Lawyers, Ethics & Society 5125 Any questions? See also: ACCC v Sampson  FCA 1165 http://www.austlii.edu.au/au/cases/cth/FCA/2011/1165.html For interest only: Tichborne Claimant: http://en.wikipedia.org/wiki/Tichborne_case
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Where We Have Canvassed Wk 1: Introduction Wk 2: Admission to Practice Wk 3 Approaches to Ethics/Hierarchy of Duties Wk 4: Duty to Court Wk 5: Hierarchy of Duties Wk 6: Hierarchy of Duties (Cont) Wk 7: Conflict of Interest Wk 8: Conflict of interest (Cont) Wk 9: Costs Wk 10: Regulation of Profession Wk 11: Regulation/Competence/Professional Liability Wk 12: Revision NOW EXAM!
What is ‘Legal’ Ethics? • ‘Legal’ ethics is about assessing the moral value of our own conduct, and doing the right thing, as lawyers. • Sources of an individual lawyer’s ethics: • Personal values (family, background) • Professional standards (conduct rules) • E.g., LPA; CPA; PCPR; BR • Social ethics • E.g., Teleological or deontological theories
3 Steps in Ethical Reasoning • Awareness of ethical issues, interests and values • Application of ethical standards or principles • Practical implementation * ILE chapter 1 (pages 6 to 14)
Approaches to Ethics • Adversarial Advocacy • Advance client’s interests with maximum zeal permitted by the law • Predominant view of lawyers’ ethics • Responsible lawyering • Focus on lawyer’s role as officer of the court • Duty to maintain justice and integrity of the legal system, even against clients’ interests • Moral activism • Aim to do ‘good’ by own moral standards • Use the law to improve justice • Ethics of care • Focus on responsibilities to people, communities and relationships
Unauthorised Legal Work Legal Profession Act 2004 s.2.2.2(1) A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner. Penalty: Imprisonment for 2 years.
Summary of Admission Process • Pay money and fill out the right forms • Make full disclosures • Supreme Court decides if you are: • Eligible • 18; Qualified; Trained • Fit and Proper Person • May base decision on BoE recommendation • BoE must consider • Suitability matters • ‘Good fame and character’; criminal offences; insolvency; mental impairments • Disciplinary actions • Other relevant matters • Take oath or make affirmation
Suitability Matters: s.1.2.6 • Suitability matters include: • Being of ‘good fame and character’; • Having been found guilty of an offence or disciplinary action; • Being the subject of an unresolved complaint, investigation, charge or disciplinary action; • Having been involved in trust account misconduct; • Having been insolvent; and • Having a material mental impairment.
‘Good Fame and Character’ • Relevant matters include: • Criminal history • Ziems(1957) 97 CLR 279 • Political activity • Re B  2 NSWLR 372 • Dishonesty • Foreman (1994) 34 NSWLR 408 • Academic misconduct • Re OG a Lawyer  VSC 520 • Personal moral standards • Re Bell  QCA 151
Academic Misconduct* • Law SocTas v Richardson  TASSC9 • Law Society of South Australia v De Souza  SASC 316 • Re OG a Lawyer  VSC 520 • Re AJG  QCA 88 • Re Liveri QCA 152 • LPA s.2.3.3
Overarching Purpose s.7(1): The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. s.8: Courts must give effect to this purpose: • When they exercise their powers • When they interpret their powers
Paramount Duty • S.16: Each person to whom the overarching obligations apply has a paramount duty to the court to further the administration of justice in relation to any civil proceeding in which that person is involved… • The overarching obligations are subject to the paramount duty (s.12)
Overarching Obligations • Act honestly • Only make claims that have a proper basis • Only take steps to resolve or determine the dispute • Cooperate in the conduct of the civil proceeding • Not mislead or deceive • Use reasonable endeavours to resolve the dispute • Narrow the issues in dispute • Ensure costs are reasonable and proportionate to the complexity and importance of the issues in dispute, and the amount in dispute • Minimise delay • Disclose the existence of documents critical to the dispute
Relationship with Other Duties • The overarching obligations do not override duties to the court (s.15) • But they do override any other inconsistent obligations (ss.12-13) • Includes obligation to act in accordance with client’s instructions (s.13)
Content of Duty to Court • Duty of candour (disclosure to court) • Duty not to abuse court processes • Duty not to corrupt the administration of justice • Duty to conduct cases efficiently and expeditiously
Main Duties to Client • Competence • Loyalty • Avoid conflicts of interest • Keep information confidential • Disclose and use all material information in the practitioners possession for the client’s benefit • Account • Confidentiality
Sources of the Duties • The retainer • Tort law • Fiduciary relationship • Legislation and rules
Fiduciary Duties • Loyalty • Keep information confidential • Avoid conflicts of interest • Disclose and use all material information in the practitioners possession for the client’s benefit the client • Account to the client
Confidentiality vs Privilege • Three distinguishing features: • Source of the obligation • Conf: Contract / Fiduciary relationship • CLP: Public policy • Scope of the obligation • Conf: Confidential information • CLP: Dominant purpose of advice/litigation • Consequences of the obligation • Conf: Court may require disclosure • CLP: Generally protected from disclosure
Conflicting Interests • Lawyer’s interests vs client’s interests • Lawyer-client conflict • Interests of two current clients • Concurrent conflict • Former client’s interests vs current client’s interests • Successive conflict
Non-Contentious Work: Rules • PCPR 8.2: Conflicts must be avoided • PCPR 8.1B: May act for two parties if no (likelihood) of a material conflict • PCPR 8.3: Consent to conflict is possible if certain requirements are met • PCPR 8.4: A lawyer who becomes aware of a conflict must stop acting for both parties unless they consent
Informed Consent • Must be completely candid and fully disclose the conflict to the clients • O’Reilly(1988) 24 NSWLR 204 • Must insist the client get independent legal advice • Law Society of NSW v Harvey (1976) 2 NSWLR 154 • Heavy burden on lawyer • Unsafe and inadvisable to use
Possible Bases for Restraint • Prevent misuse of confidential intervention • Prevent breach of fiduciary duty of loyalty • Preserve confidence in the administration of justice • The court must intervene unless satisfied that there is no real risk of disclosure • Prince JefriBolkiah v KPMG  2 AC 222 See also World Medical  VSC 196
What is an Information Barrier? • Normally involves some combination of: • Physical separation of departments • Recurring educational programs to emphasise the importance of not divulging confidential information • Strict and carefully defined procedures for dealing with situations when it is felt the barrier should be crossed • Compliance monitoring • Disciplinary sanctions for breach • LIV Information Barrier Guidelines • Prince JefriBolkiah; World Medical  VSC 196
Australian Position • Assume information will move in a firm • Presume you can’t act if there is a conflict • Presumption may be rebutted • Virtually impossible in criminal and family cases • Need clear and convincing evidence of effective measures in other cases • Very heavy burden – unlikely to succeed • Especially difficult for concurrent conflicts • Ad hoc barriers unlikely to be accepted
Costs: Types of Billing • Item remuneration billing (eg SRO) • Time based billing • Fixed fees • Contingency fees • Currently banned: LPA s.3.4.29 • Uplift fees • Must not exceed 25%: LPA s.3.4.28 • Conditional fees (‘no win no fee’) • Cannot be used in criminal or family cases • If combined with uplift fees, successful outcome must be reasonably likely • LPA ss.3.4.27-28
Costs Agreements • Must be written or evidenced in writing • But need not be accepted in writing • A costs agreement that complies with the Act is enforceable as a contract • But a costs agreement that contravenes the Act is void • Some costs may still be recoverable
Disclosure Requirements: s.3.4.9 • The basis on which the costs will be calculated • The right to negotiate an agreement, receive a bill, request an itemised bill, be notified of any changes and receive progress reports • An estimate of the total legal costs or a range of estimates (with an explanation of major variables) • An estimate of the costs that may be recovered if successful, or to be paid if unsuccessful • The intervals at which the client will be billed • The interest that will be charged on overdue bills • Who the client may contact to discuss the costs • Dispute resolution avenues and time limits
Setting Aside Costs Agreements • A costs agreement may be set aside by VCAT if it is not ‘fair and reasonable’ • LPA s3.4.32 • Relevant matters include: • Fraud or misrepresentation • Professional misconduct • Failure to make disclosures • Circumstances and conduct of the parties • Provision for changes in circumstance
Court costs • Costs you must pay your lawyer (solicitor/own client costs) • Costs you can recover if successful (party/party costs) • Party/party basis (necessary and reasonable costs: 50-75% of solicitor/own client costs) • Solicitor/client basis (reasonable costs: close to solicitor/own client costs) • Indemnity basis (very close to solicitor/own client costs)
Costs Complaints • Can make a complaint to the Legal Services Commissioner about costs • Amount must not exceed $25,000 • Can apply to the Costs Court for a review
Civil Complaints: LPA s.4.2.2 • Involve ‘civil disputes’ which are: • Disputes about costs not exceeding $25,000 • Claims about financial losses suffered as a result of an act or omission in the provision of legal services • Not claims against the Fidelity Fund • Any other genuine dispute arising out of, or in relation to, the provision of legal services • May be made: • About the conduct of a practitioner or firm • By a person involved in the dispute • LPA s.4.2.4
Disciplinary Complaints: LPA s.4.2.3 • Complaints about conduct which, if established, would amount to unsatisfactory professional conduct or professional misconduct. • May be made: • About the conduct of a practitioner only • By anybody • LPA s.4.2.4
Unsatisfactory Professional Conduct • “Unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring 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.” • LPA s.4.4.2
Professional Misconduct • Professional misconduct includes: • “Unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; or • Conduct of an Australian legal practitioner, whether occurring in connection with the practice of law or occurring 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.” • LPA s.4.4.3
Possible Types of Misconduct • Dishonesty • Criminal conduct • Tax evasion • Breach of fiduciary duties • Failure to comply with undertakings • Gross overcharging • Gross delay or neglect • Failure to supervise or be vigilant • Sexual misconduct • Disrespect to the Court
Outcomes: s.4.4.13 • If the LSC is satisfied that there is a reasonable likelihood that VCAT would find the practitioner guilty of: • Professional misconduct, he must apply to VCAT for an order under Division 4; • Unsatisfactory professional conduct, he may: • Apply to VCAT for an order under Division 4 • Reprimand or caution the practitioner (with consent); or • Take no further action if satisfied that— • the practitioner is generally competent and diligent; and • there has been no other substantiated complaint about the practitioner’s conduct within the last 5 years. • May order compensation up to $25,000
Solicitors • No general immunity from being sued • Exception: Work that is intimately connected with the conduct of court cases • May be sued for: • Breach of contract • Negligence • Breach of fiduciary duties • Misleading and deceptive conduct
Standard of Care • Must generally meet the standard of a qualified, competent and careful lawyer • Hawkins v Clayton(1988) 78 ALR 69 • May act in a manner that is widely accepted by peer professional opinion as competent professional practice • Wrongs Act 1958 s59(1) • Experts must meet a higher standard • Wrongs Act 1958 s58 • Yates v Boland (1998) 157 ALR 30
Barristers • Barristers were traditionally immune from being sued for negligence relating to their work in conducting litigation • Rondel v Worsley  1 AC 191 • Giannarelli v Wraith (1988) 165 CLR 543 • Immunity was abolished in England and NZ • Arthur J S Hall v Simons  1 AC 615 • Lai v Chamberlains  3 NZLR 291 • But it continues to exist in Australia • D’Orta-Ekenaike v VLA (2005) 223 CLR 1 • LPA s 7.2.11(1)
Scope of the Immunity • Proceedings for negligence • Not costs orders • Not disciplinary proceedings • Work in court or which is ‘intimately connected’ with court work • Work by solicitors preparing for court • D’Orta-Ekenaike v VLA (2005) 223 CLR 1 • Goddard Elliott v Fritsch  VSC 87
Lawyers, Ethics & Society 5125 Revision Question 1: Q: What advice will you give Warren about his prospects of re-admission and what evidence will he need?
Lawyers, Ethics & Society 5125 Revision Question 2: 2.i. What advice will you give Scott in relation to all the events described relating to Psifem Ltd?
Lawyers, Ethics & Society 5125 Revision Question 2 (cont): 2.ii What are the benefits of any action you propose?
Lawyers, Ethics & Society 5125 Revision Question 2 (cont): 2.iii What assistance can you provide to Bryan Rucksock with his personal matter?