• General issues
• Dealing with conduct aspects of a complaint
• Dealing with consumer aspects of a complaint
• Referral to other authorities
• Referral to costs assessment
• Review by the LSC of Council decisions

5.1 This Chapter deals with the options available once an investigation into a complaint has been carried out by the LSC or the Councils.¹

GENERAL ISSUES

Outcomes of investigations

5.2 One of the general issues raised in this chapter is whether the LSC or relevant Council should be able to make enforceable orders at the end of the investigative stage. Powers currently available to the LSC or Councils at this stage include:

• allowing the complaint to be mediated if the parties agree;
• reprimanding the practitioner with respect to unsatisfactory professional conduct (such a reprimand may only be made with the consent of the practitioner);
• dismissing the complaint, which has no adverse effect on the practitioner and therefore does not require enforcement.

The Western Australian system

5.4 The Western Australian provisions² relating to the conduct of practitioners were enacted following a 1983 report which recommended that there be a body to investigate complaints and a tribunal to discipline practitioners in relation to matters arising from such investigations.³ However, the inquiry also recommended that there be a limited jurisdiction, where appropriate, for the complaints handling body to deal with “minor disciplinary matters” and that these powers only be exercised with the practitioner’s consent.⁴ The powers that may be exercised with the practitioner’s consent (and notwithstanding that no finding has been made against the practitioner) include:⁵

• imposing a fine of not more than $500;
• issuing a reprimand;
• ordering that the practitioner seek and implement advice relating to the management and conduct of the practitioner’s practice;
• ordering that the practitioner reduce or refund certain fees and charges; and
• ordering that the practitioner pay all or part of the costs incurred by the complainant or the investigating body in relation to the investigation.

The South Australian system

5.6 In South Australia the Legal Practitioners Conduct Board investigates complaints (in relation to conduct issues only) and lays charges, while the Legal Practitioners Disciplinary Tribunal takes disciplinary action against practitioners found to have engaged in unsatisfactory or unprofessional conduct.⁸ This division of functions was made clearer by amendments introduced in 1998.⁹ The 1998 amendments gave the Board a limited jurisdiction in relation to “relatively minor” matters. Like Western Australia,

the Board’s jurisdiction requires the consent of the practitioner, thereby emphasising the distinction between the roles of the two bodies.¹⁰ The powers that may be exercised, with the practitioner’s consent, include:¹¹

• issuing a reprimand;
• making an order imposing conditions on the practitioner’s practising certificate that relate to the practitioner’s legal practice or require the practitioner to undertake further education, training or counselling;
• ordering payment to a specified person; and
• ordering that the practitioner “refrain from doing a specified act in connection with legal practice”.

Proposals made in submissions

5.8 Some proposals discussed in this chapter would allow the LSC and Councils to make orders (without consent) that would be enforceable against practitioners who have been complained against. These include:

• orders for compulsory mediation;
• reprimands without consent;
• orders for compensation; and
• enforceable undertakings.

DEALING WITH CONDUCT ASPECTS OF A COMPLAINT

5.9 The following powers are available to the LSC and Councils for dealing with the less serious conduct aspects of a complaint:

• dismissal on the grounds of previous good record; and
• imposition of a reprimand.

5.10 The LSC or Councils may dismiss a complaint because of a practitioner’s previous good record even though they are satisfied that there is a reasonable likelihood that the Tribunal will find that a practitioner has engaged in unsatisfactory professional conduct (but not professional misconduct). There must also have been no other material complaints against the practitioner if the complaint is to be dismissed for this reason.¹⁵

5.11 This provision, however, is inadequate in two ways. First, it does not expressly require that consideration be given to the seriousness or otherwise of the alleged unsatisfactory professional conduct. The dismissal of a complaint on the grounds of a practitioner’s previous good record might be inappropriate where the circumstances of the alleged unsatisfactory professional conduct are very serious. Dismissals in inappropriate cases could be seen as being too lenient on practitioners.¹⁶ Secondly, the provision does not expressly require that any record be kept of such dismissals. This means that the Councils and LSC may not have reliable records to assist in determining whether a practitioner has a good record or not.

5.12 The only other jurisdiction in Australia with a comparable provision is the Northern Territory. The Law Society of the Northern Territory may:

Where it finds a complaint proved, but is of the opinion that it is justified in doing so having regard to the circumstances of the case and the record of the legal practitioner against whom the complaint was made, record the finding but take no further action in the matter.¹⁷

5.13 The Commission believes that it is appropriate that the Councils and LSC retain the power to dismiss a complaint involving possible unsatisfactory professional conduct without referring it to the Tribunal so long as it is a minor matter. This is desirable for the sake of the efficiency of the system. Only 24 matters were referred to the Tribunal in 1999/2000. If matters currently dismissed by the LSC and Councils on the grounds of previous good record were also required to be determined by the Tribunal, this would lead to an effective doubling of matters that the Tribunal would have to deal with in any given year.¹⁸

5.14 When the LSC or Councils find that there is a reasonable likelihood that a practitioner has engaged in unsatisfactory professional conduct (but not professional misconduct), the LSC and Councils should continue to be able to dismiss the complaint on the grounds of the practitioner’s previous good record (provided there have been no other material complaints against the practitioner). However, in doing so, the LSC and Councils must have regard to the circumstances of the case (which will include a consideration of the seriousness of the conduct) and keep a record of any such finding so that assessments of a practitioner’s previous record can be made in future.

5.15 Reviews of a decision to dismiss a complaint on the grounds of the previous good record of a practitioner are dealt with later in this chapter.¹⁹

Recommendation 16

In deciding to dismiss a complaint under s 155(3)(b) of the Legal Profession Act 1987 (NSW) on the grounds of a practitioner’s previous good record, the Legal Services Commissioner or relevant Council should also, in making their decision, have regard to all the circumstances of the case and be required to record their decision.

5.16 The LSC and Councils can reprimand practitioners in certain circumstances.²⁰ Reprimands can only be issued where the LSC or relevant Council, after completing an investigation into a complaint, is satisfied that there is a reasonable likelihood that the practitioner will be found guilty of unsatisfactory professional conduct, but not professional misconduct. The practitioner must consent to the reprimand. While some complainants may generally be satisfied with the issue of a reprimand against a practitioner, the utility of reprimands lies in their ability to enforce standards of conduct that should be adhered to by practitioners.

5.17 In Issues Paper 18 (“IP 18”) the Commission asked whether, and in what circumstances, the LSC and Councils should be given the power to impose reprimands on practitioners without their consent (Issue 29). The Commission also asked whether the power could also apply to instances of professional misconduct of a “less substantial nature”.

5.18 Some submissions supported the power to reprimand a practitioner but argued against the requirement that the practitioner must consent.²¹ It was argued that the consent requirement defeated the purpose of a disciplinary system.²² The Law Society supported the availability of the power of reprimand both with and without consent (with a right to have the decision reviewed by the Tribunal).²³ The Bar Association supported the availability of reprimands without consent provided they were restricted to the Councils and not exercised by the LSC (unless exercised as part of a review of an earlier Council decision) given that there are currently no provisions allowing for a review of decisions of the LSC.²⁴

5.19 One argument for retaining the consent requirement is to preserve some distinction between the roles of the Tribunal and the LSC and Councils. The Victorian Legal Ombudsman pointed out that the LSC would be exercising what amounted to judicial power in imposing reprimands unless the practitioner consented. The only appropriate course, once a finding of unsatisfactory professional conduct is found to be reasonably likely, would be to institute proceedings before the Tribunal.²⁵ The Bar Association also proposed that if a practitioner does not consent to a reprimand the only course of action available should be to refer the matter to the Tribunal for determination.²⁶

5.20 It has already been noted that in 1999/2000 only 24 matters were referred to the Tribunal. If all matters currently subject to a reprimand (with the consent of the practitioner) were to be referred to the Tribunal, approximately 42 additional matters²⁷ would be brought before the Tribunal each year, an increase of close to 200% of the Tribunal’s current case load. This is a strong reason for maintaining the option of the investigative bodies’ power to issue a reprimand with respect to unsatisfactory professional conduct.

5.21 However, the Commission considers that the current requirement that the practitioner consent before a reprimand can be issued should be dispensed with. Clearly a reprimand should be available in appropriate cases of unsatisfactory professional conduct whether the practitioner consents or not.

5.22 Reviews of decisions to impose a reprimand are discussed later in this Chapter.²⁸

Recommendation 17

When the Legal Services Commission or relevant Council is satisfied that there is a reasonable likelihood that a practitioner will be found guilty of unsatisfactory professional conduct (but not professional misconduct) they should be able to impose a reprimand without the practitioner’s consent.

5.23 The Commission considers that consumer aspects of a complaint should be dealt with by the LSC, while conduct issues should continue to be dealt with by either the LSC or the relevant Council. When investigating a complaint, the Councils should be able to refer consumer aspects of a complaint back to the LSC. Of course, the LSC’s ability to deal with consumer issues effectively will depend in part on the availability of adequate resources.

5.24 The following sections deal with the powers that may be appropriate for the LSC to exercise in dealing with the consumer aspects of a complaint:

• referring a matter to mediation;
• requiring a practitioner to enter into an enforceable undertaking; and
• awarding compensation.

5.25 The LSC currently has no power under Part 10 to require the parties to a complaint to attend mediation.²⁹ In IP 18 the Commission asked whether the LSC should be given a power to compel the parties to a complaint to attend a mediation session (Issue 32).

5.26 It is generally agreed that conciliation or mediation is not an appropriate way to resolve conduct issues. The Law Society does not support compulsory mediation in relation to matters that could be construed as conduct matters on the grounds that this is not the means by which the public could be protected or practitioners disciplined.³⁰ The Victorian Legal Ombudsman supports a power to compel parties to attend a compulsory mediation conference only in relation to consumer issues on the grounds that it would not be appropriate to mediate conduct matters.³¹ A similar view has been reached in relation to the South Australian system:³²

A “successful” conciliation only resolves the issues between the complainant and practitioner. It does not, and cannot, interfere with the function of the Committee to deal with the issue of unprofessional conduct according to the Act. Whether or not the parties reach an agreement, the Committee’s investigation of any unprofessional conduct continues. Conciliation and investigation are not mutually exclusive.³³

5.28 The Bar Association, while acknowledging the need to keep disciplinary considerations separate from those relating to the mediation of a consumer dispute,³⁵ also supported the relevant Council having the power to order a confidential process of mediation to see if a speedy, informal and fair resolution of a complaint could be arrived at before making a decision to refer to the Tribunal. The Council could then, depending on the circumstances of the case, decide to dismiss the complaint on the grounds that either the differences between the complainant and the practitioner had been resolved or that the complainant had declined to take part in the mediation.³⁶

5.29 The Commission considers that mediation is not an appropriate way to resolve conduct issues, particularly given that the general purpose of the disciplinary system is the protection of the public.

Nature of “mediation” in the current system

5.30 Mediation of consumer disputes is currently dealt with under Division 4 of Part 10. However, the term “mediation” is very broadly defined for the purposes of Part 10 and encompasses aspects of dispute resolution that would not usually be considered as “mediation”. The types of dispute resolution encompassed by the term “mediation” in Part 10 can be divided into two broad categories:

• informal complaint resolution; and
• formal mediation.

extends to encompass preliminary assistance in dispute resolution, such as the giving of informal advice designed to ensure that the parties are fully aware of their rights and obligations and that there is full and open communication between the parties concerning the dispute.

through conciliation and mediation, for example by brokering a satisfactory compromise between the complainant and the practitioner in a series of letters and/or phone calls.³⁷

5.32 Formal mediation. Formal mediation usually involves a face to face meeting of the parties to a dispute with a mediator. This is the form of mediation envisaged by several provisions in Part 10, for example, the requirement that the LSC is to maintain a list of mediators to deal with consumer disputes³⁸ and requirements as to the confidentiality of the mediation process.³⁹ In 1999/2000 only eight formal mediations were arranged by either the LSC or the Councils.⁴⁰

5.33 The recommendations in this part of the Report relate only to the future use of formal mediation.

Compulsory mediation

5.34 Some submissions generally supported the availability of a power to make parties to a consumer dispute attend mediation.⁴¹ For example, the OLSC argued that, if used in appropriate cases, mediation:

• may provide a tangible outcome for consumers whose complaints may not otherwise be adequately dealt with by the system;
• can be an educative tool in helping both practitioners and complainants to understand the others’ positions; and
• may be an effective way of filtering issues that may disclose grounds for further disciplinary proceedings.⁴²

5.36 The value of compulsory attendance at mediation has received some consideration by the courts in New South Wales. In 1992 Justice Giles considered the arguments for and against:

Conciliation or mediation is essentially consensual and the opponents of enforceability contend that it is futile to seek to enforce something which requires the co-operation and consent of a party when co-operation and consent can not be enforced; equally, they say that there can be no loss to the other party if for want of co-operation and consent the consensual process would have led to no result. The proponents of enforceability contend that this misconceives the objectives of alternative dispute resolution, saying that the most fundamental resistance to compromise can wane and turn to co-operation and consent if the dispute is removed from the adversarial procedures of the courts and exposed to procedures designed to promote compromise, in particular where a skilled conciliator or mediator is interposed between the parties. What is enforced is not co-operation and consent but participation in a process from which co-operation and consent might come.⁴⁴

5.38 There are clear advantages if the parties ordered to attend mediation are able to conclude the mediation successfully, especially since there may be greater costs to the legal system if more formal court or tribunal proceedings are pursued. However, there is also the question of whether there are adequate resources available to the OLSC to administer a system of mediation that is used more often than the current one because the parties can be ordered to attend. While the Commission can recommend what it sees as the most appropriate legal structure for dealing with consumer disputes with legal practitioners, ultimately it is a matter for government whether it chooses to make the resources available.

5.39 Section 92 of the Anti-Discrimination Act 1977 (NSW) has been suggested as a model for a power that might be included in Part 10.⁴⁵ The President of the Anti-Discrimination Board can require the parties to a complaint to attend a conciliation conference and failure to comply is an offence. Section 92 provides:

(1) Where the President is of the opinion that a complaint … may be resolved by conciliation, the President shall endeavour to resolve the complaint by conciliation.

(2) The President may, by notice in writing, require the complainant and the respondent, or either of them, to appear before the President, either separately or together, for the purpose of endeavouring to resolve the complaint by conciliation.

(3) A person shall not fail to comply with the terms of a notice under subsection (2).

5.41 Who should conduct a compulsory mediation? One submission suggested that the conciliator in each case be a senior practitioner who is familiar with the type of practice conducted by the practitioner against whom the complaint has been made.⁴⁶ However, some consumers may not be comfortable with a mediation conducted by members of the legal profession and may prefer a more neutral mediator. The Commission acknowledged this in Report 70.⁴⁷ The Commission also noted that in some cases, for example disputes about discourtesy or poor communication, a mediator with a legal background would not be necessary to the proceedings, whereas in others, an understanding of the operation of a legal practice might be highly desirable. In such circumstances the Commission suggested that perhaps an academic lawyer, retired judge, government lawyer, or some other lawyer who is not readily associated with the interests of the professional associations, could act as a mediator.⁴⁸ However, no specific recommendation was made except that lists of mediators be maintained by the professional associations and that they could contain both lawyers and non-lawyers.⁴⁹ The Commission now also notes that the mediation could be conducted by a member of the staff of the OLSC.

Recommendation 18

Formal mediation of consumer disputes should continue to be permitted and the Legal Services Commission should be able to order mediation in appropriate cases. The mediation should be conducted by such persons as the Legal Services Commission considers appropriate and failure to comply with an order for mediation, without reasonable excuse, should amount to professional misconduct on the part of a practitioner.

5.42 Another submission suggested that a consumer matter could be referred to an arbitrator upon the failure of a mediation conducted by the LSC.⁵⁰ However, the Commission is not convinced, at least on the grounds of efficiency and the availability of resources, that an extra stage of enforceable arbitration is currently desirable following the failure of a mediation. There are other avenues that can be pursued if a mediation fails to resolve a consumer dispute.

5.43 Consumer issues that are unsuccessfully mediated will most likely be either:

• issues relating to the payment or repayment of fees; or
• issues relating to the satisfactory completion of legal work.

Recommendation 19

Upon failure of a mediation, the mediator should certify that mediation has failed. This certification may be used as evidence that mediation has been attempted should mediation be a required stage in the bringing of the matter before another appropriate body.

5.45 Satisfactory completion of legal work. There are three circumstances to be considered when a dispute about the satisfactory completion of legal work is not successfully mediated. The first is where both consumer and conduct issues have been identified at the beginning of the process. Mediation of the consumer aspect, whether successful or not, can have no effect on the conduct aspect which must, in any case, continue to be investigated by the LSC or Councils.⁵¹

5.46 The second circumstance is where conduct issues are identified in the course of a mediation. Whether the mediation is successful in relation to the consumer issue or not, the mediator may refer to the conduct issue to the appropriate Council and the LSC.⁵²

5.47 Finally, the failure by a practitioner to remedy unsatisfactory legal work following a mediation may amount to unsatisfactory professional conduct.

5.48 While the matters that arise in a mediation in the circumstances outlined above should remain confidential, there is nothing to prevent the LSC and Councils from fully investigating the conduct issues. The LSC and Councils will still have the material from the original complaint and the practitioner’s responses on which to base any further investigation and possible reference to the Tribunal. No recommendation is required to give effect to these arrangements as the procedures are already in place in the current system.

Enforceable undertakings

5.49 The resolution of many consumer or conduct complaints by the Councils and the LSC may involve practitioners agreeing to take specific steps, such as transferring a file or lodging court documents.⁵³ In this context, the undertakings entered into are designed to resolve a particular consumer dispute and require the agreement of the practitioner in question. Such agreements usually result from some form of mediation (formal or informal) either between the practitioner and the LSC or Councils, or between the practitioner and the complainant. There is said to be, at present, no effective mechanism for the enforcement of such agreements.⁵⁴ In IP 18 the Commission asked whether the LSC and Councils should be given the power to enter enforceable undertakings with practitioners in relation to complaints (Issue 27).

5.50 An example of such a power can be found in s 87B of the Trade Practices Act 1974 (Cth) which provides that the Australian Competition and Consumer Commission (ACCC) may accept a written undertaking in connection with its functions. The undertaking may only be varied or withdrawn with the consent of the ACCC. If the ACCC considers that the terms of an undertaking have been breached, it can apply for a court order requiring compliance or ordering compensation.

5.51 It is well established that legal practitioners who fail to carry out undertakings to other practitioners in the course of their legal work may be proceeded against in a number of ways:⁵⁵

• by disciplinary proceedings for professional misconduct;
• by use of the summary jurisdiction of the Supreme Court to compel practitioners to comply with undertakings; and
• by the jurisdiction of the courts to enforce legally binding obligations, for example, those arising under contract law or statute.

Recommendation 20

That express provision should be made that the failure to carry out an undertaking to a Council or the Legal Services Commissioner may amount to professional misconduct or unsatisfactory professional conduct.

5.53 The power to award compensation is a way of resolving individual consumer disputes where the consumer has suffered some monetary loss. While compensation orders may be made as part of the mediation of consumer disputes,⁵⁶ or by the Tribunal,⁵⁷ the LSC and Councils do not currently have any enforceable power to order practitioners to pay compensation to complainants.

5.54 Other options for a complainant seeking compensation are to bring civil proceedings against the practitioner, either in a court or in the Fair Trading Tribunal (Consumer Claims Division), or to apply to the Fidelity Fund.⁵⁸ These options, however, may not be favoured by many lay complainants given the cost and complexity involved.⁵⁹

5.55 In IP 18 the Commission asked whether the LSC should be given power to order practitioners to pay compensation to complainants (Issue 28). The Commission also considered possible restrictions on the exercise of that power, for example, by setting a statutory maximum amount of compensation.

5.56 Some submissions supported giving the LSC the power to order compensation for reasons that included:

• some complainants do not have the resources to pursue compensation through other channels;⁶⁰
• complainants have sometimes already lost faith in the legal system and are therefore averse to the idea of having to hire another lawyer to take further legal action to recover damages;⁶¹
• some complainants may seek a relatively small amount in compensation compared to the time and expense involved in pursuing it through traditional channels;⁶²

• employed solicitors may not personally be civilly liable and should therefore not be liable to pay compensation;⁶³
• questions of compensation in individual cases should be kept separate from issues of conduct (which relate to the protection of the public and maintenance of professional standards);⁶⁴
• there are opportunities for compensation in other forums;⁶⁵ and
• the power to order compensation is like the exercise of judicial power⁶⁶ and, therefore, is not appropriate for an investigatory body like the LSC.

5.58 The Law Society supported the LSC having power to order compensation but only in relation to matters that were purely consumer matters and then only once mediation had been completed. The Society also submitted that any agreement as to payment arising from a mediation could be registered under the Local Courts (Civil Claims) Act 1970 (NSW).⁶⁷

5.59 The Bar Association proposed that compensation (up to a prescribed sum) should only be awarded in consumer disputes by an arbitrator appointed following the failure of a mediation conducted by the LSC. The arbitrator would, on their proposal, be appointed to determine all consumer issues in dispute between the parties⁶⁸ in circumstances where mediation had not resolved a dispute.⁶⁹

5.60 On the other hand, the OLSC proposed that the LSC should have power to award compensation in consumer disputes.⁷⁰ The OLSC also proposed that a limit should be imposed on the granting of compensation, namely $25,000, the current jurisdictional limit for the Consumer Claims Division of the Fair Trading Tribunal, that an order for compensation should be registered with a local court, and that the LSC’s jurisdiction to award compensation be subject to an appeal to the Tribunal.⁷¹

5.61 The Commission does not consider it desirable to impede or complicate the LSC or Council’s investigative role by requiring them to consider compensation in individual cases.⁷² Under the current structure, compensation as a consumer issue is more appropriately dealt with in other ways. It may, for example, be agreed upon following either formal or informal mediation of a consumer dispute or it may be taken up in an appropriate alternative forum – either the Fair Trading Tribunal (Consumer Claims Division) or one of the courts.

5.62 There may, however, be a bar to the consideration of some matters before the Fair Trading Tribunal. Section 7(5) of the Consumer Claims Act 1998 (NSW) provides that:

A matter arising in relation to the fairness or reasonableness of the costs charge by a barrister or solicitor for an item of business transacted by the barrister or solicitor is not within the jurisdiction of the Tribunal.

Recommendation 21

That it be made clear in legislation that the exception in s 7(5) of the Consumer Claims Act 1998 (NSW) applies only to matters that can be referred to costs assessment under Part 11 of the Legal Profession Act 1987 (NSW).

5.63 A number of submissions expressed concern that the investigative process might, in some cases, reveal conduct which constitutes an offence under the criminal law or other statutes and that this conduct was not being brought to the attention of the relevant authorities.⁷⁵

5.64 In South Australia the Legal Practitioners Act 1981 (SA) provides that the Legal Practitioners Conduct Board must, in the course of, or at the conclusion of an investigation:

report any suspected unprofessional conduct that would constitute an offence to all relevant law enforcement and prosecution authorities.⁷⁶

5.65 The Commission considers that there is sufficient public concern about the accountability of legal practitioners to the general laws that govern society⁷⁷ to justify the inclusion of an express provision along the lines of the South Australian provision. The Commission would prefer the New South Wales provision to refer to “any relevant law enforcement or prosecution authority” and considers that this would include authorities such as the Australian Securities and Investments Commission and the Australian Taxation Office. The investigation and referral to the Tribunal of matters relating to professional misconduct or unsatisfactory professional conduct could continue notwithstanding the referral of matters to other relevant authorities.

Recommendation 22

That the Legal Services Commissioner and Councils must, if during the course of an investigation they discover conduct of a legal practitioner that would constitute an offence, refer the conduct to any relevant law enforcement or prosecution authority. This referral to another authority would not prevent questions of professional misconduct or unsatisfactory professional conduct continuing to be dealt with under Part 10.

5.66 This section relates to costs assessment issues where they arise within the context of Part 10. Under the costs assessment regime established by Part 11 of the Legal Profession Act 1987 (NSW), legal practitioners are required to disclose to clients an estimate of the likely costs of services provided, including revised disclosure of any significant increases in costs.⁷⁸ The Commission has received a number of other submissions in relation to legal costs.⁷⁹ Indeed, a substantial number of complaints received by the LSC relate to the failure of practitioners to advise their clients of significant increases in estimated costs.⁸⁰ However, since costs assessment is regulated by Part 11 any fundamental changes to the costs assessment regime cannot be considered within the Commission’s current terms of reference.

Time limit for referral

5.67 The LSC and Councils can refer complaints for costs assessment.⁸¹ Under Part 11, applications for costs assessment must be made within 12 months after the bill was given to the complainant.⁸² In IP 18 the Commission asked whether the time limit for costs assessment should apply to matters referred to costs assessors by the LSC or Councils (Issue 30).

5.68 Some submissions argued that the time limits for costs assessment should not apply to matters referred to costs assessors by the LSC or Councils.⁸³ One submission supported the extension of the time limit for costs assessment to the completion of a complaint.⁸⁴ Others rejected any extension of the time limit in relation to costs matters referred by the LSC or Councils on the following grounds:

• the Act currently applies time limits in relation to bringing matters to a costs assessor and these should not be circumvented by making a complaint to the LSC;⁸⁵
• intertwining disciplinary questions with disputes about assessments of costs would be detrimental to both procedures;⁸⁶ and
• twelve months is an adequate time for a client to seek to have a bill assessed.⁸⁷

5.70 The Commission also considers that practitioners should be required to inform clients of their general rights to seek review of a bill of costs. This should be done by practitioners including on the bill of costs a general statement about the avenues for review, contact details and time limits for review. Failure to comply with this requirement should be capable of amounting to unsatisfactory professional conduct.⁸⁸ However, as bills of costs are regulated by Part 11 of the Legal Profession Act 1987 (NSW) which is outside the scope of this reference, and as the Commission has not consulted on this question, the Commission recommends that further consideration be given to including this requirement in Part 11.

Recommendation 23

The Legal Services Commissioner and Councils should be able, in their discretion, to refer a matter to costs assessment outside of the usual 12 month period in circumstances where the complainant was not previously aware of a right to request a costs assessment. Such a reference to costs assessment must be made within six months of the complainant becoming aware of his or her right to request a costs assessment.

Recommendation 24

1. Consideration should be given to requiring practitioners to include on the bill of costs a general statement about the avenues for review, contact details and time limits for review.

2. Consideration should also be given to making failure to comply with this requirement capable of amounting to unsatisfactory professional conduct.

5.71 There is no provision in Part 10 for the LSC to refer a complaint to a costs assessor when the LSC is reviewing the decision of a Council.⁸⁹ This means that in order to refer a complaint to a costs assessor in the course of a review, the LSC must first re-investigate the complaint. In IP 18 the Commission asked whether the power of the LSC to refer complaints to a costs assessor should also apply when the LSC is conducting a review of a complaint initially dealt with by a Council (Issue 31).

5.72 Some submissions generally supported giving the LSC the power to refer complaints to a costs assessor when conducting a review of a complaint initially dealt with by a Council.⁹⁰ Others did not think that a power to refer to costs assessment should be used as a means of circumventing time limits that are otherwise imposed on clients by the Act.⁹¹

5.73 The Bar Association suggested that if a person with expertise as a costs assessor were required to assist in investigating a complaint, that person could probably be retained for that purpose within the context of Part 10 without the need to invoke Part 11 procedures.⁹²

5.74 Assuming that the time limit provisions⁹³ are adhered to, there seems to be no reason why the LSC should not, when reviewing a decision of one of the Councils, have the power to refer a matter to costs assessment.

Recommendation 25

The Legal Services Commissioner should, when reviewing a decision of one of the Councils, be able to refer a matter to costs assessment but only if the time limits otherwise prescribed in relation to costs assessment are adhered to.

5.75 Complainants are entitled to have the LSC review decisions made by the Councils about conduct matters.⁹⁴ This is currently the only review mechanism available to complainants that relates to investigations and is consistent with the LSC’s role as supervisor of the complaints system. In 1999/2000 149 reviews were requested.⁹⁵ A substantial majority of reviews undertaken by the LSC confirmed the initial decision of the relevant Council.⁹⁶

5.76 In IP 18 the Commission asked whether this right to a review of Council decisions should be restricted in any way (Issue 25).

5.77 Not all decisions of the Councils following the investigative stage require review. For example, when a Council is satisfied that there is a reasonable likelihood that the Tribunal will find a practitioner has engaged in professional misconduct, the Council must refer the matter to the Tribunal for determination.⁹⁷ No review of the Council’s decision is necessary because the question of whether there has in fact been professional misconduct will be fully tested by hearing in the Tribunal. The same applies in circumstances where a Council is satisfied that there is a reasonable likelihood of a finding of unsatisfactory professional conduct and decides to refer the matter to the Tribunal rather than making use of the other available options.⁹⁸ If the Tribunal considers the referral (by the LSC or a Council) to have been inappropriate, the Tribunal can dismiss the complaint and in special circumstances order costs in favour of the practitioner.⁹⁹

Dismissing a complaint because of a practitioner’s good record or issuing a reprimand

5.78 The first group of Council decisions that may warrant review are those where a Council is satisfied that there is a reasonable likelihood that the Tribunal will find a practitioner has engaged in unsatisfactory professional conduct and decides not to refer the matter to the Tribunal but rather to:

• dismiss the complaint on the grounds of the previous good record of the practitioner;¹⁰⁰ or
• issue a reprimand.¹⁰¹

5.80 The Commission believes that the appropriate way to review such a decision is for the LSC or the practitioner affected to be able to bring the matter before the Tribunal for a full hearing of the matter. In such cases the relevant Council has already been satisfied that there is a reasonable likelihood that the Tribunal will find the practitioner has engaged in unsatisfactory professional conduct. The practitioner would have an interest in pursuing this avenue where he or she was of the view either that there was in fact no relevant unsatisfactory professional conduct or that the imposition of a reprimand was too harsh; the LSC, as a representative of the complainant and the independent supervisor of the complaints system, would have an interest in pursuing this avenue where the LSC considered that the dismissal of the complaint or the imposition of the reprimand by the relevant Council was too lenient in the circumstances. As the independent supervisor, the LSC’s ability to bring such matters to the Tribunal is an important check on the perceived power of the professional Councils.

Recommendation 26

The Legal Services Commissioner or affected practitioner should be able to request a review of the decision of a Council to dismiss a complaint on the grounds of the previous good record of the practitioner or to impose a reprimand. The review should be by way of a full hearing before the Tribunal.

5.81 The second group of Council decisions that require review are those where a Council is satisfied that there is no reasonable likelihood that the Tribunal will find a practitioner has engaged in either professional misconduct or unsatisfactory professional misconduct. On reaching this conclusion a Council is bound to dismiss the complaint.¹⁰³ Such a decision is different to those already described in that it raises the question of whether the threshold for reference of a matter to the Tribunal has been met. The appropriate body to conduct a review of the threshold question is the LSC as the independent supervisor of the complaints system. Such a review would be at the request of a complainant who believed that a Council should have been satisfied that the threshold had been met. It would not be appropriate for other bodies such as the Tribunal or a Court¹⁰⁴ to undertake a review of such threshold questions. In any case, providing such an avenue for review of Council decisions would have serious resource implications.

5.82 In 1999/2000 528 complaints were dismissed by the Councils on the grounds that they were not satisfied there was a reasonable likelihood of a finding of either unsatisfactory professional conduct or professional misconduct.¹⁰⁵ Even the 149 reviews that were actually requested in 1999/2000¹⁰⁶ would put significant strains on the functioning of the Tribunal or a court if they were to be given the power to review Council decisions. The LSC is already charged with making decisions as to the reasonable likelihood of findings of professional misconduct or unsatisfactory professional conduct and the review of such decisions is consistent with the LSC’s role as the independent supervisor of the complaints system. There was no evidence available to the Commission that suggested this supervision was inadequate.

5.83 The Bar Association submitted that the review should involve a fresh consideration of the complaint against the practitioner, that is, it should not be reliant only on the material that was originally before the relevant Council.¹⁰⁷ The Bar Association also suggested that the LSC should not be obliged to conduct any particular form of hearing for the purpose of conducting the review.¹⁰⁸ The Commission agrees that, as the independent reviewer of the conclusions of the Councils, the LSC should be able to conduct the review in such manner as it thinks fit.

Recommendation 27

Complainants should have the right to seek a review when a Council is satisfied that there is no reasonable likelihood that the Legal Services Division of the Administrative Decisions Tribunal will make a finding of professional misconduct or unsatisfactory professional conduct. Such a review should be conducted by the Legal Services Commissioner and in such manner as the Legal Services Commissioner considers appropriate.

Limiting the right to seek review

5.84 Should any limits be placed on the right to review these Council decisions? Some submissions supported restricting the right to seek a review by the LSC of a Council decision by various means including:

• requiring the payment of a small fee for the conduct of the review;¹⁰⁹
• requiring that the complainant provide a reason for seeking the review;¹¹⁰
• allowing the LSC to dismiss summarily an application for review that does not disclose a ground for reconsideration;¹¹¹ and
• deeming an application for review that is not determined within a specified time limit to have been dismissed (unless the LSC, on notice to all relevant parties, otherwise determines).¹¹²

5.86 The Commission does not believe that there should be any restrictions on the right to seek review by the LSC when Councils are satisfied that there is no reasonable likelihood of a finding of either unsatisfactory professional conduct or professional misconduct. Review by the LSC of such Council decisions is an important part of the LSC’s role as supervisor of the current complaints system. It is particularly important because it satisfies complainants that the matter has been examined by a body that is independent of the professional associations. This independent supervisory function performed by the LSC also provides the rationale for there being no avenue of review against decisions of the LSC when the LSC decides to retain an investigation rather than referring it to the relevant Council.¹¹⁴

1. Except for the decision to refer a complaint to the Tribunal, which is dealt with in Chapter 3.

2. Legal Practitioners Act 1893 (WA) Pt 4.

3. Western Australia, Inquiry into the Future Organisation of the Legal Profession in Australia (Report, 1983) at 63.

4. Western Australia, Inquiry into the Future Organisation of the Legal Profession in Australia (Report, 1983) at 83.

5. Legal Practitioners Act 1893 (WA) s 28A.

6. Legal Practitioners Act 1893 (WA) s 28A(5). Presumably the right could be exercised by a complainant or professional association, there being no apparent reason why the practitioner would want to.

7. Legal Practitioners Act 1893 (WA) s 28B.

8. Legal Practitioners Act 1981 (SA) Pt 6. See also South Australia, Parliamentary Debates (Hansard) House of Assembly, 3 June 1998, the Hon M H Armitage, Minister for Government Enterprise, Second Reading Speech at 1069.

9. Legal Practitioners (Miscellaneous) Amendment Act 1998 (SA). See C Cocks, “Act Changes Lawyer Discipline” (1999) 21(9) Bulletin (The Law Society of South Australia) 20.

10. Legal Practitioners Act 1981 (SA) s 77AB(1).

11. Legal Practitioners Act 1981 (SA) s 77AB(1)(c)-(e).

12. Legal Practitioners Act 1981 (SA) s 77A(5)(b).

13. Legal Practitioners Act 1981 (SA) s 77B.

14. Legal Practitioners Act 1981 (SA) s 77B(6).

15. Legal Profession Act 1987 (NSW) s 155(3)(b).

16. See B Barac, Submission at 1.

17. Legal Practitioners Act (NT) s 47(1)(ba).

18. Twenty two such dismissals occurred in 1998/1999.

19. Para 5.78-5.81.

20. Legal Profession Act 1987 (NSW) s 155(3)(a).

21. C P Wall, Submission at 8; F Combe, Submission at 11.

22. B Barac, Submission at 2; NSW Legal Reform Group, Submission at 9.

23. Law Society of NSW, Submission at 14-16.

24. NSW Bar Association, Submission at 47.

25. Victorian Legal Ombudsman, Submission at 47.

26. NSW Bar Association, Submission at 43.

27. In 1998/1999 42 reprimands were issued: OLSC, Annual Report 1998/1999 at 11, 57, 58. No comparable figures have been issued by the OLSC for 1999/2000.

28. See para 5.78-5.81.

29. OLSC, Preliminary Submission at 17-18.

30. Law Society of NSW, Submission at 17.

31. Victorian Legal Ombudsman, Submission at 50.

32. See Legal Practitioners Act 1981 (SA) s 77B.

33. I Nicholls, “Complaints: Are They Negotiable?” (1996) 18(4) Bulletin (The Law Society of South Australia) 25.

34. New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report 70, 1993) at para 4.107-4.111.

35. On the basis that the private interests involved in a conciliation may conflict with the public interest considerations that govern disciplinary proceedings: NSW Bar Association, Submission at 48.

36. NSW Bar Association, Submission at 48-49. See also the Tasmanian system which provides for compulsory conferences with some of the characteristics of the Bar Association’s proposals: Legal Profession Act 1993 (Tas) s 59.

37. OLSC, Annual Report 1999/2000 at 8. A further 772 matters were resolved by the Councils through informal means: OLSC, Annual Report 1999/2000 at 29.

38. Legal Profession Act 1987 (NSW) s 146(1).

39. Legal Profession Act 1987 (NSW) s 147.

40. OLSC, Annual Report 1999/2000 at 29.

41. F Combe, Submission at 11; G Taylor, Submission at 6; C Berkemeier, Submission at 4; OLSC, Submission at 32; NSW Legal Reform Group, Submission at 9.

42. OLSC, Submission at 32. See OLSC, Annual Report 1999/2000 at 13.

43. C P Wall, Submission at 8.

44. Hooper Bailie Associated Ltd v Natcon Group Pty Ltd (1992) 28 NSWLR 194 at 206.

45. OLSC, Submission at 32.

46. A Fegent, Submission at 3.

47. New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report 70, 1993) at para 4.115.

48. New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report 70, 1993) at para 4.115.

49. New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report 70, 1993) at para 4.117.

50. NSW Bar Association, Submission at 47-48

51. Legal Profession Act 1987 (NSW) s 144(2).

52. Legal Profession Act 1987 (NSW) s 147(2).

53. OLSC, Preliminary Submission at 16-17.

54. OLSC, Preliminary Submission at 16-17. Although the Law Society does have some power to attach conditions, with consent, to a practising certificate (presumably with respect to conduct issues): Law Society of NSW, Submission at 15.

55. Wade v Licardy (1993) 33 NSWLR 1 at 6. See also Re a Solicitor (1992) 110 FLR 9 at 20 (failure to honour an undertaking to another practitioner may amount to professional misconduct).

56. The mediation of consumer disputes is dealt with in the Legal Profession Act 1987 (NSW) Pt 10 Div 4.

57. Legal Profession Act 1987 (NSW) s 171D. On the adequacy of the Tribunal’s compensation power, see IP 18 at para 6.22-6.27.

58. Established under Part 7 of the Legal Profession Act 1987 (NSW).

59. See Mr Gunay, Submission.

60. Mr Gunay, Submission; F Combe, Submission at 10; OLSC, Submission at 34.

61. OLSC, Submission at 34.

62. OLSC, Submission at 35.

63. Legal Aid Commission, Submission at 4.

64. Law Society of NSW, Submission at 15.

65. Law Society of NSW, Submission at 15.

66. Victorian Legal Ombudsman, Submission at 46.

67. Law Society of NSW, Submission at 8, 16. See Local Courts (Civil Claims) Act 1970 (NSW) s 21O concerning agreements arising from mediation; and s 71 concerning arbitration awards.

68. NSW Bar Association, Submission at 47.

69. The proposal for formal arbitration after a failed mediation is rejected at para 5.42.

70. If its proposals concerning negligence are not adopted: OLSC, Submission at 34.

71. OLSC, Submission at 35

72. The Commission reaches a similar conclusion with respect to the disciplinary role of the Tribunal at para 6.97.

73. Consumer Claims Tribunals Act 1987 (NSW) s 10(5). The Consumer Claims Tribunals Act 1987 (NSW) was repealed by the Consumer Claims Act 1998 (NSW).

74. See Legal Profession Reform Act 1993 (NSW) Sch 6.

75. NSW Legal Reform Group, Submission at 2; For Legally Abused Citizens, Submission 2 at 7.

76. Legal Practitioners Act 1981 (SA) s 77(4).

77. See also, Sydney Morning Herald (26 February 2001) at 1 and 4; (27 February 2001) at 1 and 4; and (28 February 2001) at 12.

78. Legal Profession Act 1987 (NSW) s 175 and s 177.

79. See V Morris, Submission; For Legally Abused Citizens Inc, Submission 2 at 4; OLSC, Submission at 39-40; and B Barac, Submission at 3.

80. OLSC, Preliminary Submission at 18.

81. Legal Profession Act 1987 (NSW) s 153.

82. Legal Profession Act 1987 (NSW) s 199(2) and Legal Profession Regulation 1994 (NSW) cl 25.

83. F Combe, Submission at 11. See also NSW Legal Reform Group, Submission at 9.

84. C P Wall, Submission at 8.

85. Law Society of NSW, Submission at 16.

86. NSW Bar Association, Submission at 47.

87. Victorian Legal Ombudsman, Submission at 48.

88. See also Recommendations 2 and 3 and para 3.41-3.47.

89. See Legal Profession Act 1987 (NSW) Pt 10 Div 6.

90. F Combe, Submission at 11; OLSC, Preliminary Submission Appendix at item 12.

91. Law Society of NSW, Submission at 16; Victorian Legal Ombudsman, Submission at 49.

92. NSW Bar Association, Submission at 47.

93. Legal Profession Act 1987 (NSW) s 199(2) and Legal Profession Regulation 1994 (NSW) cl 25. See also Recommendation 23.

94. Legal Profession Act 1987 (NSW) Pt 10 Div 6.

95. OLSC, Annual Report 1999/2000 at 31.

96. See OLSC, Annual Report 1999/2000 at 8 and 31; Law Society of NSW, Professional Standards Department, Annual Report 1999/2000 at 18; Law Society of NSW, Preliminary Submission Issue 6.

97. Legal Profession Act 1987 (NSW) s 155(2).

98. See Legal Profession Act 1987 (NSW) s 155(3).

99. See para 6.78 and 6.86-6.90.

100. Currently covered by Legal Profession Act 1987 (NSW) s 155(3)(b). See para 5.10-5.15.

101. Currently covered by Legal Profession Act 1987 (NSW) s 155(3)(a). See para 5.16-5.22.

102. In 1998/1999 67 unsatisfactory professional conduct matters were dealt with by the Councils and LSC without referring them to the Tribunal. Only 24 matters relating to either professional misconduct or unsatisfactory professional conduct were brought before the Tribunal in 1999/2000. See also para 5.13 and 5.20.

103. Legal Profession Act 1987 (NSW) s 155(4).

104. One submission suggested the District Court could conduct such reviews: C Wall, Submission at 7.

105. OLSC, Annual Report 1999/2000 at 29.

106. OLSC, Annual Report 1999/2000 at 31.

107. NSW Bar Association, Submission at 42.

108. NSW Bar Association, Submission at 42.

109. N R Cowdery, Submission at 3; NSW Bar Association, Submission at 42.

110. N R Cowdery, Submission at 3; NSW Bar Association, Submission at 42; Law Society of NSW, Submission at 14. The Law Society suggested that the reasons for requesting a review should be provided by way of statutory declaration.

111. N R Cowdery, Submission at 3; Law Society of NSW, Submission at 14; P Breen, Submission at 6.

112. NSW Bar Association, Submission at 42.

113. Law Society of NSW, Submission at 14.