Week 3: Regulation of the Profession and the Retainer Flashcards
(25 cards)
What are legal ethics?
→ Legal ethics are more than just rule compliance
→ Professional responsibilities are minimum expectations set by the law
→ Ethics require professional judgement in complex situations that can not be solely defined by rules
NSW, Victoria, WA have adopted the LPUL (75% of Australian Lawyers)
Australian Legal Practitioner
Defined by s 6 of the LPUL as being an Australian lawyer who holds a current Australian practising certificate
Lawyer
Essentially, this is a person who has been admitted to the Roll of Legal Practitioners kept by the Supreme Court in the state in which the person was admitted. “Lawyer” includes barristers and solicitors and is further defined by s 219 of the LPUL as being an Australian legal practitioner or an Australian – registered foreign lawyer who is the associate of a law practice. This term is also defined at s 261 of the LPUL to include:
(a) an Australian legal practitioner;
(b) an Australian-registered foreign lawyer; (c) an Australian lawyer who is not an Australian legal practitioner; (d) a former Australian legal practitioner, a former Australian-registered foreign lawyer or a former Australian lawyer.
Solicitor
Defined by s 6 of the LPUL means an Australian legal practitioner whose Australian practising certificate is not subject to the condition that the holder is authorised to engage in legal practice as or in the manner of a barrister only. In simple terms, a legal practitioner who is admitted to practise as a solicitor and not a barrister
Barrister
Defined by s 6 of the LPUL means an Australian legal practitioner whose Australian practising certificate is subject to a condition that the holder is authorised to engage in legal practice as or in the manner of a barrister only. In simple terms, a legal practitioner whose practising certificate allows practise as a barrister only
Counsel
refers to both barristers and solicitors
Legal Services Council
The objects of this body are set out in s 394 of the LPUL. The Council is a representative body comprised of five members from participating jurisdictions. One member is appointed by the Law Council of Australia, one member from the Australian Bar Association, two members on recommendation from the Attorneys-General Standing Committee and one member as chair. The Legal Services Council is charged with the responsibility of monitoring the implementation of the Uniform Law and Rules. The Council also addresses any need for change in the law to promote consistency across jurisdictions. It is overseen by the Standing Committee of the Attorneys-General
→ Umbrella body as all other bodies report to them
→ Independent Statutory Body that consults government
→ Monitors the overall operation of the LPUL framework and is responsible for making Uniform Rules. The council can issue guidelines and directions about the exercise of functions by local authorities (except about complaints and professional discipline, as this one of the Commissioner’s function)
→ The council’s objectives are:
○ Monitor the Uniform Law’s implementation and ensure that it is applied consistently
○ Ensure the Uniform Framework remains efficient, targeted and effective, and promotes the maintenance of professional standards
○ Ensure the Uniform Framework appropriately accounts for the interests and protection of clients of law practices
Australian Solicitors’ Conduct Rules (ASCR)
→ Express collective professional standard
→ All states have adopted except for NT
→ Legislative authority, not merely guidelines
→ Covers duties to clients, courts, other practitioners, third parties
→ The Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (ASCR) are a set of uniform professional rules that regulate how solicitors manage legal practice, particularly with respect to their duties to clients, the courts, other practitioners and third parties. The Law Council of Australia notes these rules are “derived from legislation, common law and equity” and “express the collective view of the profession about the standards of conduct that members of the profession are expected to maintain”.
→ The ASCR contains overarching ethical principles that guide and inform the conduct of the profession, without prescribing every detail of legal practice
→ The rules were developed by the Professional Ethics Committee of the Law Council of Australia, the peak representative body of lawyers. This committee was established in 2009 to develop the ASCR as a uniform statement of conduct rules for solicitors throughout Australia. The ASCR is a product of collaboration between all law societies and constituent professional bodies of the Law Council of Australia.
→ For NSW and Victoria, the LPUL confers powers on the Legal Services Council of Australia to develop the Uniform Rules. Section 427 of the LPUL provides that the Law Council of Australia is responsible for developing the Legal Practice Rules, Legal Profession Conduct Rules, and Continuing Professional Development Rules so far as they relate to solicitors
→ Sections 427, 428 and 431 of the LPUL provide that those rules may be amended or added to after consultation between the Legal Services Council, the Commissioner for Uniform Legal Services Regulation and nominated DLRAs. After public consultation, new rules are submitted to the Standing Committee of Attorneys-General who retain the right to veto or approve the rules. The rules are then published as legislation and become statutory rules in accordance with the respective Interpretation Acts.
→ Under section 419 of the LPUL, the Legal Services Council can make and amend the Legal Profession Uniform Laws rules when required to ensure the operation of the Uniform Law; proposed changes are to be presented to the Attorney General’s standing committee before implementation
Under the Legal Profession Uniform Law Applications Acts in each jurisdiction, DLRAs are given responsibility for the investigation of complaints and have extensive powers to investigate, determine or dismiss complaints up to specified thresholds. In New South Wales, the Legal Services Commissioner is the DLRA. In Victoria, the Victorian Legal Services Board and Commissioner is the DLRA for complaints and discipline.
Law Council of Australia
→ Release commentary on solicitors’ rules
→ Not set up by the legislation contrary to Legal Services Council - representative body
→ Represents Australian legal profession on national and international issues, on federal law and the operation of federal courts and tribunals. It works for the improvement of the law and the administration of justice
→ The Law Council is a federal organisation representing 90,000 Australian Lawyers through their bar associations and law societies
→ NOT part of the regulatory framework under the LPUL
The ASCR were collaboratively developed by all of the state and territory law societies and other constituent professional bodies of the Law Council, as the agreed set of professional conduct rules for all solicitors in Australia.
Council of the Law Society of the ACT v Yeend (No.2) [2025] ACAT 15
Background and Findings
This case involved Gillian Yeend, a solicitor who was found guilty of professional misconduct due to:
1. Dishonestly misappropriating client funds by making 50 unauthorized transfers from her trust account to her office account
2. Failing to report 56 trust account irregularities to the Law Society
3. Dishonestly dealing with the Law Society during its investigation, including providing false invoices to conceal her conduct
The Tribunal found that from 2016-2018, Yeend engaged in a deliberate scheme to access clients’ money without entitlement. When investigated, she provided the Law Society with invoices that differed from those actually sent to clients to hide that she had transferred funds before invoices were issued.
Key Legal Principles on Professional Responsibility
1. Purpose of Disciplinary Proceedings: The Tribunal emphasized that disciplinary proceedings are not punitive but protective – they aim to protect the public and the profession’s reputation. Deterrence of other practitioners is also a key function.
2. Trust Account Obligations: The case underscores that a solicitor’s handling of trust accounts is fundamental to legal practice. As noted from earlier cases: “reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor.”
3. Dishonesty as Serious Misconduct: The Tribunal referenced Council of the NSW Bar Association v Sahade, which established that dishonesty in legal practice “will usually give rise to a heightened concern” about fitness to practice.
4. Duty of Candor to Regulatory Bodies: The case highlights a practitioner’s obligation to be fully honest and cooperative with the Law Society during investigations. The judgment referenced that the Society “is entitled to respect and compliance with it by members of the legal profession.”
Misappropriation of Client Funds: The Tribunal cited the principle from Bannister that “the normal consequence of the misappropriation by a solicitor of the client’s money is that his name be removed from the roll.”
Legal Profession Admission Board (LPAB)
→ Committee reports straight to Legal Services Council
→ Determines the eligibility and suitability of people seeking to be admitted as a lawyer in NSW - may apply for a compliance certificate
If satisfied of the eligibiility and suitability of an applicant, the Board may issue the Supreme Court with a compliance certificate in respect of the applicant
Office of NSW Legal Services Commissioner (OLSC)
→ Established by s 398 of the LPUL, the Commissioner for Uniform Legal Services Regulation monitors, reviews and issues guidelines and directions to the local regulatory authorities concerning Ch 5 functions of the LPUL (Dispute resolution and professional discipline). The Commissioner may issue guidelines about complaints functions to ensure consistency between jurisdictions but cannot determine particular disciplinary matters. This is left to the designated local regulatory authorities (DLRAs).
→ Responsible for disciplinary action
→ Independent statutory body that deals with complaints about lawyers under the LPUL Act 2014
→ Consists of the Legal Services Commissioner and staff who advise and assist the commissioner in the exercise of its function and powers
→ Oversees investigation of complaints
→ Plays a major role in resolving consumer matters
→ May take disciplinary action against a solicitor or barrister, or commence disciplinary proceeding in the NCAT occupation division
→ Complaints can either be consumer matters (costs, service issues) which usually don’t result in findings of misconduct or disciplinary matters (professional standards) which are breaches of the solicitors’ rules. This can result in two levels of misconduct; unsatisfactory professional conduct or professional misconduct
Designated Local Regulatory Authorities (DLRA)
→ DLRAs are independent bodies responsible for overseeing various chapters of the LPUL.
→ Their responsibility includes registration of legal practitioners, trust accounting, complaints and discipline, audit and compliance, admission to practice and dispute resolution.
These bodies are defined by s 6 of the LPUL and appointed by each jurisdiction’s application legislation. An example of the appointment of DLRAs may be found in s 11 of Sch 1 of the Legal Profession Uniform Law Application Act 2014 (Vic) which appoints various bodies (such as the Law Society Council and the Bar Council) to perform specific regulatory functions under the LPUL. These bodies are empowered to issue their own regulatory guidelines and directions in addition to the functions conferred on them under the LPUL.
Recognise the multiple obligations within the lawyer-client relationship
Implied terms in lawyer-client relationship:
→ The lawyer will act in the client’s best interests (fiduciary duty)
→ The lawyer will exercise reasonable care and skill
→ The lawyer will keep client’s information confidential
→ The lawyer will avoid conflicts of interest
→ The lawyer will comply with statutory regulations about costs
→ The lawyer will maintain professional objectivity to ensure proper advice
→ The lawyer will complete the entire contract unless there are valid grounds for termination
Identify when a retainer is formed and how it can be terminated
→ Has to be an agreement: whether orally or in writing or inferred by the conduct of the parties
→ Proof of consideration (consideration is the price that is asked by the promisor in exchange for their promise)
→ Must have been created in circumstances where the parties had the intention to enter into a binding legal relationship
→ Must comply with statutory formalities
→ Must be created in circumstances in which the client has the capacity to enter into a contract
→ Must have full and free consent of the client to enter into the contract
→ Identifies who the client is
→ Identifies the scope of the retainer
→ Case Law: Steel v Marshan (2011) NSWCA 299
○ Steel claimed he didn’t have to pay solicitor as he was unhappy with the outcome
Due to oral contract he had to pay - contractual relationship
Legal character of the retainer
○ Contract: mutual obligations for services and payments - includes both express and implied terms
- Solicitors have no obligation to accept unlike barristers who are bound by the Cab Rank principle - once accepted however, must complete
- “Enter Agreement” principle - once entered into a retainer obligation must see until the end
- Client has the right to terminate at any time
Article 13 of the ASCR: in order to termination just cause required, reasonable notice required, special rules for criminal matters;
Rule 13 of the ASCR
SM Project Developments Pty Ltd (2017) NSWSC 1010
On the day of trial, lawyers appealed to court to withdraw as they had not been paid - court declined request as this was seen as not obligating to their primary duty to the administration of justice
Rule 7.29 UCPR
Tort: Duty of care to perform with reasonable skill
- Scope of duty is largely determined by retainer (but may extend in some cases)
- Lawyers ow their clients duty of care in negligence
- Standard: reasonably competent practitioner
- Civil Liability Act 2002 (NSW), s50 - not liable if peers widely believe was confident in legal practice
Case Law: Roberts v Cashman: lawyer didn’t execute duty of care when acting in the best interests of the class action rather than the client
Fiduciary Relationship - Duties of Loyalty and Trust
- Without undivided loyalty, should not be acting
- Proscriptive (what not to do)
- Avoiding conflicts (client to client)
- Avoiding personal conflicts (duty-interest)
No profit rule: No profiting from relationship except as permitted
Beach Petroleum NL v Abbott Tout Russell Kennedy
“the appelant sought to recover from the respondents the amounts of which it had been defrauded on the basis that the respondents had breached their fiduciary duty”. The CA notes that fiduciary duties do not just arise simply because of the status of the relationship between the solicitor and client. Fiduciary duties arise from “what the solicitor undertakes or is deemed to have undertaken” in performing the retainer. Fiduciary duties are an imposed not accepted responsibilty where the law charactersises the course of the dealings between solicitor and client as being one that attracts fiduciary duties
Professional Obligations - Governed by conduct rules
- Rule 4.1.3 of the Solicitors’ Conduct Rules specifically requires solicitors to deliver legals services competently, diligently, and promptly
- Legal knowledge and skill in relevant practice areas
- Dilligence in attending to matters efficiently
- Being up to date with legal developments
- Understanding when to seek specialist assistance
- Technological competence relevant to modern practice
- Rule 4.1.3 requires solicitors to deliver legal services “as promptly as possible”
- Rule 7.1 requires advice to be given in a timely manner, with the objective of helping clients “understand relevant legal issues and make informed choices”
Rule 8.1 of the ASCR requires solicitors to follow clients’ “lawful, competent and proper instructions”
Understanding Client Capacity
→ Onus is on a lawyer to determine client capacity
→ Rule 8 of the Solicitors Conduct Rules states that “a solicitor must follow a client’s lawful, proper and competent instructions”
→ Common law presumption of competence
→ Case Law: Gibbons v Wright (1954) 91 CLR 423 [7]: “the mental capacity required by the law in respect to any instrument is relative to the particular transaction which is being affected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained”
→ Solicitors must be reasonably satisfied that the client has the mental capacity to give instructions. If they aren’t satisfied, they must not represent for the client
Case Law: Goddard Elliot (a firm) v Fritsch [2012] VSC 87: Lawyers advised their client Mr Fritsch to settle a family law matter of terms extremely favourable to Fritsch’s wife. On the day, Mr Fritsch was suffering from significant mental health issues. The court found the lawyers negligent for taking and acting on instructions when Fritsch lacked capacity to give them resulting in a worse outcome than would have been achieved at trial (damages were assessed at $900,000)
