L4: Regulation & Discipline of the Legal Profession

RESOURCES Dal Pont (DP) – chapters 1, 23, 24.10 – 24.30, 24.35 – 24.65, 24.160 –

24.170 and 25 Reading Materials on L@G

◦ Regulation Legal Services Commission (LSC) website: www.lsc.qld.gov.au Legal Profession Act 2007 (Qld)

From Self-Regulation to Regulation DP chapter 1PROFESSION = SELF-REGULATION?

Corollary of public service and special skill and learning Professionalism = the belief that people who have the expertise to provide

these services can be entrusted to control the services and the working conditions (DP, p 11)

Resistance – could undermine crucial independence of adversarial system But competition law and societal attitudes have changed (Discussed in weeks 1 and 2) Is it because we self regulate that it is a profession or is it that because we

do have these very key characteristics of being a profession we should in some way have the right to self regulate- it is the latter view that is most probably held by the Queensland law society- this idea that there is a particular set of characteristics that we hold as professionals we have this special skill and learning and we have a duty to give this public service and bc of this we have a right to self regulate.

IMPACTS ON PROFESSION

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History of Regulatory System Some form of statutory regulation in Qld since 1881 Statutory provisions for discipline of solicitors since 1930 Originally, QLS & BAQ handled most discipline complaints (self-

regulation) 1985 – Office of Lay Observer – became Legal Ombudsman 2 tiers to handle complaints:

◦ Solicitors Disciplinary Tribunal (less serious, included a lay member) and

Statutory Committee (all lawyers) (See CST, pp 8 – 12)

History (cont) 1997 – establishment of Solicitors Complaints Tribunal – lawyers and lay

members Criticism of system growing in time of development of ideas of

competition◦ Law firms should engage in competitive rivalry and this would

produce services of required standard Criticism of QLS and SCT – not sufficiently independent or resourced Scandals:

◦ Harry Smith (GC solicitor - $6 million)◦ Baker Johnson – allegations of overcharging + QLS failing to act on

complaints

LEGAL OMBUDSMAN REPORT ¼I fully support the regulation of the profession and investigation of

complaints against the legal profession by like professionals. … it is also my recommendation that any professionals conducting the regulatory role should be completely independent from QLS and their associated functions. … QLS has a conflict of interest in maintaining a regulatory role as well as maintaining their role as a Society to benefit the profession. This [has] marred its image in their handling of complaints against BJ lawyers. The reported quotes of “Caesar judging Caesar” [etc] appear justified.

Problem with self regulation; in he end you have a body whose basic function is to support its members who is members of that profession but at the same time that same body Is also the body that has the power to discipline, regulate and introduce rules – not a good system.

THE NEW REGULATORY SYSTEM Legal Profession Act 2004 (Qld) – altered disciplinary structure for legal

profession Based on the Model Rules of Professional Conduct – drafted and published

by the Law Council of Australia in 2002. July 2004 - Legal Services Commission commenced operation -

independent body to handle complaints - consumer-oriented focus

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Legal Profession Act 2007 (Qld)(replaced 2004 Act

A NEW APPROACH TO REGULATION Rules now concerned with establishing and preserving the integrity of the

legal services market Confidence of consumers in quality (protecting client and the consumer) Primary importance on establishment and maintenance of management

systems Practitioners should ask:

◦ What does it mean to act ethically, and why should I act in those ways?

◦ What constitutes good client service, and why should I provide such service?

◦ These are the questions they think lawyers should be asking (See CST, p 5)

DESIRED OUTCOMES OF REGULATORY CHANGES Consistent national approach to admission of legal practitioners Statutory basis for the regulation of barristers Facilitate practice in Qld by interstate lawyers Setting and enforcing a high level of professional ethics Greater independence, accountability and transparency in complaints and

disciplinary processes Greater integrity, consistency and independence re costs review

processes New business structures – incorporations and multi-disciplinary practices Registration of foreign lawyers

(See C, S & T, p12)On the one hand you have this consumer focus, on the other you have governments desire for things to become more streamlines (technical things being achieved)

CURRENT ISSUES Current Issues:

1. Lack of professionalism (complaints of incivility, aggressive litigation, questionable conduct)

2. Low public opinion of lawyers3. Low levels of job satisfaction & mental well-being of lawyers

(See C, S & T, p13)- No question that a lawyer who is happy is much more likely to act ethically and act in the best interests for their client rather than one who is working too many hours, poor mental health and this impacts on ethical lawyering.

EMPHASIS ON MANAGEMENT SYSTEMS IS PARTLY ABOUT ADDRESSING THESE TYPES OF ISSUES

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“Acting ethically is not simply a question of knowing and understanding the conduct rules… it is also a question of maintaining effective, realistic practice management and healthy work practices.”

(See C, S & T, p16)

CONNECTIONS BETWEEN MENTAL HEALTH & ETHICAL CONDUCT Lawyers - profession most likely to suffer depression Substance abuse - alcohol and/or non-prescription drugs High workloads and pressure from partners and clients Mismatch between expectations and reality of practice

(See C, S & T, pp13 -16 of Chapter 1)

CONNECTIONS BETWEEN MENTAL HEALTH & ETHICAL CONDUCT

Legal Services Commissioner, John Briton:My interest…stems from the presumption that emotional distress among lawyers reveals itself in behaviours that fall short of the standards of competence and diligence and the ethical standards that members of the public and the profession are entitled to expect of them.

I don’t doubt for a moment that emotional distress is the elephant in the room in a large proportion of the matters we deal with at the Commission and it’s explicit in many of the matters that come before the disciplinary bodies.(BAQ Annual Conference 2009)

EMPHASIS ON MANAGEMENT SYSTEMS Importance placed on establishment and maintenance of management

systems to encourage ethical awareness Seen as tools to develop culture of ethical compliance & professionalism

within legal practices (See C, S &T)

LSC’s online ethics surveys at www.lsc.qld.gov.au – audit of ‘ethical infrastructure’

Looking at the way in management systems in able to assist ethical structures, Legal Services Commission have surveys were this is what they are trying tor Research

In small firms you can still implement practice in terms of how people manage mental health, ethical dilemmas etc

REGULATING ETHICS MANAGEMENT P, G & M article – looks at NSW requirement for incorporated legal

practices to implement ‘appropriate management systems’ to ensure compliance with professional ethical obligations

Discovered that what happens with structures is it provides a structure for ethical management which is actually very helpful

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Note Pt 2.7 LPA (Qld) allows incorporated legal practices – same requirement in s117 – definition of ‘professional obligations’ in s110

REGULATING ETHICS MANAGEMENT Innovation in traditional regulation of legal profession – self-regulatory

‘management-based regulation’ NSW approach – ‘education towards compliance strategy’ – requires firms

to self-assess & report on implementation of appropriate management structures

P, G & M’s 2 interpretations Optimistic – regulatory encouragement of effective ‘ethical

infrastructure’ Pessimistic – commercialization & bureaucratization of legal

practice – replace professional judgment & ethical values with ‘box-ticking’

REGULATING ETHICS MANAGEMENT ‘Appropriate management structures’ not defined in LPA NSW OLSC(Office of Legal Services) outlines 10 key objectives for ILPs:

Negligence Communication Delay Liens/File Transfers Cost Disclosure/Billing Practices/Termination of Retainer Conflict of Interests Records Management Undertakings Supervision of Practice & Staff Trust Account Regulations

(See P, G & M at p.472)

REGULATING ETHICS MANAGEMENT Measuring ‘ethical output’ - best available measure is number of

complaints made to independent regulator – imperfect indicator of ethical behaviour in law firm(See P, G & M at pp.478-480)

P, G & M found dramatic lowering in complaints rates after self-assessment – on average, complaint rate for each ILP after self-assessment was one third of pre-assessment rate + about one third of rate of non-incorporated firms (no self-assessment required) (p.493)

Conclusion - “…these firms have found a productive partnership between professional ethical values, commercialism (incorporation), and bureaucracy (management) - with the help of the regulatory approach taken in NSW.” (p.499)

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Disciplinary Processes DP chapters 23 and 24

DISCIPLINARY JURISDICTION - ROLE OF COURTS Integrity of profession must be maintained for public trust in the

profession Court has a right and duty to supervise lawyers as officers of the court Inherent jurisdiction to discipline lawyers (preserved under LPA) -

corollary to authority to admit Statutory jurisdiction – appeals from determinations of disciplinary

tribunals S13 LPA- courts inherent jurisdiction The Supreme court has the power to admit a person as a legal

practitioner; protection of public interest is the min focus Courts; inherent jurisdiction and statutory jurisdiction Aim to protect public from the mudguard of lawyers- not talking about

punishment here When such things happen the individual does get great deprivation - if

gets struck off a huge deal Acts as a deterrent factor s well- good message for those entering the

profession and inexperienced lawyers S416 Chapter 4 of the Act- to promote the professional standards and

competence of the legal profession and protect members of the public from unlawful operators

Be expected to cooperate fully and frankly- if no cooperation may go against their interest

(See Dal Pont, pp.739-741)

PROTECTIVE AIM OF DISCIPLINE Main purpose of disciplinary proceedings is protection, not punishment Baker v Legal Services Commissioner [2006] QCA 145:

….the sanction for violation is not intended to punish but is designed for the protection of the public and to maintain confidence in the profession in the estimation of the public and of the profession as a whole. (per McPherson J at para 46)

Aim is to protect members of the public from misconduct Subsidiary objectives:

Maintaining proper standards in the profession Deterring other lawyers from misconduct by setting an example

(See Dal Pont, pp.742-746 If 5 things complained about for a person- cant take all five together –

each one has to be looked at- any lawyers conduct is a matter of public concern- each matter should be addressed and openly dealt with- could be relevant for application for future admission – each has to be addressed on the basis that they may be relevant in future for admissions etc

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Who has onus? The person who is alleging the conduct- the professional body usually, what is the standard of proof? Balance of probabilities, 639 subclause 1 of the Act

S649(1)

MAIN PURPOSES OF LPA - SECTION 3 a) to provide for the regulation of legal practice in this jurisdiction in the

interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally;

b) to facilitate the regulation of legal practice on a national basis across State borders.

MAIN PURPOSES OF CHAPTER 4 LPA - SECTION 416 (a) to provide for the discipline of the legal profession;(b) to promote and enforce the professional standards, competence and honesty of the legal profession;(c) to provide a means of redress for complaints about lawyers;(d) to otherwise protect members of the public from unlawful operators.

Who can complain? Sources of complaint:

Client Member of public Another legal practitioner Law practice employee QLS BAQ LSC

Complaints directed to LSC LPA ss429(1) & (3)-(5) - how to make complaint LPA s429(2) - exceptions for government lawyers Investigation Process Point of complaint is LSC Lawyer must be notified and given chance to make submissions (LPA

ss437, 438) Note: non-legal law practice employees can also be investigated &

prosecuted (LPA s425) LSC can keep investigation or refer to professional body (QLS or BAQ)

(LPA s435) Commissioner makes final decision on whether to prosecute (LPA s447) Can dismiss if:

No likelihood of finding of UPC or PM; or In the public interest

(LPA s448(1))

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THREE LEVELS OF MATTERS

Consumer disputes LPA s440 definition Does not amount to a “conduct complaint” LSC has no power to require mediation – can only suggest No power to reprimand or order compensation LSC Commissioner would like to see these powers enhanced

Unsatisfactory professional conduct (s418) Professional misconduct (s419)

Unsatisfactory Professional Conduct: s418 definitionUnsatisfactory 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.

Professional Misconduct: s419 definition(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 maintain a reasonable standard of competence and diligence; and(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.

Conduct capable of being UPC or PM - s420

(a) conduct consisting of a contravention of a relevant law; (b) charging of excessive legal costs in connection with the practice of law;(c) conduct for which there is a conviction for—

(i) a serious offence; or(ii) a tax offence; or(iii) an offence involving dishonesty;

(d) becoming an insolvent under administration;(e) becoming disqualified from managing any corporation under the Corporations Act;(f) failing to comply with an order of a disciplinary body…;(g) failing to comply with a compensation order…

Disciplinary Bodies More serious matters go to QCAT Less serious (and any offences involving law practice employees) go to

Legal Practice Committee◦ Hearings – chairperson, legal practitioner (barrister if barrister)

otherwise solicitor, lay person QCAT Orders - s456 Strike off practitioner

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Suspend practising certificate Impose conditions on practising certificate Fine up to $100,000 Undertake a course Be supervised in practice Periodic inspection Compensation

Note: LPC cannot strike off and has lesser sanction powers (LPA s458) Types of

Misconduct

DP chapter 25 Misconduct in Course of Practice Misleading court or tribunal Misleading another lawyer or 3rd party Misleading regulatory body Disrespect for court or its authority (Turley) Trust account irregularities (week 6) Conflicts of interest (week 8) Breach of confidentiality (week 7) Overcharging (week 9) Failure to supervise (week 9) LSC v Turley [2008] LPT 4 Practitioner been admitted for 40 years – no previous misconduct Adversarial advocacy and client empathy gone too far:

o Proceedings involved Dept of Child Safetyo “The lowest act of any department that this office has seen.

Certainly the lowest act I have seen in 35 years by the department.”

o “One has only to go through what the department has said and what appears in newspapers to see that one cannot trust the department. It is almost staffed by animals.”

o “And that the children should be returned to my client and not put in the hands of these people who are almost like a (coven) of witches.”

Misconduct Outside of Practice Criminal conviction may or may not be relevant to practising law - but

never a good idea for a lawyer! Sexual offences Child pornography offences Drug offences Stalking –

o prolonged and involved property damage and stealing (LPCC v Tomlinson [2006] WASC (DP, p 827)

A Solicitor v The Council of the Law Society of NSW [2004] HCA 1 NSW Court of Appeal - Sheller JA (Mason P and Giles JA agreeing):Professional misconduct “may extend beyond acts closely connected with actual practice, even though not occurring in the course of such practice, to conduct

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outside the course of practice which manifests the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice.   … the conduct constituted a most serious breach of trust on the [appellant's] part given the paternal like role he had with the victims.”

A Solicitor v The Council of the Law Society of NSW [2004] HCA 1 High Court - per Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ:It is true that the conduct involved a form of breach of trust, being the trust reposed in the appellant by the mother of the children (who later forgave, and married, him) and the children themselves. However, the nature of the trust, and the circumstances of the breach, were so remote from anything to do with professional practice that the characterisation of the appellant's personal misconduct as professional misconduct was erroneous.

Legal Services Board v McGrath (2010) Possession of child pornography Warren CJ:

◦ Conviction for any serious breach of law raises questions about a lawyer’s willingness to obey the law

◦ Legal profession demands both empathy and insight into the victims of criminal behaviour

◦ Need to be very careful about diminishing seriousness of behaviour because crime seems to be “arm’s length”

◦ “incompatible with the judgment and understanding required of members of the legal profession”.

LSC v CBD [2012] QCA 69 … the legal profession is one which demands both empathy and insight into the victims of criminal behaviour if it is to be performed to the standard expected by the courts, fellow practitioners and the general public. Any conviction which appears to show a disdain for such victims will raise a serious concern about a practitioner‘s professional and moral fitness to remain an officer of the court.Finally, any suggestion that crimes committed at arm‘s length, such as those which involve child pornography, can be considered of lesser seriousness in deciding upon an individual‘s fitness to remain on the roll should be the subject of intense scrutiny. … it is beyond dispute that a practitioner‘s conviction for a serious offence is relevant as it goes to a practitioner‘s willingness and ability to obey the law which is integral to the civic office which [practitioners] perform and the trust reposed in them to properly perform that function and to the maintenance of public trust and confidence in the legal profession. (per Muir JA)

LSC v CBD [2012] QCA 69 Depriving the respondent of his ability to earn a living through the practice of his chosen profession will harm him and do nothing to maintain public confidence in the legal profession or otherwise serve the good of the legal professional or the public. The appellant has been severely punished… … the imposition of further sanctions would impact more heavily on the physical and mental health of the respondent than would be the case with persons without the type of psychological difficulties under which the respondent labours…. Although primary regard must be had to the protection of the public and the maintenance of proper professional standards, it does not follow that the impact of penalties

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on a practitioner, particularly insofar as they may affect the practitioner‘s health and ability to practise in future, are irrelevant. It should not be overlooked that the respondent practised with apparent competence and success without any blemish on his professional record. There is every expectation that he will continue to do so and the offending conduct, which is unlikely to reoccur, does not bear directly on the performance of the respondent‘s work as a solicitor or on his relationship with clients. (per Muir JA)

National Legal Profession Reform

Status of National Legal Profession Reform National Legal Profession Reform Taskforce established in April 2009

◦ objective to prepare nationally uniform legislation Consultative Group

◦ members from each State and reps of the profession Draft Legal Profession National Law

◦ December 2010 to COAG Taskforce driven by:

◦ Creation of a national regulatory framework◦ Establishment of an Australian Legal Profession◦ Reduction in regulatory burden◦ Enhanced consumer protection maintenance of independence of

legal profession NSW and Victoria Go Ahead 2011 – COAG ready to go ahead with most states (not WA or SA) States kept sliding out (Qld in October 2012) December 2013 – NSW and Victoria entered an Intergovernmental

Agreement 2013 and 2014 those states introduced Legal Profession Uniform Law

Application Bill Come into operation mid 2015 Two New Regulatory Bodies in NSW and Victoria Legal Services Council – website developing:

http://www.legalservicescouncil.org.au/index.html

Commissioner for Uniform Legal Services Regulation Will Qld follow? Issues Relevant to / Influencing Regulation Politics Economics Law Public administration Risk and risk management Competition Public policy

(J Catanzariti, then President, LCA, Feb, 2013) Challenges & Impact of Internationalisation Operating at 3 levels;

◦ Facilitating international free trade in services◦ International demand for Australian lawyers

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◦ Entrepreneurial spirit of Australian law firms Transparent guidelines for local practice by foreign lawyers Work happening to enhance Australian foreign practice rights in USA and

many places

SOME EMERGING ETHICAL ISSUES Outsourcing:

◦ Is the foreign service bound by the same professional standards as in Australia

◦ Supervision of performance and quality Cloud computing:

◦ Lack of control over software changes◦ Reduced control over location / movement of confidential client

info• Social media:

• Unintended solicitor/client relationships

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