Lawyers, Ethics & Society 5125*

Lawyers, Ethics & Society 5125

Any questions?

See also: ACCC v Sampson [2011] FCA 1165http://www.austlii.edu.au/au/cases/cth/FCA/2011/1165.html

For interest only: Tichborne Claimant: http://en.wikipedia.org/wiki/Tichborne_case

This week in the Media: Weekly Winners

Week 2: Penelope SWALES: Pussy Riot Punk band on trial

Week 3: Camille DAVIS: Monster’s party boy Tim U/fire

Week 4: Richard XIN: Accused 'stressed ethics' to lawyers

Week 5: Timothy QUEK: NUS law professor in sex-for-grades probe identified

Week 6: Andrew CHEN: Do big companies hog the best lawyers?

Week 7: Lydia BADOER: Peter Mac denies tobacco conflict

Week 8: WHOLE CLASS: Rake

Week 9: WHOLE CLASS: Slipper parts from Lawyers

Week 10: Vaishali CHAUDHARY: Providing itemised bills: a legal obligation

Week 11: Penelope SWALES: A river gets legal standing

WEEK 12 OVERALL WINNER ????

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

1. Awareness of ethical issues, interests and values

2. Application of ethical standards or principles

3. 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 [1981] 2 NSWLR 372

– Dishonesty• Foreman (1994) 34 NSWLR 408

– Academic misconduct• Re OG a Lawyer [2007] VSC 520

– Personal moral standards• Re Bell [2005] QCA 151

Academic Misconduct*

• Law Soc Tas v Richardson [2003] TASSC9

• Law Society of South Australia v De Souza [2003] SASC 316

• Re OG a Lawyer [2007] VSC 520

• Re AJG [2004] QCA 88

• Re Liveri [2006] QCA 152

• LPA s.2.3.3

Hierarchy of Duties

1• Duty to Obey the

Law

2 • Duty to the Court

3 • Duty to the Client

4 • Duty to Others

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

17. Act honestly

18. Only make claims that have a proper basis

19. Only take steps to resolve or determine the dispute

20. Cooperate in the conduct of the civil proceeding

21. Not mislead or deceive

22. Use reasonable endeavours to resolve the dispute

23. Narrow the issues in dispute

24. Ensure costs are reasonable and proportionate to the complexity and importance of the issues in dispute, and the amount in dispute

25. Minimise delay

26. 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:1. Source of the obligation• Conf: Contract / Fiduciary relationship• CLP: Public policy

2. Scope of the obligation• Conf: Confidential information• CLP: Dominant purpose of advice/litigation

3. 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

1. Prevent misuse of confidential intervention

2. Prevent breach of fiduciary duty of loyalty

3. Preserve confidence in the administration of justice

• The court must intervene unless satisfied that there is no real risk of disclosure– Prince Jefri Bolkiah v KPMG [1999] 2 AC 222

See also World Medical [2002] 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 Jefri Bolkiah; World Medical [2002] 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 [1969] 1 AC 191– Giannarelli v Wraith (1988) 165 CLR 543

• Immunity was abolished in England and NZ– Arthur J S Hall v Simons [2002] 1 AC 615– Lai v Chamberlains [2005] 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 [2012] 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?

NB: 2011 Exam answers revision notes on Moodle late Thursday 18/10/2012

Lawyers, Ethics & Society 5125

Finally: What I would like you to take away?

Lawyers, Ethics & Society 5125

• Part of your qualifications for admission

• An understanding that a thorough knowledge of the law is only part of the necessary tools of the lawyer

• LES is about how you conduct yourself in practice

• Trust is fundamental to the practise of law

• You can trash your reputation in five minutes and sometimes never get it back

• An understanding that a thorough knowledge oAn understanding that a thorough knowledge of the law is only part of the necessary tools of the practice of law• f the law is only part of the necessary tools of the practice of law• An understanding that a thorough knowledge of the law is only part of the necessary tools of the practice of law