an amount less than the total liability.

HEWLETT

Outcome

• Finding of professional misconduct.

• Level of character was found to fall short of that which would guarantee maintenance of the high standards of the profession.

• Struck off.

Cain and Hewlett compared:

Struck off.Publicly reprimanded.Sanction

NilProhibited from acting as principal

for three years. Mentoring and medical treatment ordered.

Other orders

No.Yes – failure to reply to section

443(3) notice.

Additional matters considered?

No – offers made to ATO for less than total liability. Declared

himself bankrupt.

Yes – including execution of a mortgage over his property in favour

of the ATO.

Repayment of

the monies in full?

Professional Misconduct.Professional Misconduct.Finding

Yes – acting without instructions and failure to comply with Trusts

Accounts Act.No.

Previous disciplinary

proceedings?

Eleven yearsFive yearsPeriod of non-compliance

HewlettCain

MULLINS - NOVEMBER 2006

Facts• Personal injury matter - plaintiff informed his

solicitor and barrister of his decreased life expectancy due to diagnosis of cancer.

• Settlement at mediation was based on the plaintiff’s life expectancy without taking cancer into account.

• Counsel concluded that there was no legal obligation to disclose the cancer diagnosis in the meditation - provided there was no positive assertion to the contrary.

MULLINS

Outcome

• Counsel’s failure to disclose the information was fraudulent deception.

• The deception constituted professional misconduct.

• Public reprimand.

• Penalty of $20,000.00.

GARRETT - MAY 2009

Facts• Mullins instructing solicitor.• Solicitor was experienced in personal

injuries litigation. • Counsel’s advice was sought as to

whether the cancer should be disclosed.• Counsel advised disclosure was not

required - provided the there was no positive assertion to the contrary in the mediation.

• Solicitor remained silent in the mediation.

GARRETT

Outcome

• The solicitor was not a passive recipient of counsel’s advice – he brought his own legal skill and knowledge.

• Remaining silent constituted fraudulent deception.

• The deception constituted professional misconduct – as in Mullins.

• Public reprimand – as in Mullins.

• Penalty of $15,000.00.

FORD - AUGUST 2008

Facts

• Practitioner took instruction regarding will and enduring power of attorney.

• Client had poor short term memory and dementia.

• No attempt was made to follow the QLS guidelines in relation to a solicitor acting as a witness to a power of attorney.

FORD

• Client’s impairment would have been obvious to someone following the guidelines.

• Practitioner failed to satisfy himself that the client understood the document.

• Comment was made by nursing staff to the solicitor regarding the mental state of the client.

• Client’s mental problems had been assessed as being apparent when she was spoken to for a length of time.

FORD

Outcome

• Solicitor’s attitude to the guidelines was criticised as “arrogant”.

• Finding of unsatisfactory professional conduct.

• Public reprimand.

PETSCHLER - OCTOBER 2009

Facts

• Five charges were presented to the Tribunal. These included:

– a failure to respond to the LSC;

– a failure to comply with a written notice;

– want of diligence; and

– a breach of the Trust Accounts Act.

• Between 1999 and 2008 the practitioner failed to take steps to progress a matter.

PETSCHLER

• Money was withdrawn from the trust account and paid into the general account without client consent.

• The practitioner took over nine months to respond to a LSC query.

• The practitioner confessed to “sticking his head in the sand”.

• There was no dishonesty in the breaches of the Trust Accounts Act – the breaches were due to ignorance.

PETSCHLER

• Practitioner was the principal of a small practice - one of only two solicitors in Charters Towers.

• No experienced support staff available in the area to assist in running the practice.

Outcome

• Finding of unsatisfactory professional

conduct for failing to respond to the LSC.

PETSCHLER

Outcome (contd)

• Professional misconduct in failing to advance the client’s matter and in failing to comply with a written notice.

• Trust Accounts Act contraventions were unprofessional conduct.

• Mentoring to be undertaken for 12 months.

• Public Reprimand.

• $2000.00 fine.

BEVAN – NOVEMBER 2009

Facts• Practitioner acted for purchaser of house

property.

• Vendors not notified of finance approval by due date.

• Practitioner failed to arrange for an extension.

• Vendors terminated contract.

• LSC alleged that practitioner made false file note recording instructions that finance not yet approved.

BEVAN

Outcome

• Tribunal was not satisfied that the practitioner had been told of the approval of the finance.

• Finding of unsatisfactory professional conduct in not requesting extension (admitted by practitioner).

• $2000.00 fine.