Practice
Management
Course
Ethics and Responsibility
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Revision information
Version 1.0 – December 2013
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Table of contents
1.
Unit introduction ............................................................................................................................ 4
2.
Managing ethically in practice ...................................................................................................... 5
2.1
Introduction............................................................................................................................. 5
2.2
Standards of professional conduct ......................................................................................... 6
2.3
Professional standards in the context of LPA 2007 ............................................................... 8
2.4
Fitness to practise .................................................................................................................. 9
2.5
Professional misconduct and unsatisfactory professional conduct under LPA 2007 .......... 11
2.6
Legal profession rules .......................................................................................................... 18
2.7
Fitness to hold a practising certificate .................................................................................. 18
2.8
Categories of practising certificates ..................................................................................... 22
2.9
Complaints against legal practitioners ................................................................................. 23
2.10 Review: key points ............................................................................................................... 32
3.
Establishing client retainers and handling costs issues ......................................................... 33
3.1
Introduction........................................................................................................................... 33
3.2
Costing legal services .......................................................................................................... 33
3.3
Disclosure obligations of practitioner as fiduciary ................................................................ 33
3.4
Overcharging, professional misconduct and unsatisfactory professional conduct ............... 35
3.5
Costs disclosure ................................................................................................................... 37
3.6
Additional disclosure obligations – settlements and uplift fees ............................................ 39
3.7
Continuous disclosure .......................................................................................................... 39
3.8
Exceptions to disclosure obligations .................................................................................... 39
3.9
Consequences of non-disclosure .......................................................................................... 41
3.10 Recovering costs ................................................................................................................. 41
3.11 Costs agreements................................................................................................................ 41
3.12 Prohibition of contingency fee arrangements ...................................................................... 43
3.13 Billing ................................................................................................................................... 43
3.14 Costs assessment ............................................................................................................... 45
3.15 Review: key points ............................................................................................................... 46
4.
References .................................................................................................................................... 47
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1. Unit introduction
This unit is required reading as part of the QLS Practice Management Course (PMC).
Solicitors must have the knowledge and skills to act ethically and be able to demonstrate
professional responsibility and professional courtesy in all dealings with clients, courts and
tribunals, the community and each other.
In this unit you are encouraged to reflect on wider issues facing the legal profession and to
have the confidence to voice ethical concerns in practice. You are encouraged to view the
knowledge of the formal rules of conduct as only a part of professionalism. You should develop
the right instincts and feelings and show a willingness to follow both unwritten and written rules.
At the end of this unit, you will be able to:
 anticipate, identify, address and resolve ethical issues as they arise in practice
 determine the courses of action most appropriate to serve the best interests of the client,
the court, the profession, the employer, society and self
 resolve conflicts between the various duties.
In addition to this document and as part of this unit, PMC candidates are required to read:
 the Australian Solicitors Conduct Rules 2012 (provided)
 a collection of guidance notes and articles from the QLS Ethics Centre (provided).
PMC candidates are invited to review:
 additional guidance and resources on QLS Ethics Centre website at ethics.qls.com.au.
 The Legal Services Council’s Regulatory Guide 8, Billing Practices – Some Key Principles,
September 2013. The Guide is available on the LSC website.
 Information Barrier Guidelines (LIV and LSNSW) adopted by QLS Council – available on
the QLS Ethics Centre website
 ‘Guidelines for witnessing enduring documents’ (Adult guardian) - available on QLS Ethics
Centre website.
Glossary
ASCR is Australian Solicitors Conduct Rule 2012.
Commissioner is the Legal Services Commissioner.
Committee is the Legal Practice Committee.
Dictionary refers to the dictionary included in LPA 2007.
LPA 2003 is the Legal Profession Act 2003 (repealed on 1 July 2004).
LPA 2004 is the Legal Profession Act 2004 (repealed on 30 June 2007).
LPA 2007 is the Legal Profession Act 2007.
LPR is the Legal Profession Regulation 2007.
Model Bill is the Legal Profession National Bill 2011.
Practitioner refers to solicitors and barristers.
QCAT is the Queensland Civil and Administrative Tribunal.
QLS Act is the Queensland Law Society Act (repealed on 30 June 2007).
QLSAR is the Queensland Law Society Administration Rule 2005.
References to sections of legislation are to sections of LPA 2007 unless otherwise specified.
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2. Managing ethically in practice
2.1
Introduction
The individuals who make up the legal profession, and the profession itself, have
obligations to the community in relation to the law and the administration of justice.
One important aim of the PMC is to produce solicitors who have the technical
knowledge and skills necessary to manage legal practices and the necessary
professional values and attitude.
By the end of Part 2 of this unit, you will be able to:
 identify the list of statutory provisions relevant to the conduct of practitioners
 understand the key provisions of the Legal Profession Act 2007
 discuss the concepts of unsatisfactory professional conduct and professional
misconduct
 explain the principles concerning whether a person is a fit and proper person to
hold a practising certificate
 explain the meaning of a ‘show cause’ event
 explain the process for dealing with complaints against legal practitioners.
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2.2
Standards of professional conduct
The nature of the values and attitude to be demonstrated by practitioners can be
ascertained by reference to the very many judicial statements of a practitioner’s
professional duty. Moffitt P in Re B [1981] 2 NSWLR 372 at 381-2, expressed the duty
in these terms:
‘The duty is owed to the public, in that in exchange for the legal privileges which
the law confers on the barrister or on his relationship with his client, his duty in
the public interest is to conduct himself in relation to those privileges and
otherwise in a manner which will uphold the law and further its pure
administration.’
Lord Wright in Myers v Elman [1940] AC 282 at 319; [1939] 4 All ER 484 described the
lawyer’s duty as one of aiding in promoting, in his own sphere, the cause of justice.
Perhaps most succinctly, Kitto J in the High Court case of Ziems v Prothonotary of the
Supreme Court of New South Wales (1957) 97 CLR 279 at 298 described a
practitioner’s task as making successful the service of the law to the community.
As a statement of standards practitioners should aspire to meet, there is no necessary
legal consequence for a practitioner who fails to meet Kitto J’s standard. For the
profession, however, each failure to meet that standard could lead to a loss of the
privileges and ultimately loss of public confidence.
There are many binding rules, a departure from which will have a disciplinary
consequence. The claim that the legal profession is the most regulated of any
professional or business group seems to be supported by the long list of statutory
provisions relevant to the conduct of practitioners. These include:
(a) LPA 2007
(b) LPR
(c) ASCR
(d) Queensland Law Society Administration Rule 2005
(e) Queensland Law Society Indemnity Rule 2005
In addition, reference to other statutory sources, some of which have been repealed,
may be necessary because they have application to conduct occurring during the
currency of those sources or because the LPA 2007 permits practitioners to comply
with an earlier regulatory regime for a transitional period. These include:
(a) Model Bill
(b) LPA 2003
(c) LPA 2004
(d) QLS Act
(e) Queensland Law Society Rules 1987 (repealed on 30 June 2006)
(f) Legal Profession (Solicitors) Rule 2006
(g) Legal Profession (Solicitors) Rule 2007
(h) Trust Accounts Act 1973
(i) Trust Accounts Regulation 1999
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These long and complex legal rules regulating the profession are rules of conduct that
reflect basic values, such as honesty and fairness, that members of the profession are
bound to demonstrate in their dealings with clients, the courts and others. In Clyne v
Bar Assn of NSW (1960) 104 CLR 186 at 199; [1960] ALR 574, the High Court said in
this regard:
‘The rules which govern the conduct of members of a body of professional men,
such as the Bar, may be divided roughly into two classes. In the one class stand
those rules which are mainly conventional in character they are designed
primarily to regulate the conduct of members of the profession in their relations
with one another. Examples of this class in the case of the Bar are the rule which
forbids advertising, the rules with regard to retainers. A breach of any of these
rules is treated seriously, but would not warrant disbarment – at least unless it
were shown to be part of a deliberate and persistent system of conduct.
Rules of the other class are not merely conventional in character. They are
fundamental. They are, for the most part, not to be found in writing. It is not
necessary that they should be reduced to writing, because they rest essentially
on nothing more and nothing less than a generally accepted standard of common
decency and common fairness. A barrister does not lie to a judge who relies on
him for information. He does not deliberately misrepresent the law to an inferior
court or to a lay tribunal. He does not, in cross-examination to credit, ask a
witness if he has not been guilty of some evil conduct unless he has some
reliable information to warrant the suggestion which the question conveys.’
More than mere knowledge of legal rules relevant to practice is required for the ethical
practice of the law. Knowledge of the formal rules is only part of professionalism; the
right instincts, feelings and willingness at all times to follow them are equally important.
A professional person who lacks appropriate instincts and feelings lacks important
ingredients of professionalism.
Principals of legal practices have a special privilege and obligation to act as exemplars
of the profession. From your example, junior practitioners can learn a great deal about
the need for absolute integrity, for excellence in what they do, concern for the people
they serve and for proper methods in dealing with people from all walks of life.
As Kitto J pointed out in Ziems case, the people who make up the legal profession
are men and women, and not paragons of virtue, and it cannot be that every proof of
human frailty will disqualify them from their profession. An understanding of conduct
that will or may disqualify is aided by a consideration of:
 the common law concept of fitness to practise
 the statutory definitions of professional misconduct and unsatisfactory professional
conduct contained in ss. 418, 419
 the nature and content of the Legal Profession (Solicitors) Rule 2007
(now ASCR 2012)
 the statutory concept of ‘a fit and proper person to hold a practising certificate’
contained in Part 2.4.
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2.3
Professional standards in the context of LPA 2007
Before reviewing the matters in the previous paragraph, note these important features
of LPA 2007:
 LPA 2007 represents the third stage of government reform of the legal profession in
Queensland. The first and second stages of reform were in LPA 2003 and LPA 2004.
Reform has been driven by public dissatisfaction with the former regime for the
handling of complaints against practitioners and by the adoption of competition policy
principles, particularly those reflected in the development of the Model Bill, which
was agreed to by the Standing Committee of Attorneys-General. The Model Bill has
also been adopted in all jurisdictions, excluding South Australia.
 LPA 2007 preserves the inherent jurisdiction of the Supreme Court to discipline
practitioners: s 13. The court exercises its disciplinary jurisdiction where it is no
longer justified in holding the person out as a fit and proper person to be entrusted
with the duties and responsibilities of a solicitor.
 Because of the existence of specialist statutory disciplinary tribunals as part
of a complaints and discipline system, the exercise by the Supreme Court of its
inherent disciplinary jurisdiction will be rare:
Queensland Law Society v Smith [2000] QCA 109.
 The conduct and discipline provisions of Chapter 6 LPA 2004, largely reproduced in
Chapter 4 LPA 2007, represent a radical departure from the disciplinary regime
under the QLS Act.
 In respect of conduct occurring on or after 1 July 2004 a practitioner may be
disciplined for ‘professional misconduct’ or ‘unsatisfactory professional conduct’ as
defined in ss. 418, 419.
 The provisions of the QLS Act enabling a disciplinary charge to be brought in respect
of ‘malpractice, professional misconduct or unprofessional conduct or practice’
remain relevant to conduct prior to 1 July 2004.
The concept of ‘unsatisfactory professional conduct’ imposes a more demanding
standard of conduct than that comprehended by the concept of ‘unprofessional conduct
or practice’.
LPA 2003 first established the independent Legal Services Commission, replacing the
role of QLS and the Bar Association (QBA) in the prosecution of complaints against
practitioners. The Commissioner receives, manages, investigates and prosecutes
professional conduct charges against practitioners in appropriate cases.
The Commissioner has power to refer complaints against solicitors to QLS and
complaints against barristers to the QBA to investigate, to report back to the
Commissioner and to make recommendations as to whether disciplinary proceedings
should be brought.
The provisions of LPA 2004 concerning disciplinary tribunals have been reproduced in
the LPA 2007. The jurisdiction of the Solicitors Complaints Tribunal has been replaced
by two statutory bodies: QCAT, established to discipline practitioners in cases of
‘professional misconduct’ and the Committee, established to discipline practitioners in
cases of ‘unsatisfactory professional conduct’.
LPA 2007 gives QLS and QBA power to make ‘legal profession rules’ about any aspect
of legal practice including standards of conduct expected of solicitors: ss. 219, 220.
QLS has made the ASCR, which commenced on 1 June 2012.
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2.4
Fitness to practise
The ultimate disciplinary sanction is the removal of a practitioner’s name from the roll
of practitioners.
The Supreme Court has authority under LPA 2007 to admit certain natural persons as
legal practitioners. Candidates must be eligible for admission and be a fit and proper
person to be admitted to the legal profession: s. 35(2). The significance of admission is
that, from when the roll is signed, the newly qualified solicitor becomes an officer of the
Supreme Court: s 38. Once admitted, the court continues to hold the practitioner out to
the public as a fit and proper person to be a legal practitioner. The Supreme Court
retains its inherent jurisdiction to remove a practitioner’s name from the roll.
If the Supreme Court is asked to exercise its inherent jurisdiction, the enquiry is directed
to the issue of fitness. Unlike QCAT, no preliminary finding of professional misconduct
or unsatisfactory professional conduct is necessary. Of course, once QCAT makes a
finding of professional misconduct or unsatisfactory professional conduct, the Supreme
Court will need to consider whether the practitioner is a fit and proper person to remain
on the roll. In this sense, fitness is the ultimate issue in both forms of disciplinary
proceedings.
Many attempts have been made in the admission and discipline cases to define fitness
to practise. In his lecture ‘The fit and proper criterion: indefinable, but fundamental’, the
Chief Justice discusses the nature of the concept of fitness. It is possible to distil these
points from the Chief Justice’s lecture relevant to the concept of fitness:
1. The practice of the law is a high calling because of the significance of the law
to the community.
2. Because of the significance of the law to the community, the role of legal practitioner
demands high standards of personal probity and performance.
3. Legal practitioners have duties to the court, the client and the public and may be
regarded as unfit in any situation where a person can be said to be unsuitable to
share in the privileges and discharge the responsibilities of legal practitioners.
4. Fitness relates to the maintenance of the community’s confidence in the profession –
clients must feel confident in confiding their secrets and entrusting their most
personal affairs to practitioners and fellow practitioners must be able to depend
implicitly on the word and behaviour of their colleagues. The judiciary must have
confidence in those appearing before the courts. The public must have confidence
in the legal profession.
5. Fitness relates to character. As Moffitt P said in Re B:
‘The essential enquiry is directed to the character of the person namely
whether his character is such that he can be trusted to perform his duty as a
barrister including that performed when what he does is unlikely to be subject
to scrutiny. Reputation is also a relevant factor because the effectiveness of
the law depends materially upon the confidence of the public in the due
administration of it.’
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Similarly, in Young [2001] QCA 556, the court observed:
‘The references and the psychiatric report suggest that the respondent is well
thought of by friends and workmates and has innate qualities upon which she
could build if the predicted outcome of treatment occurs. As against this, the
respondent demonstrated before the Shepherdson Inquiry, conduct of a kind that
is the antithesis of what the authorities require of a barrister. There is authority
that it is the intrinsic character of the person under inquiry that should be the focal
point. In Re Bell (Full Court, Motion 622 of 1991, 6 December 1991, unreported),
Williams J said that what is in issue is the person’s intrinsic character, not
necessarily his or her good fame either within the profession or the community
at large.’
Closely related to the issue of fitness to practise is the notion of protection of the public.
Generally, it is said that the object of disciplinary proceedings and the orders made in
those proceedings is not the punishment of the practitioner but rather the protection of
the public. In Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42,
for example, de Jersey CJ said:
‘The court cannot hold out, as fit to practise, a person who has trespassed
to this extent beyond the boundary of ethical probity. The respondent’s
consciously misleading the court in the probate application of itself probably
warranted his being struck off. Adding in the other breaches, encompassing
both dishonesty and recklessness, the case for striking off is seen to be
compelling. That no client ended up out of pocket is of no or little relevance.
While in light of the respondent’s personal circumstances then and now,
the result will, for him and his family, regrettably be hard and sad, this court,
protecting the public, cannot at this stage confidently present the respondent
as someone on whom the client and the court may rely for undoubted
honesty, independent judgment and the efficient disposition of his work, and
the court could not now be confident that after a two year suspension, that
position would obtain.’
An enquiry as to fitness to practise is not confined to protection of the public from
further defaults by the practitioner the subject of the enquiry. The protection is
against further wrongdoing by the practitioner and from defaults by other legal
practitioners. As Moynihan J said in Legal Services Commission v Michael Vincent
Baker [2005] LPT 002:
‘Dealing with such cases is designed to take into account the need to set
standards and deter practitioners from departing from them. It publicly marks
disapproval of a departure from proper professional standards, so reinforcing
the basis of public confidence in the profession.’
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One consequence of the court’s view that it exercises a protective rather than
disciplinary function is that evidence of past hardship, or hardship which would be
occasioned by the making of such an order, is irrelevant to the determination of
whether such an order should be made. See the observations the Chief Justice in
Wakeling quoted above. Note also the observations of the High Court in New
South Wales Bar Assn v Evatt (1968) 117 CLR 177 at 183:
‘The Supreme Court was, however, in error in not appreciating that its findings
of misconduct demonstrated the unfitness of the respondent to be a barrister,
and compelled the conclusion that he should be disbarred. The facts proved and
found demonstrated unfitness to be a member of the Bar – not some isolated or
passing departure from proper professional standards amounting to something
less than proved unfitness. The Court did regard certain matters as extenuating
circumstances but none of them really bears upon the vital issue viz whether the
findings of misconduct, which were made, proved the unfitness of the respondent
to be a barrister. The Supreme Court thought, moreover, that as the exercise of
its disciplinary powers was, to some extent, a punishment for wrongdoing, mercy
might be shown towards a young man who had not understood the error of his
ways. The power of the Court to discipline a barrister is, however, entirely
protective, and notwithstanding that its exercise may involve a great deprivation
to the person disciplined, there is no element of punishment involved.’
Where the circumstances fall short of demonstrating unfitness to practise,
the practitioner will not be struck off, but an appropriate penalty may be imposed.
QCAT may have regard to ‘the suitability matters’ that would be considered if the
practitioner were an applicant for admission, or for the grant or renewal of a local
practising certificate, when considering whether a person is a fit and proper person
to engage in legal practice. LPA 2007 s 9 lists suitability matters.
2.5
Professional misconduct and unsatisfactory professional
conduct under LPA 2007
LPA 2007 gives QCAT and the Committee power to discipline practitioners where
satisfied the practitioner is guilty of ‘ professional misconduct’ or ‘ unsatisfactory
professional conduct’: ss. 456 and 458. These important terms are defined in the Act.
Section 419 provides:
‘(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 legal practitioner is not a fit and proper person
to engage in legal practice.’
Section 418 provides:
‘Unsatisfactory 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 legal practitioner.’
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Having regard to the use of the word ‘ includes’, it appears that the statutory
definitions are not intended to be exhaustive of what constitutes professional
misconduct or unsatisfactory professional conduct. This is confirmed by s. 420(1),
which describes the conduct capable of being professional misconduct or
unsatisfactory professional conduct:
‘The following conduct is capable of constituting unsatisfactory professional
conduct or professional misconduct(a) conduct consisting of a contravention of a relevant law, whether the conduct
happened before or after the commencement of this section;
NoteUnder the Acts Interpretation Act 1964, section 7, and the Statutory
Instruments Act 1992, section 7, a contravention in relation to this Act
would include a contravention of a regulation or legal profession rules and
a contravention in relation to a previous Act would include a contravention
of a legal profession rule under the Legal Profession Act 2004.
(b) charging of excessive legal costs in connection with the practice of law;
(c) conduct for which there is a conviction for(i) serious offence; or
(ii) tax offence; or
(iii) an offence involving dishonesty;
(d) conduct of an Australian legal practitioner as or in becoming insolvent under
administration;
(e) conduct of an Australian legal practitioner in becoming disqualified from
managing or being involved in the management of any corporation under
the Corporations Act;
(f) conduct of an Australian legal practitioner in failing to comply with an order
of a disciplinary body made under this Act or an order of a corresponding
disciplinary body made under a corresponding law, including a failure to
pay wholly or partly a fine imposed under this Act or a corresponding law;
(g) conduct of an Australian legal practitioner in failing to comply with
a compensation order made under this Act or a corresponding law.’
Section 420(1) does not limit s. 418 or s. 419: s. 420(3).
A ‘relevant law’ is defined in the Dictionary as:
(a) LPA 2007; or
(b) a previous Act; or
(c) QLS Act as in force at any time before the commencement of this paragraph; or
(d) the Trust Accounts Act 1973 as in force at any time before the commencement
of this paragraph; or
(e) the Personal Injury Proceedings Act 2002, Chapter 3, part 1 as in force at any time
before or after the commencement of this paragraph.
Failure to comply with a legal profession rule is capable of being professional
misconduct or unsatisfactory professional conduct: s. 227.
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The terms ‘ professional misconduct’ and ‘ unsatisfactory professional conduct’
and their definitions are core uniform provisions in the Model Bill, which provides
a framework for a national legal services market. These core uniform provisions
have been adopted in Victoria: see Legal Profession Act (Vic) 2004 ss 4.4.2 and
4.4.3 and in NSW: see Legal Profession Act (NSW) 2004 ss 496 and 497.
Professional misconduct under LPA 2007
The scope of ‘professional misconduct’ under LPA 2007 is not clear, apart from the
specific matters listed in s. 419.
The way the words ‘ professional misconduct’ in the QLS Act have been interpreted
may provide a guide. Under that Act, QLS was authorised to:
‘bring a charge of malpractice, professional misconduct or unprofessional conduct
or practice against a practitioner’
in the relevant disciplinary body: s. 5J(d).
In Adamson v Queensland Law Society Inc (1990) 1 QdR 498, Thomas J said:
‘On the findings that are sustainable, it was I think, open to the statutory
committee to hold that the conduct in question amounted to professional
misconduct. The test to be applied is whether the conduct violates or falls
short of, to a substantial degree, the standard of professional conduct
observed or approved of by members of the profession of good repute and
competency.’
According to an article ‘Professional Misconduct — Unprofessional Conduct is there
a Difference’ by David Searles in the June 1992 issue of Queensland Law Society
Journal, the Queensland Full Court had, in a 1938 decision – Re B a solicitor –
adopted the definition of professional misconduct taken from Allinson v General Council
of Medical Education and Registration [1894] 1 QB 750 at 763; [1891—4] All ER Rep
768 (per Lopes LJ at 773):
‘(conduct) in pursuit of his profession which would be reasonably regarded as
disgraceful or dishonourable by his professional brethren of good repute and
competency.’
Searles suggested that Thomas J had confused the concept of professional
misconduct with the concept of unprofessional conduct, described by the Full Court
of the South Australian Supreme Court in Re R a practitioner of the Supreme
Court (1927) SASR 58:
‘In our view “unprofessional conduct” is not necessarily limited to conduct which
is “disgraceful or dishonourable”, in the ordinary sense of those terms. It
includes, we think, conduct which may reasonably be held to violate, or to fall
short of, to a substantial degree, the standard of professional conduct
observed or approved of by members of the profession of good repute and
competency.’
Searles’ interpretation gained some support from obiter comments made by Muir J in
Clough v Queensland Law Society Inc [2000] QCA 254. Despite this, the decision in
Adamson was followed in Wheeler v Queensland Law Society Inc (unreported
Queensland Full Court 26 April 1991), in Queensland Law Society Inc v Tunn [2004]
QCA 412 at [14]; in Baker v Legal Services Commissioner [2006] QCA 145 at [46]
and in Legal Services Commissioner v Mullins [2006] LPT 012 at [31].
Whichever interpretation of ‘professional misconduct’ will ultimately be accepted, it would
seem that for an act or omission to constitute professional misconduct it needs to raise
questions about fitness to practise and so must be a serious departure from standards.
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Professional conduct at common law
At common law professional misconduct is conduct related to a practitioner’s
professional activities or sufficiently connected to those activities. It might relate
to a breach of duty to the client, the courts, other practitioners or the public.
The categories and instances of professional misconduct are not closed, since
what constitutes disgraceful or dishonourable conduct, or the standard of conduct
observed or approved by members of the profession, may change over time.
Common law professional misconduct, at least of the kind described in Allinson’s
case, frequently involves an element of what is referred to as ‘moral turpitude’.
Examples are:
 stealing a client’s trust funds
 deliberate and systematic overcharging
 lying to a client
 deliberately misleading a court.
Gross negligence, particularly if accompanied by a lack of concern for the welfare
of the client, can also amount to common law professional misconduct on the Allinson
or Adamson test.
Personal misconduct amounting to professional misconduct
because of the operation of section 419(1)(b) LPA 2007
Section 419(1)(b) includes as ‘statutory professional misconduct’ conduct indicating
a practitioner is unfit to practise even though the conduct occurred other than in
connection with the practice of law.
A finding that a practitioner is unfit usually arises from some act or omission arising
out of his or her professional activities or as a result of conduct in his or her personal
capacity.
In Re A Barrister and Solicitor (1972) 20 FLR 234, after discussing the English
High Court’s disciplinary jurisdiction, the court observed:
‘Cordery says that “misconduct which makes a solicitor unfit to continue in
practice may be divided into three kinds: criminal conduct, professional
misconduct and unprofessional conduct”. This is a convenient classification, and
to some extent different considerations apply as between the three categories
mentioned. The ultimate test is however the same in all cases. What the
classification does emphasise is that conduct which justifies removal from the
rolls, or suspension, is not confined to the professional activities of a
practitioner. The courts are not concerned with conduct which does not bear
on the fitness of the practitioner to remain on the rolls, but they are concerned
with all conduct which does have such a bearing.’
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Rich J in Kennedy v Council of the Incorporated Law Institute of New South Wales (1939)
13 ALJR 563 described ‘misconduct’ in the following broad terms (at 563):
‘[a charge of misconduct relating to a solicitor] need not fall within any legal
definition of wrongdoing. It need not amount to an offence under the law.
It is enough that it amounts to grave impropriety affecting his professional
character and is indicative of a failure either to understand or to practise the
precepts of honesty or fair dealing in relation to the courts, his clients or the
public. The particular transaction must be judged as a whole and the conclusion
drawn whether it betoken unfitness to be held out by the court as a member of a
profession in whom confidence could be placed or, on the other hand although
a lapse from propriety was not inconsistent with general professional fitness
and habitual adherence to moral standards, was to be reached by a general
survey of the whole transaction.’
Both forms of misconduct can indicate unfitness but, as Fullagar J said in Ziems:
‘Personal misconduct, as distinct from professional misconduct, may no
doubt be a ground for disbarring, because it may show that the person guilty
of it is not a fit and proper person to practise as a barrister but the whole
approach of a court to a case of personal misconduct must surely be very
different from its approach to a case of professional misconduct. Generally
speaking, the latter may have a much more direct bearing on the question
of a man’s fitness to practise than the former.’
The most recent and significant decision in relation to personal misconduct is that
of the High Court in A Solicitor v The Council of the Law Society of New South Wales
[2004] HCA. In that case, the practitioner had been convicted of four counts of
aggravated indecent assault on a person under the age of 16 years contrary to
s 61M of the Crimes Act 1900 (NSW), and received a three year good behaviour
bond. The children were aged 12 and 10 at the time and were the children of a woman
with whom the practitioner had had a relationship over a period of some years. The two
subsequently married.
Disciplinary proceedings against the practitioner were commenced in the NSW
Supreme Court, relying on its inherent jurisdiction. The Court found the
practitioner’s conduct rendered him unfit and that his conduct was properly
classified as professional misconduct. His name was removed from the roll. On
appeal, the High Court considered the Supreme Court to have been error in
categorising the solicitor’s conduct as professional misconduct and in finding unfitness.
The court said:
‘Sheller JA, with whom Mason P and Giles JA agreed, said that professional
misconduct ‘ may extend beyond acts closely connected with actual practice,
even though not occurring in the course of such practice, to conduct outside the
course of practice which manifests the presence or absence of qualities which
are incompatible with, or essential for, the conduct of practice’. He took this
from some observations of Spigelman CJ in New South Wales Bar
Association v Cummins, a case in which the Court of Appeal rightly held
that the conduct in question was closely related to a barrister’s professional
activities, involving non-compliance with revenue laws affecting the earnings
from those activities. The conclusion, in Cummins, that the conduct of the
barrister amounted to professional misconduct involved no departure from
the proper meaning of the expression. However, as was observed in Ziems,
there is a real distinction between professional misconduct, and purely
personal misconduct on the part of a professional, although there are cases
in which the distinction may be difficult to apply.
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The particular aspect of the appellant’s conduct in 1997 which appeared to
Sheller JA to manifest ‘qualities of character which were incompatible with
the conduct of legal practice’ was that
‘the conduct constituted a most serious breach of trust on the
[appellant’s] part given the paternal like role he had with the victims.’
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.’
Unsatisfactory professional conduct
As noted above, the concept of ‘unprofessional conduct or practice’ under the QLS Act
was generally regarded as conduct falling short, to a substantial degree, of the standard
of conduct observed or approved of by members of the profession. The concept of
‘unsatisfactory professional conduct’, defined in s 418 as including 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 legal practitioner, is an entirely new and
different standard.
This is discussed in the Commissioner’s paper ‘Unsatisfactory professional conduct’
(Legal Services Commission, 2007):
‘The adoption of the new and almost certainly tougher benchmark implies, so it
seems to me, that the Act envisages the concept of unsatisfactory professional
conduct extending beyond the technical legal competencies practitioners are
entitled to expect of each other to the service delivery competencies
consumers are entitled to expect of any professional service provider,
including providers of legal services – and hence to embrace the sorts
of minor incompetence and neglect and poor standards of service that give
consumers less than a good or a fair deal.’
Although there is uncertainty about the ambit of the definition, note that:
 Unlike the concept of ‘unprofessional conduct or practice’ under the QLS Act, the
definition of unsatisfactory professional conduct does not require a practitioner’s
conduct to fall short of relevant standards to a substantial degree.
 Unsatisfactory professional conduct clearly includes failures in the standard of
competence and diligence that a member of the public is entitled to expect of a
reasonably competent legal practitioner, and so it is reasonable to assume that
most instances of unsatisfactory professional conduct will involve:
(a) unwarranted delay in following a client’s instructions, or
(b) other forms of neglect of the client’s interests.
Although the definition is largely concerned with appropriate standards of competence
and diligence, the use of the word ‘includes’ seems to indicate that a finding of
unsatisfactory professional conduct can arise from a breach of some other area
of professional duty.
Although a practitioner’s conduct may constitute unsatisfactory professional conduct,
disciplinary proceedings will not necessarily result. As the Legal Services
Commissioner’s Prosecution Guidelines make clear, the Commissioner will also
consider whether there is any public interest in bringing such proceedings. We consider
the Prosecution Guidelines in more detail later in this unit.
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Unsatisfactory professional conduct is a breach of standards in connection with
the practice of law.
The concept of unsatisfactory professional conduct was introduced in NSW by a
November 1987 amendment to the Legal Profession Act (NSW) 1987. Since that time,
disciplinary bodies have applied the concept to a wide range of non-competence and
diligence breaches. For example, in di Suvero v Bar Association (LSD) [2001]
NSWADTAP 9 (29 March 2001), a barrister who used insulting and offensive words
towards the bench and opposing counsel during the course of a criminal trial was
charged with unsatisfactory professional conduct. The Appeal Panel of the Tribunal
dealt with a suggestion that the use of insulting or offensive words did not raise an issue
as to competence and diligence as follows:
‘The standard set by the Act is not that of the client but that of the “reasonable
expectation of a member of the public”. One reasonable expectation of a member
of the public is, we consider, that barristers will behave in court in a way which
maintains the public interest in the administration of justice, which includes acting
in a way which accords appropriate respect to the Court. Failure to maintain the
standard could be seen as involving incompetence on the part of the barrister.’
In the same case, the Appeal Panel found that the definition of unsatisfactory
professional conduct is not exhaustive. The Panel said:
‘It seems clear from the Attorney General’s reading speech on 18 November
1987 that the legislative intention was that the new name “unsatisfactory
professional conduct” should denote the concept previously referred to as “minor
professional misconduct”. When that part quoted above of the Attorney’s speech
of 29 April 1987 is taken into account it appears to follow that the legislative
intention was that the concept now denoted as “unsatisfactory professional
conduct” was intended to extend to other matters falling short of professional
misconduct in addition to shortcomings of diligence and competence.’
Conduct deemed to be or taken to be professional misconduct
LPA 2007 contains many examples of conduct capable of being professional
misconduct or unsatisfactory professional conduct and one example of conduct
‘taken to be’ professional misconduct: s. 443(4). The operation of that section is
considered under the heading ‘ Coercive powers in relation to investigation’ later
in this unit.
Criminal conduct
For the sake of completeness, note that many contraventions of LPA 2007
constitute criminal offences. For example, any person who engages in legal practice
without holding a practising certificate is liable to a penalty of up to 300 penalty units
or two years imprisonment: s. 24(1).
Part 3.3 (Trust Money and Trust Accounts) contains a number of provisions the
contravention of which exposes a practitioner to criminal charges.
An offence under LPA 2007 is a summary offence: s. 708. Proceedings must be
commenced with one year after the commission of the offence or within six months
after the offence comes to the complainant’s knowledge but within two years after
the commission of the offence: s. 709.
Because protection of the public is the main object of disciplinary proceedings,
conviction and punishment under the criminal law is no bar to the bringing
of a disciplinary action in respect of the same matters giving rise to the
criminal charge.
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2.6
Legal profession rules
The ASCR, endorsed by the Law Council of Australia, operate in South Australia and
Queensland. The Council of the Law Society of South Australia adopted the ASCR
on 25 July 2011. The South Australian rules were amended to include three South
Australian-specific rules: 16A, 16B and 16C.
The ASCR commenced in Queensland on 1 June 2012, replacing the Legal Profession
(Solicitors) Rule 2007. A comparison table is available on the QLS website, and, as
mentioned in the introduction to this unit, the Law Council of Australia has published
commentary on its website.
The purpose of the ASCR is to assist solicitors to act ethically and in accordance with
the principles of professional conduct established by ASCR and the common law.
In considering whether a solicitor has engaged in unsatisfactory professional conduct
or professional misconduct, the ASCR applies in addition to the common law.
A breach of the ASCR is capable of constituting unsatisfactory professional conduct
or professional misconduct, and may give rise to disciplinary action by the relevant
regulatory authority, but cannot be enforced by a third party.
A solicitor’s ethical obligation is to observe the highest standards
Solicitors ought to be aware that ASCR is not the sole touchstone for determining a
solicitor’s ethical obligations. Accordingly, the commentary refers to relevant common
law and legislation. While it provides guidance on the application of various ethical
duties, it does not comprise exhaustive or extensive references to relevant common
law or legislation.
A solicitor is required to observe the higher of the standards required by ASCR and the
common law or other applicable legislation if there is a difference between them in any
jurisdiction. However, it may be that the Rules and the common law simply prescribe
different courses of action. Where that is so, Rule 2.2 does not indicate which course
the solicitor should take.
2.7
Fitness to hold a practising certificate
With limited exceptions, only ‘Australian legal practitioners’ may engage in legal
practice in Queensland: s 44(1). An ‘Australian legal practitioner’ is a natural person
who is not only admitted to the profession under LPA 2007 or a corresponding law but
who also holds a current practising certificate: s 6(1).
QLS and QBA are empowered to grant practising certificates to an Australian lawyer
authorising practise in Queensland: s. 51. The relevant regulatory authority in relation
to a person who practises or intends to practise only as a barrister is the QBA,
otherwise QLS is the relevant authority. In the context of a national profession it is worth
noting that a person who is not already an officer of the Supreme Court of Queensland
becomes an officer of the Court on being granted a local practising certificate: s 48.
QLS and QBA must consider an application for the grant or renewal of a practising
certificate, and must not grant or renew it unless satisfied the applicant is eligible to
apply and is “a fit and proper person to hold the certificate”: s. 51(4)(b).
QLS and QBA may, in considering whether a person is a fit and proper person to hold
a practising certificate, take into account the person’s suitability, any of the matters
listed in s 46(2)(a)-(f), and any other matter they consider appropriate to take into
account: s 46(2)(g).
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There was no equivalent provision in the QLS Act.
Suitability matters are set out in s. 9(1), and include criminal, financial and solvency
history, professional history, material infirmity, and capacity to undertake the inherent
responsibilities of the profession.
Immediate suspension or amendment of practising certificates
The detailed scheme for the receipt, investigations and determination of complaints
against practitioners in Chapter 4 of the LPA 2007 is considered later in this unit. It can
take considerable time for a complaint to be formulated, put to the practitioner,
investigated, heard and determined. Pending the making of orders by the disciplinary
body the practitioner is entitled to continue to practise.
In some instances an order removing the practitioner’s name from the roll is almost
certain, for example, where a practitioner has been convicted of a serious dishonesty
offence. In this case, s. 63 gives QLS and QBA the power, in the public interest, to
immediately suspend or amend a practising certificate.
Section 63(2) provides that the relevant regulatory authority may immediately suspend
a local practising certificate if:
 there is a ‘show cause’ event in relation to the practitioner
 the regulatory authority believes there is any ground mentioned in s. 60 that would
justify the suspension or cancellation under s. 61
 any other ground that the regulatory authority considers warrants suspension of the
practising certificate in the public interest.
Section 60 grounds are:
 no longer being a fit and proper person
 no longer holding professional indemnity insurance
 having engaged in practice outside what is authorised.
Conditions on practising certificates
Under s. 52 a practising certificate is issued subject to:
(a) a condition imposed by the relevant regulatory authority at the time the certificate is
granted unless the condition is revoked at a later time (for example, a condition
requiring the holder to undertake continuing legal education)
(b) a statutory condition as mentioned in s 45 (not to hold more than one current
practising certificate), s 55 (to comply with any condition imposed on interstate
admission), s 56 (to only engage in supervised practice for the relevant period) or s
57 (to give notice if convicted or charged with certain offences)
(c) a condition imposed or amended under Division 6 (amendment, cancellation or
suspension of local practising certificates) or Division 7 (special powers relating
to local practising certificates – show cause events)
(d) a condition imposed under Chapter 4 (complaints, investigation matters and
discipline) or under a corresponding law
(e) a condition imposed or amended under a regulation, the legal profession rules or the
administration rules.
A practitioner must not contravene a condition to which a practising certificate is subject:
s. 58. A contravention of s. 58 is capable of being professional misconduct or
unsatisfactory professional conduct: s. 420(1)(a).
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QLS has wide powers to impose conditions on a practising certificate. Any reasonable
and relevant condition may be imposed: s. 53(1). For example, a condition may:
(a) require the practitioner to undertake continuing legal education
(b) limit the certificate holder to supervised legal practice in the way stated in
the condition
(c) control, restrict or prohibit the operation of a trust account
(d) restrict the certificate holder to particular conditions concerning employment
or supervision.
Section 57 imposes a statutory condition requiring a practitioner to give notice of:
(a) a conviction ‘that would have to be disclosed under the admission rules for
an application for admission’
(b) being charged with a ‘serious offence’ as defined in the Dictionary.
A ‘serious offence’ is an indictable offence committed in Queensland, or an offence
against a law of another jurisdiction or of a foreign jurisdiction, which, if committed in
Queensland, would be an indictable offence in Queensland, whether or not the matter
could be dealt with summarily.
The obligation to give notice under s. 57 is a separate obligation to that contained in
Division 7 in relation to ‘show cause events’. Show cause events are considered below.
Show cause events — Part 2.4 Division 7
Following adverse media reports concerning the tax affairs and bankruptcy of a
number of high profile practitioners in NSW, the legal profession legislation in that
state was amended to require practitioners to give notice of a conviction or act of
bankruptcy and advise why the practitioner considered still considered himself or
herself to be a fit and proper person to hold a practising certificate.
The Model Bill incorporates similar provisions, which have been adopted in Part 2.4
Division 7.
A ‘show cause event’ is defined in the Dictionary as:
(a) his or her becoming bankrupt or being served with notice of a creditor’s petition
presented to the Court under the Bankruptcy Act 1966, s 43; or
(b) his or her presentation, as a debtor, of a declaration to the Official Receiver under
the Bankruptcy Act 1966, s 54A, of his or her intention to present a debtor’s petition
or his or her presentation, as a debtor, of a petition under s 55 of that Act; or
(c) his or her applying to take the benefit of any law for the relief of bankrupt or insolvent
debtors, compounding with his or her creditors or making an assignment of his or her
remuneration for their benefit; or
(d) his or her conviction for a serious offence or a tax offence, whether or not:
(i) the offence was committed in or outside this jurisdiction; or
(ii) the offence was committed while the person was engaging in legal practice as
an Australian legal practitioner or was practising foreign law as an Australianregistered foreign lawyer; or
(iii) other persons are prohibited from disclosing the identity of the offender.
A tax offence is defined in the Dictionary as an offence under the Taxation
Administration Act 1953 (Cth), whether committed in or outside the jurisdiction.
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Section 68 sets out the two requirements on a practitioner with a local practising
certificate if a show cause event happens.
First, the practitioner must, within seven days of the event, give notice to QLS or QBA
in the approved form. Then, the practitioner must give a written statement within 28
days explaining why, despite the event, the practitioner considers herself of himself to
continue to be a suitable person to hold a practising certificate.
The operation of similar show cause requirements in NSW was considered in
New South Wales Bar Assn v Murphy [2002] NSWCA 138. It is suggested that
the decision provides important guidance as to the ‘fit and proper person to hold
a practising certificate’ test in LPA 2007.
Murphy was a barrister who had become bankrupt on his own petition in October 2000
with liabilities of $325,000 including to the ATO in the sum of $315,000. He had
assets of $53,000 and had paid no tax from September 1993 to the date of his
bankruptcy. He had not previously been bankrupt and was not prosecuted for any
tax or related offence. It appears that in the 1990 financial year, his income was
substantially more than in previous and subsequent years. McClellan J, at first
instance, had accepted that he was poorly advised in relation to making an
application to vary provisional tax and that his problems were significantly related
to that advice. He attempted to meet his taxation obligations from the sale of his
remaining assets but they were insufficient to meet his liabilities. He could have
paid more tax than he did in the years after 1993. In relation to the test to be applied,
McClellan J had said:
‘In my opinion… the test which must be applied when determining fitness
to practise, in the context of bankruptcy, is whether the indebtedness which
led to the bankruptcy was brought about or associated with dishonest
conduct by the barrister. It may be dishonesty associated with not paying
tax or dishonesty associated with a failure to meet some other personal
financial obligation. Conduct which reflects incompetent management of a
person’s affairs, without the intention to avoid lawful obligations, does not
of itself justify a finding that a person is not ‘fit and proper’.’
Although the Court of Appeal agreed with McClellan J’s finding that his conduct
did not disclose he was not a ‘fit and proper person to hold a practising certificate’,
the Court of Appeal could not endorse the test applied by his Honour.
Giles JA considered that a practitioner who acted honestly could still be found
to have committed an act of bankruptcy in circumstances demonstrating that the
practitioner is not a fit and proper person to hold a practising certificate. Giles JA
drew a distinction between fitness to be a lawyer and fitness to hold a practising
certificate. Although the difference between the two concepts may not be great,
in many cases ‘the difference cannot be overlooked’. Giles JA said at 170:
‘McClellan J’s finding that there was no dishonesty does not of itself answer
the statutory test, but it is relevant to the answer ...The respondent was not
indifferent to his taxation obligations ... the respondent’s failings were not in the
probity required of a legal practitioner, but in the ability to properly order his
affairs and cope with the taxation consequences of fluctuations in income.
If the respondent were to be judged unfit to hold a practising certificate, it
would be because his failings so reflected upon his ability to act in the affairs
of his clients that protection of the public warranted cancellation of his practising
certificate. I do not think that they do. In my judgment the circumstances as
found do not reveal such deficiency of character or competence as a legal
practitioner that the respondent is not fit to practise as a barrister.’
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In Wardell v New South Wales Bar Association [2002] NSWSC 548, the Bar
Association resolved to cancel a barrister’s practising certificate following his
bankruptcy. The barrister’s financial position as disclosed in his statement of affairs
was that he had assets of approximately $193,000 and liabilities of $1,161,589. His
principal debtor was the ATO, to whom he owed $1,055,656. Cripps AJ, in the
course of dismissing the barrister’s appeal against cancellation of his practising
certificate, observed:
‘[42] In order to maintain public confidence in the Bar it is necessary, in my
opinion, for members of the Bar to recognise and abide by the ethical and
moral standards expected of people enjoying the special privileges offered by
the Bar. It is true that these standards have varied over the years. Many
years ago, the private sexual life of a person in high office (if it did not
conform with acceptable standards) was generally regarded, if it became
public, as rendering that person in the eyes of the community unfit to hold
high office. In recent years, that standard or expectation has changed. I
would suggest, however, that now it is generally recognised by most right
thinking members of the community that people have an obligation to meet
their debts, if they can, and that failure to do so over a long period of time
without any exculpating features other than that the money was spent
elsewhere would promote in the minds of right thinking people in our
community that that person was not a fit and proper person to hold a
practising certificate.
[43] I am not dealing with the consequences of an unexpected or untoward
event resulting in an indebtedness that cannot be met. What I am dealing with
is the conduct of a person who was able to pay his debts, but who elected
instead to spend money, over a long period of time, on what has been
described as “discretionary lifestyle pursuits”. In one sense, therefore, it does
not seem to be of great moment whether the money was spent on holidays in
Barbados and/or Hawaii etc or whether it was spent on pursuits within
Australia, such as gambling. As it seems to me, it does not matter so much
how the money was spent, once it is established that it was spent in pursuit
of discretionary objectives. Thus, the circumstance that Mr Wardell decided
to gamble thousands of dollars on poker machines over a long period of time
is not much different in consequence than spending a similar amount of money
on annual overseas holidays. Mr Wardell’s expenditure had the consequence,
known to him, that the money spent ceased to be available to be used to
meet his indebtedness to the ATO. Whether that was the result of expenditure
on trips to Hawaii and Barbados, luxury cars or gambling.’
2.8
Categories of practising certificates
QLS has power to make ‘administration rules’: s. 231. Administration rules may cover
a number of matters, including the types of practising certificates that may be granted
and the courses of study that are required for the grant of a practising certificate
authorising unsupervised legal practice: s. 231(2)(a)(b). The administration rules are
the QLSAR 2005.
A practitioner who holds an unrestricted principal practising certificate is entitled to
engage in legal practice on his or her own account either as a sole practitioner, a
partner or a legal practitioner director of an incorporated legal practice: QLSAR r 13(1).
A practitioner who holds a restricted principal practising certificate is entitled to engage
in practice as a partner of a law firm under the supervision of a practitioner holding an
unrestricted practising certificate but is not otherwise entitled to practise on his or her
own account: r 13(2).
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Rule 9 outlines eligibility for an unrestricted principal practising certificate. Eligibility
depends on whether the practitioner is entitled to engage in unsupervised legal
practice, has satisfactorily completed the PMC and holds a policy of professional
indemnity insurance if required by Queensland Law Society Indemnity Rule 2005.
Rule 23 of QLSAR states that a person is eligible for a practising certificate providing
for unsupervised legal practice only:
1. if the person completed supervised legal training to qualify – the person has
undertaken a period or periods equivalent to 18 months supervised legal practice,
worked out under s. 8 of LPR, after the date the practitioner’s first practising
certificate was granted
2. if the person completed other practical legal training to qualify – the practitioner has
undertaken a period or periods equivalent to two years supervised legal practice,
worked out under s. 8 of LPR, after the date the practitioner’s first practising
certificate was granted.
A practitioner who may engage in unsupervised legal practice but who does not
wish to engage in practice on his or her own account is subject to complying with
requirements for professional indemnity insurance entitled to an unrestricted
employee practising certificate. Rule 14 entitles such a practitioner to supervise
an office of the practice by which he or she is employed and, subject to QLS
approval, sign cheques drawn on the trust account of that practice.
2.9
Complaints against legal practitioners
The system for handling complaints against practitioners has been the subject of
scrutiny for many years.
Prior to LPA 2003, which was described by the Attorney General in the second
reading speech for the Legal Profession Bill 2003 as the first stage of the
government’s reform of the Queensland legal profession, it was common ground that
a large number of people in the state had no faith in the regulatory powers of QLS:
see the edited report of the Shanahan Report published in Proctor, December 2002
issue. At that time, there was also no statutory complaints process in respect of the
conduct of barristers. Despite the efforts of QLS to exercise statutory functions under
the QLS Act in a fair and impartial manner, the perception that the system was
run by and for legal practitioners lingered.
The reforms brought about by LPA 2003 included the appointment of a Legal
Services Commissioner responsible for the receipt and investigation of all
complaints against legal practitioners (both solicitors and barristers).
Initiating a complaint
In the first instance, a complaint about a practitioner should be made to the
Commissioner, not to QLS or the QBA.
Section 429(1) provides that an ‘ entity’, including a past or present client, QLS or
QBA, may make a complaint to the Commissioner about the conduct of an Australian
legal practitioner or law practice employee. Eligibility to make complaint against a
government legal officer is more restricted: s. 429(2).
A complaint must be in the approved form; and:
(a) identify the complainant
(b) if possible, identify the person about whom the complaint is made
(c) describe the alleged conduct the subject of the complaint.
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In recognition of the possible difficulty a legal practitioner might face in defending
allegations of misconduct arising out of events arising many years prior to the making
of a complaint, s. 430 provides that if a complaint is received more than three years
after the conduct to which it refers, the Commissioner may:
(a) refer the complaint to mediation
(b) dismiss the complaint unless the Commissioner decides that:
(i) it is just and fair to deal with the complaint having regard to the delay, and the
reasons for, the delay; or
(ii) the complaint concerns professional misconduct and it is in the public interest
to deal with the complaint.
The Commissioner is obliged to deal with complaints as efficiently and
expeditiously as practicable: s. 450.
Summary dismissal
The Commissioner may dismiss a complaint without further investigation or
consideration in the circumstances set out in s. 432 including:
 failure by the complainant to comply with a request for further information about the
complaint
 if the Commissioner considers that the complaint does not disclose conduct that may
come within Chapter 4
 if the Commissioner considers that the complaint does not disclose conduct that is
unsatisfactory professional conduct or professional misconduct
 if the Commissioner considers the complaint to be frivolous, vexatious,
misconceived or lacking in substance
 if the conduct the subject of the complaint has been previously dealt with and the
complaint discloses no reason to reconsider the matter
 if having considered the complaint, the Commissioner forms the view that the
complaint requires no further investigation.
Section 433 allows a complainant to withdraw a complaint, in full or in part. Withdrawal
of a complaint does not prevent action being taken by another person, or the
Commissioner.
Investigation of complaints and investigation matters
If a complaint received by the Commissioner is not dismissed or withdrawn, then the
Commissioner may refer it to QLS or QBA: s. 435(2).
The Commissioner can also refer a matter (an ‘investigation matter’) to QLS or QBA if
the Commissioner believes that an investigation should be started, despite there being
no complaint: s. 435(1)(c) and (2).
The Commissioner must investigate a complaint or investigation matter not referred to
QLS or QBA: s. 436(2). Some matters must be investigated by the Commissioner and
not referred to QLS or QBA: s. 436(1). Presumably such matters would include, for
example, a complaint against a councillor of QLS, where a conflict of interest might be
perceived were QLS to investigate the complaint.
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Where a matter is referred to QLS or QBA for investigation, the authority must comply
with s. 439, investigate the matter and report to the Commissioner in the time
stipulated. The report must:
(a) be in a form approved by the Commissioner
(b) include a recommendation about whether a proceeding before a disciplinary body
in relation to the complaint or investigation matter should be started.
Notice of complaint to be given to practitioner
QLS, QBA or the Commissioner, when carrying out an investigation under
ss. 435 or 436, must ensure that written notice of:
 the making and nature of the complaint or investigation matter
 the identity of the complainant
 the action taken by the entity
is given to the practitioner: s. 437(1). The notice must also advise the practitioner
of the right to make submissions in relation to the complaint by a stated date that is
reasonable: s. 437(2).
Section 437 does not provide assistance as to the timing of the notice. However, s 18
states that if no time is provided or allowed for doing something under LPA 2007, it is
to be done as soon as practicable. Despite s. 18, grounds for delay in giving the
practitioner notice include where:
 it considers notice of the complaint or investigation matter will prejudice the
investigation
 giving notice would place the complainant or another person at risk of harassment
or intimidation
 it would prejudice pending court proceedings.
Mediation of consumer disputes and hybrid complaints
Part 4.5 establishes a mechanism for referring what are described as ‘consumer disputes’
to mediation. A ‘consumer dispute’ is defined in s. 440 as a dispute between a person and
a practice about conduct of:
(a) an Australian legal practitioner, to the extent that the Commissioner considers that the
dispute does not involve an issue of unsatisfactory professional conduct or
professional misconduct; or
(b) a law practice employee, to the extent that the Commissioner considers that the
dispute does not involve an issue of misconduct in relation to the relevant practice.
If the complaint involves a consumer dispute, the Commissioner can suggest that the
matter be mediated and refer it to the relevant regulatory authority to assist in the
mediation or to otherwise resolve the dispute. If the Commissioner refers the matter
for mediation, he or she is then not required to take any further action: s. 441(3).
If a complaint is a hybrid complaint, that is, a consumer dispute which also involves
issues of unsatisfactory professional conduct or professional misconduct, the
Commissioner can suggest the matter be mediated and refer it to the relevant
regulatory authority to assist in the mediation or to otherwise resolve the dispute. Unlike
a consumer dispute, a hybrid complaint is to be dealt with after or during the mediation,
or attempt at mediation: s. 442.
In contrast to the position in NSW, there appears to be no obligation on a practitioner
in Queensland to participate in a mediation of a consumer dispute.
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Coercive powers in relation to investigation
A practitioner the subject of a complaint is under a common law obligation to
co-operate reasonably with and assist with information in relation to the complaint.
A corollary of that obligation is a duty not to attempt to thwart or interfere with the
investigation: Legal Services Commissioner v O’Connor [2006] LPT 001 at [41].
A feature of LPA 2007 is a significant extension of powers in connection with the
conduct of investigations of complaints, and the corresponding obligations of
practitioners. These powers are exercisable not just in connection with the investigation
of complaints and investigation matters under Part 4 but also in relation to trust account
investigations and compliance audits of incorporated legal practices: s 540.
Referring to the obligations of practitioners in relation to the corresponding provisions of
LPA 2004 Mullins J, in Legal Services Commissioner v O’Connor, said at [41]:
‘Legal practitioners must be expected to be familiar with the regime set up under
chapter 3 of the Act and that an important aspect of the regime is the protection
of the public which is achieved by providing for the independent and transparent
process for complaints by consumers of the services of the legal profession to be
dealt with. This regime has built upon and refined the complaint, investigation
and disciplinary processes that had applied prior to the Act.’
For the purpose of investigating a complaint or investigation matter, an entity carrying
out an investigation may:
(a) require an Australian legal practitioner who is the subject of the investigation:
(i) to give the entity, in writing or personally, within a stated reasonable time a full
explanation of the matter being investigated; or
(ii) to appear before the entity at a stated reasonable time and place; or
(iii) to produce to the entity within a stated reasonable time any document in the
practitioner’s custody, possession or control that the practitioner is entitled at
law to produce; or
(b) engage a person, whom the entity considers is qualified because the person has the
necessary expertise or experience, to report on the reasonableness of an Australian
legal practitioner’s bill of costs.
A practitioner may refuse to give the explanation required by s. 443(1)(a) if:
(a) the practitioner satisfies the entity that to give the explanation would contravene or
invalidate a policy of professional indemnity insurance held by the practitioner; or
(b) the explanation would tend to incriminate the practitioner: s. 443(6) LPA 2004.
Failure to comply with the s. 443(1)(a) requirement exposes the practitioner to a penalty
of up to 50 penalty units. If the failure continues for a period of 14 days after written
notice under s. 443(3), the practitioner is taken to have committed professional
misconduct without a reasonable excuse for non-compliance, and the Commissioner
may bring a discipline application in the Legal Practice Tribunal: s. 443(4).
Part 6.1 grants investigators appointed by the Commissioner, QLS or the QBA under s
575 extensive powers in connection with complaint and trust account investigations and
incorporated legal practice audits. These include power to access documents, to enter
and search any premises with consent or by warrant (including the business or
residential premises of a practitioner) and to seize documents from those premises.
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The decision in Legal Services Commission v Zaghini [2005] LPT 004 is an example
of a practitioner being disciplined for a failure to meet statutory obligations under the
complaints process. There, the practitioner was found guilty of professional misconduct,
fined $6000 and publicly reprimanded for failing to respond to a request for information
pursuant to s 269(1) LPA 2004, the corresponding provision to s. 443(1). Similarly,
there were many instances of practitioners being disciplined under corresponding
provisions contained in s. 5H(3) of the QLS Act.
Extraordinarily, in some of these cases, the initial complaint against the practitioners
was not pursued and the sanction was imposed due to the practitioners’ failure to
co-operate with the investigation.
Accordingly, practitioners must answer any complaint as an absolute priority.
QLS provides a free legal advice service for solicitors who have received official
notification requesting they provide information to the Legal Services Commission
or QLS, as the result of a complaint or investigation matter or trust account matter.
The service is confidential and external to the Society. The aim is to assist solicitors
to address complaints in a timely manner. Ignoring or deferring the initial request for
information is likely to result in escalation. In most cases, a prompt, well considered
response resolves the issue, saving time and stress for all parties.
The initiative provides members under investigation with expert advice for up to three
hours from an experienced solicitor with extensive knowledge of professional standards
issues. Fees will be paid by the Society for the first three hours. The practitioner
seeking advice retains the advising solicitor and usual duties of confidentiality apply.
The service has the support of the Commissioner, who acknowledges the importance
of timely well considered advice in resolving issues that might otherwise escalate.
Post investigation procedures
The Commissioner has a broad discretion whether or not to bring a discipline application
against a practitioner in respect of a complaint or investigation matter that has been or
continues to be investigated: s. 447. Normally, the Commissioner’s decision in this
regard will be made after a matter has been investigated.
The Commissioner may dismiss a complaint or investigation matter if satisfied that:
(a) there is no reasonable likelihood of a finding by a disciplinary body of either
professional misconduct or unsatisfactory professional conduct; or
(b) it is in the public interest to do so: s. 448(1).
The Commissioner’s Prosecution Guidelines describe how the broad discretion to bring a
disciplinary application or to dismiss a complaint or investigation matter will be exercised.
In contrast to the New South Wales position and the former provisions of QLS Act, LPA
2007 does not contain provisions allowing the Commissioner, QLS or QBA to
summarily conclude a complaint by cautioning or reprimanding the practitioner or by
making a compensation order. In fact, the Commissioner has no power to deal
summarily with minor misconduct. In contrast the Model Bill contemplated allowing
what it described as ‘appropriate authorities’ to impose fines or issue private or public
reprimands: s. 1131 Model Bill.
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The practical consequence is that any complaint (aside from a consumer dispute) even
if minor, may lead to disciplinary action if not dismissed or withdrawn, unless the
Commissioner is satisfied it is not in the public interest to pursue it. The Commissioner
in his article ‘The Legal Services Commissioner — One Year’ indicates his approach to
conduct complaints of this sort:
‘It is hard to see how it could possibly be in the public interest to prosecute
practitioners for alleged unsatisfactory professional conduct of these kinds
[honest mistakes and errors of judgment and poor standards of service that
give rise to legitimate consumer grievance] provided they can show they’ve
done what they reasonably can to put things right or taken steps to prevent
or reduce the risk they’ll conduct themselves similarly in future.’
The Queensland disciplinary bodies
Text for this section taken from the Qld Legal Services Commission website lsc.qld.gov.au
(04/07/2013)
The Legal Profession Act 2007 (the Act) authorises the Legal Services Commission
Queensland to initiate and prosecute discipline applications in either of two disciplinary
bodies – the Queensland Civil and Administrative Tribunal (QCAT) in relation to more
serious matters and the Legal Practice Committee (LPC) in relation to less serious
matters.
The Queensland Civil and Administrative Tribunal (QCAT)
The Queensland Civil and Administrative Tribunal (QCAT) commenced on 1 December
2009 and took over the roles and functions previously performed (from 1 July 2004) by the
former Legal Practice Tribunal.
The Legal Profession Act 2007 (the Act) gives the Legal Services Commission
Queensland power to initiate and prosecute discipline applications in QCAT to apply for
orders finding lawyers guilty of unsatisfactory professional conduct and/or professional
misconduct and impose an appropriate penalty.
QCAT (the tribunal) is constituted for purposes of hearing discipline applications under the
Act by “a judicial member who is a Supreme Court judge”, usually the President but
sometimes another judge of the Supreme Court or a former Supreme Court judge.
The judge is helped by a barrister or solicitor member (as the case may be) of a
practitioner panel comprising barristers and solicitors who have held a practising
certificate for at least five years and a member of a lay panel comprising non-lawyers who
have “high level experience and knowledge of consumer protection, business, public
administration or another relevant area”. The members of the lay and practitioner
panels (http://www.lsc.qld.gov.au/discipline/the-queensland-disciplinarybodies/qcat/members-of-the-lay-and-practitioner-panels) are appointed by the Governor in
Council.
The Act requires that hearings must be open to the public unless the tribunal directs that
a hearing or a part of a hearing be closed, and it authorises the tribunal, if the tribunal is
satisfied that a lawyer has engaged in unsatisfactory professional conduct
or professional misconduct, to make “any order as it sees fit” including orders that:
 the lawyer’s name be removed from the roll (i.e., that the lawyer be ‘struck off’)
 the lawyer be suspended from practice or be allowed to practice only subject
to certain conditions (including that the lawyer engages in legal practice only
under supervision)
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 the lawyer pay a penalty of up to $100,000
 the lawyer be publicly (or in special circumstances, privately) reprimanded
 the lawyer undertake and complete a course of further legal education or “do or
refrain from doing something in connection with engaging in legal practice”
 the lawyer’s law practice reduce or waive its fees or provide stated legal services
without a fee or for a stated fee or, if the lawyer’s unsatisfactory professional conduct
or professional misconduct has caused a complainant to suffer pecuniary loss, pay the
complainant compensation of up to $7,500.
The Act requires the tribunal to order lawyers it finds guilty of unsatisfactory professional
conduct or professional conduct to pay the Commissioner’s costs unless
it is satisfied that ‘exceptional circumstances exist’.
The Minister, the Commissioner, respondent lawyers and other parties who are
dissatisfied with a decision of the tribunal can appeal the decision in the Court of Appeal.
Legal Practice Committee
The Legal Practice Committee (the LPC) was established under the Legal Profession Act
2004 and continued under the Legal Profession Act 2007 (the Act) to hear and decide
discipline applications made by the LSC which apply for orders that find lawyers guilty of
unsatisfactory professional conduct and discipline applications which apply for orders that
find law practice employees guilty of misconduct and which impose an appropriate
penalty.
Importantly the LPC is not empowered to make orders which find lawyers guilty of
professional misconduct. Discipline applications which allege professional misconduct
must be made to, and heard and decided by the Queensland Civil and Administrative
Tribunal (QCAT)
The LPC also has an advisory function – to monitor the adequacy of the legal profession
rules (the barristers and the solicitors rules which govern the conduct of barristers and
solicitors respectively and the rule governing the conduct of incorporated legal practices)
and at the Minister’s request to make recommendations about the rules.
It comprises seven people appointed by the Governor-in-Council: a chairperson, two
solicitors, two barristers, and two lay people who are not lawyers and who “have high level
experience and knowledge of consumer protection, business, public administration or
another relevant area”. The Act requires that the committee members - the members of
the Legal Practice Committee (http://www.lsc.qld.gov.au/discipline/the-queenslanddisciplinary-bodies/lpc/the-legal-practice-committee-members) – must appoint a member
other than the chairperson to be the deputy chairperson.
The LPC is constituted for purposes of its advisory functions by any four of its members
including the chairperson or deputy chairperson or, if neither is available, a member
chosen by the members who are present to preside at the meeting.
It is constituted for purpose of hearing discipline applications by the chairperson (or
deputy chairperson), a solicitor or a barrister (depending on whether the discipline
application concerns complaint is about a solicitor or barrister) and a lay member.
The Act requires that hearings must be open to the public unless the committee directs
that a hearing or a part of a hearing be closed, and it authorises the committee, if it is
satisfied that a lawyer is guilty of unsatisfactory professional conduct or that a law practice
employee is guilty of misconduct, to make orders including that:
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 the lawyer pay a penalty of up to $10,000
 the lawyer be publicly (or in special circumstances, privately) reprimanded
 the lawyer “do or refrain from doing something in connection with engaging in legal
practice”, or engage in legal practice subject to stated conditions or periodic inspection
seek advice, or seek advice from a person nominated by his or her professional body
 the lawyer’s law practice reduce or waive its fees or provide stated legal services
without a fee or for a stated fee or, if the lawyer’s unsatisfactory professional conduct
or law practice employee’s misconduct has caused a complainant to suffer pecuniary
loss, pay the complainant compensation of up to $7,500
 the law practice employee not be employed in a law practice in Queensland or
be employed only subject to stated conditions.
Additionally, the Committee must order lawyers it finds guilty of unsatisfactory
professional conduct to pay the Commission’s costs unless it is satisfied ‘exceptional
circumstances exist’.
The Minister, the Commissioner, respondent lawyers and law practice employees
and other parties who are dissatisfied with a decision of the LPC can appeal the
decision in QCAT.
Compensation orders
A compensation order under LPA 2007 is any one or more of the following:
(a) An order that a practice cannot recover or must repay all or a stated part of the
amount that the practice charged a complainant for stated legal services.
(b) An order discharging a lien possessed by a practice in relation to a stated document
or class of documents.
(c) An order that a practice carry out stated work for a stated person without a fee or
for a stated fee.
(d) An order that a practice pay to a complainant an amount by way of compensation
for pecuniary loss because of conduct that has been found to be:
(i) unsatisfactory professional conduct or professional misconduct of an Australian
legal practitioner involved in the relevant practice; or
(ii) is conduct of a practice employee in relation to the relevant practice: see s. 464.
Pursuant to s. 465, QCAT or the Committee is prevented from making an order for
compensation under s. 464(d) in certain circumstances. Under s. 465(1), unless the
parties otherwise agree, the disciplinary body must not make a compensation order
unless it is satisfied that the complainant has suffered pecuniary loss as a result of the
conduct, and it is in interests of justice that compensation be ordered. Under s. 465(2),
a compensation order must not be made where the complainant has received or is
entitled to receive for a pecuniary loss:
 compensation under an order made by a court
 compensation from the fidelity fund, or a corresponding fund of another jurisdiction.
Unless the complainant and practice consent, a compensation order under s. 464(d)
is not to exceed $7500: s. 466(3).
The recovery of compensation awarded by QCAT or the Committee does not affect
any other remedy that may be available to the complainant. However, any
compensation award is to be taken into account in any other proceedings brought
by the complainant in respect of the same loss: s. 467.
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Costs orders
QCAT and the Committee must make an order requiring a person whom they have
found guilty to pay costs, including costs of the Commissioner and complainant, unless
satisfied that exceptional circumstances exist: s. 462(1).
Costs do not necessarily follow the event so that even where QCAT or the Committee
is satisfied that a person is not guilty of unsatisfactory professional conduct or
professional misconduct, it may make orders requiring that person to pay costs if it is
satisfied under s. 462(2) that:
(a) the sole or principal reason the proceedings were started in the disciplinary body
was the person’s failure to co-operate with the Commissioner or a relevant
regulatory authority; or
(b) there is some other reason warranting the making of an order in the particular
circumstances.
The Commissioner may be ordered to pay costs, if QCAT or the Committee is satisfied
the practitioner is not guilty and special circumstances exist: s. 462(4). Legal Services
Commissioner v Sing (No 2) [2007] LPT 005 was a discipline application in which it was
alleged that the practitioner had improperly threatened criminal action in default of the
party concerned making civil redress. The application had been dismissed and the
practitioner sought an order for costs. The Chief Justice, although acknowledging the
discipline application involved some attempt to delineate a practitioner’s ethical
obligations in the area, did not regard the outcome as particularly special because the
decision drew on established authority, and the end result involved a value judgment on
the facts of the case. The Chief Justice referred to the public interest motivating the
Commissioner and said ‘special circumstances mean just that’. The practitioner failed in
his application.
Appeals
An order or other decision made by QCAT may be appealed to the Court of Appeal
by the Minister or a party dissatisfied with the Tribunal’s decision: s. 468(1). Any such
appeal is by way of rehearing and not by way of a new hearing: s. 468(2). The nature
of such an appeal was considered by the High Court in Walsh v Law Society (1999) 198
CLR 73; 164 ALR 405. In that case, the court said at ALR 420:
‘More relevantly for present purposes, the repeal of the provisions which had
previously fixed the character of the appeal as a ‘new hearing’, and which
required that it henceforth be approached as an appeal under s 75A of the
Supreme Court Act, altered the function which the Court of Appeal had to
perform. Its function was to decide whether the Law Society, as appellant,
had shown error on the part of the tribunal on any of the grounds by which it
challenged the tribunal’s decision.’
However, s. 468(2) does not prevent the Court of Appeal from giving leave to
introduce further evidence whether fresh, additional or substituted: s. 468(3).
Appeals from decisions of the Committee are by way of rehearing before QCAT: s. 469.
The giving of further evidence does not require leave. However, if the appeal
period has expired and the order of the Committee has been filed in the Supreme
Court, causing it to become an order of the Supreme Court by virtue of s. 459(4),
it can only be appealed with leave of the Court of Appeal and will be heard by that
court: s. 470.
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2.10 Review: key points
 The long list of statutory provisions relevant to the conduct of practitioners can
be found in the glossary.
 The ultimate disciplinary sanction is the removal of a practitioner’s name from the
roll of practitioners.
 LPA 2007 gives QCAT and the Committee power to discipline practitioners where
satisfied the practitioner is guilty of ‘professional misconduct’ or ‘unsatisfactory
professional conduct’.
 ASCR commenced in Queensland on 1 June 2012. A breach of the ASCR is capable
of constituting unsatisfactory professional conduct or professional misconduct, and
may give rise to disciplinary action by the relevant regulatory authority, but cannot
be enforced by a third party.
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3. Establishing client retainers and handling costs issues
3.1
Introduction
In this part we examine the professional obligations relating to the costing of legal
services.
See the Client Service and Costs, Billing and Profitability units for more information
about retainers and costs.
Costing is a major issue for consumers of legal services in Queensland. According to
the Legal Services Commission 2012/13 annual report (Legal Services Commission,
2013), 35% of what the Commission has classified as complaints involving
consumer disputes and 17% of conduct matters, related to legal fees and costs.
At the end this part of the unit, you will be able to:
 identify the key principles in relation to ethical costing and billing
 identify the costs disclosure requirements under LPA 2007
 discuss the provisions for costs agreements in LPA 2007
 discuss the provisions for costs assessment and recovery of costs in LPA 2007.
3.2
Costing legal services
The Chief Justice in Council of the Queensland Law Society Inc v Roche [2003] QCA
469 has expressed concern about costing practices in the profession. His Honour said
at [32]:
‘Major criteria which ultimately inform the professionalism of the law are
integrity, and as concomitants, honesty and reasonableness. A degree of
recklessness may unfortunately have entered this field in recent times in the
case of some practitioners. How, as instances, could it be conceived, as
professional, to require recompense from the client, on a timed basis, for
unsuccessfully seeking to telephone someone, for time spent unsuccessfully
searching a file, and as mentioned above, for steps taken to express thanks for
assistance? The legal profession must realise that to maintain its perceived
professionalism, its practices must be seen as those appropriate to a
profession, and not those of a run-of-the-mill commercial enterprise. There is,
in short, a large role for discretion and conservative moderation, characteristics
not evident in this unfortunate case.’
Part 3.4 adopts the legal profession national model laws in relation to client costs
agreements and consumers’ cost review rights.
3.3
Disclosure obligations of practitioner as fiduciary
Part 3.4 includes detailed provisions requiring practices to disclose a wide range of
matters relating to the cost of legal services. More fundamentally, due to the
fiduciary relationship between practitioner and client, has obligations particularly
where there is a conflict or potential conflict between the interests of practitioner
and client.
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The duties of practitioners as fiduciaries are discussed in the QLS commentary on the
ASCR. However, a breach of what the High Court has described as the practitioner’s
‘duty of undivided loyalty’: Maguire and Tansey v Makaronis (1997) 188 CLR 449, can
arise from a failure to ensure the client exercises independent and informed judgment
when entering into a costs agreement.
The Chief Justice in Council of the Queensland Law Society Inc v Roche said in relation
to the practitioner’s fiduciary obligations:
‘[13] The Tribunal described this as a serious breach of fiduciary duty, and
observed that the respondent’s “conduct did not come close to an acceptable
standard for the carrying out of his fiduciary duty.” That was plainly right. It
was as I have noted a case of the respondent’s preferring his own interest
over that of his client. Otherwise he would, as duty bound, have given the
respondent “full and frank disclosure” (Law Society of NSW v Foreman
(1994) 34 NSWLR 408, 435) of all of the relevant information – as covered
above, and have invited him to seek independent advice, in order to ensure
that the respondent’s decision in the matter was fully informed.’
In Re Budziszewski & Silver's Bill of Costs (1981) 7 Fam LR 284; FLC 91-038, Baker J
said (at p 76,339):
‘It seems to me that an agreement in relation to costs whereby a solicitor
seeks to charge costs in excess of the scale prescribed by an Act or regulations
promulgated thereunder is in no different position to an agreement entered
into between a solicitor and his client in relation to a commercial transaction.
Long established principles applicable to agreements between solicitor and
client, whether they be related to contentious or commercial work, suggest...
(a) that such agreement is only enforceable if it be fair and reasonable having
regard to all the surrounding circumstances…
(b) there is a clear obligation on the part of the solicitor to advise the client that
it is against the client’s interest to sign an agreement entitling the solicitor
to charge more costs than he may otherwise have been able to charge…
(c) the client’s consent to any agreement must be a real consent, obtained
without undue influence or pressure being applied to the client and then
following a full disclosure by the solicitor.
(d) A breach of fiduciary duty can result in both the court setting aside the
costs agreement and disciplinary action as in Council of the Queensland Law
Society Inc v Roche.’
Section 328 confers power on the Supreme Court to set aside a costs agreement if
satisfied it is not fair or reasonable. The power appears considerably broader than the
power to set aside an agreement for breach of fiduciary duty. The court may have regard
to these factors:
(a) Whether the client was induced to enter into the agreement by the fraud or
misrepresentation of the practice or of any representative of the practice.
(b) Whether any Australian legal practitioner or Australian-registered foreign lawyer
acting on behalf of the practice has been found guilty of unsatisfactory professional
conduct or professional misconduct in relation to the provision of legal services to
which the agreement relates.
(c) Whether the practice failed to make any of the disclosures required under Division 3.
(d) The circumstances and conduct of the parties before and when the agreement
was made.
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(e) Whether and how the agreement addresses the effect on costs of matters and
changed circumstances that might foreseeably arise and affect the extent and nature
of legal services provided under the agreement.
(f) Whether and how billing under the agreement addresses changed circumstances
affecting the extent and nature of legal services provided under the agreement.
3.4
Overcharging, professional misconduct and
unsatisfactory professional conduct
Practitioners have a legal and professional duty not to overcharge. To knowingly
overcharge is inconsistent with fiduciary obligations and the duty to protect and
advance the client's interests.
What a practitioner is entitled to charge depends on the agreement between practitioner
and client. However, the freedom to contract is restricted by the existence of the
fiduciary relationship, by the inherent power of the court to prevent excessive charging
by its officers and by legislative provisions.
The reduction of a bill of costs upon assessment, or the setting aside of a costs
agreement by an assessor, does not of itself constitute improper conduct. This is
a question of degree and concomitant circumstances. Instances of overcharging
amounting to professional misconduct will frequently be accompanied by an element
of fraud or non-disclosure of material facts, such charging for work not carried out,
charging costs when the practitioner has already been paid by a third party for the
work, or charging costs at a rate applicable to work performed by a practitioner
when the work is performed by a non-qualified person: see, for example, Legal
Services Commission v Michael Vincent Baker [2005] LPT002.
In Council of the Queensland Law Society Inc v Roche, the practitioner was found guilty
of misconduct for overcharging. The Court of Appeal found, amongst other things, that
the practitioner’s cost agreement with the client included provision for charging $300
per hour applicable to all the partners and employees, together with a 30% premium.
Non-qualified persons carried out about half of the work done on the particular file
under consideration. A substantial amount of that work was described as of ‘a fairly
mundane nature’ including, as notable examples, 12 minutes spent wrapping a box of
chocolates to be given to a reporting doctor's secretary by way of thanks for facilitating
the correcting of a report, and another 12 minutes spent discussing arrangements for
the purchase of the gift ‘for which momentous engagements the respondent was on my
calculation billed $156’. De Jersey CJ referring to ‘the ethical approach’ said:
1. The circumstance that a solicitor's right to exact certain charges is
enshrined in an executed client agreement will not necessarily protect the
solicitor from a finding of gross overcharging. For example, as here, the
client may not have given his or her ‘ fully informed consent’ to the
agreement; or the very extent of the particular charges may itself
evidence inexcusable rapacity. It is repugnant to think of a solicitor
withholding detail from a client, precedent to an agreement, to the
solicitor's advantage and the client's disadvantage...
2. The extent to which a solicitor need explain to his or her client a prima
facie unusual basis of charging may depend on the extent to which that
basis is unusual. Should it be proposed, for example, as in this case, and
one would hope very unusually, that the time of a non-legally qualified
paralegal, performing essentially secretarial or administrative tasks, be
chargeable at rates approaching those appropriate to an employed solicitor
or partner, then one would expect some compelling explanation: has, for
example, the charge out rate been set appreciably lower than that which
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would usually apply to a partner, reflecting appropriately the mix of
professional/non-professional work, in the interests of convenience to the
client? It would be unprofessional, as happened in this case, to set a high,
across-the-board rate, albeit less than a commandable partner rate, which
resulted in a windfall because of the high proportion of non-qualified work
to be accomplished.
3. A careful explanation should ordinarily be offered for what have, in this
case, been termed "blended" rates. A client would usually be astonished to
think he or she had to pay for the solicitor's secretary or clerk at the same
rate as for the solicitor. Cases like this one should cause careful clients to
be circumspect about entering upon blended fee arrangements. A solicitor
proposing such an arrangement should offer a most careful justification for
what is proposed, to assure the client he or she is not being disadvantaged,
and to inform the client appropriately so the client may make the requisite
fully informed decision whether or not to agree to the proposal.
4. As observed by Gleeson CJ in New South Wales Crime Commission v
Fleming and Heal (1991) 24 NSWLR 116 at 126; [1992] ANZ ConvR 344;
BC9101668 ‘to allow a simple, flat, hourly rate as the basis for charging for
anything, of whatever character, done by any solicitor of whatever seniority
and experience in relation to the matter, is difficult to justify.’ I add, even
more so, where the rate extends to work done by employees without
legal qualification.
Section 420(b) provides that ‘charging excessive legal costs in connection with the
practice of the law’ is capable of being professional misconduct or unsatisfactory
professional conduct. In this respect, it should be noted that if, on a costs assessment,
a costs assessor or court:
(a) considers that costs charged to be grossly excessive, the costs assessor or court
must refer the matter to the Commissioner to consider whether disciplinary action
should be taken: s. 343(3)(a)
(b) considers that the assessment raises another matter that may amount to
professional misconduct the costs assessor or court must refer the matter to the
Commissioner to consider whether disciplinary action should be taken: s. 343(3)(b)
(c) reduces the legal costs payable by 15% or more the costs assessor or court may
refer the matter to the Commissioner to consider whether disciplinary action
should be taken: s. 343(2).
Costing and penalty provisions
In considering these provisions, note particularly the obligations in s. 324 (Conditional
costs agreements involving uplift fees) and s. 325 (Contingency fees are prohibited).
A contravention of the obligations in these sections exposes principals to prosecution.
Unless a principal of a contravening practice establishes one of the following defences
that principal will be taken to have contravened the section and thus also liable to
prosecution under s. 701:
(a) the practice contravened the provision without the knowledge actual, imputed or
constructive of the principal
(b) the principal was not in a position to influence the conduct of the practice in relation
to its contravention of the provision; or
(c) the principal, if in that position, used all due diligence to prevent the contravention
by the practice.
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Speculative personal injury claims
Practitioner conduct in seeking to avoid or evade the operation of the cap on costs in
respect of speculative personal injury claims is a matter of concern to the Commissioner.
The terms of the so-called 50/50 rule (s. 347) differs from that contained in s. 481C
of the QLS Act.
Section 347(1) provides that the maximum amount of legal costs (inclusive of GST) that
a practice may charge and recover from a client for work done in relation to a
speculative personal injury claim must be calculated under the costs agreement with
the client for the claim or under LPA 2007, but in no case can those legal costs be more
than the amount calculated using the formula – [E-(R+D)] x 0.5 – where:
E means the amount to which the client is entitled under a judgment or settlement,
including an amount the client is entitled to receive for costs under the judgment or
settlement.
R means the total amount the client must, under an Act, a law of the Commonwealth or
another jurisdiction, or otherwise, refund on receipt of the amount to which the client is
entitled under the judgment or settlement.
D means the total amount of disbursements or expenses for which the client is liable if
that liability is incurred by or on behalf of the client either by the law practice or on the
advice or recommendation of the law practice, in obtaining goods or services (other
than legal services from that law practice) for the purpose of investigating or
progressing the client's claim, regardless of how or by whom those disbursements or
expenses are paid, but does not include interest on the disbursements or expenses.
Examples for D:
The disbursements or expenses may be paid by the client direct or through a law
practice or by a person funding the client for those disbursements or expenses.
If a client obtains a loan to fund the payment of disbursements and expenses on the
practice's recommendation and pays for medical and expert reports direct to the
provider, the expenses fall within D (but the interest payable by the client on those
expenses do not).
Charging for outlays and disbursements
In his paper Creative Practice or Profiteering?, the Commissioner expressed concern
about practices in the charging of disbursements, and identified the practice of charging
clients for what would normally be regarded as practice overheads, for example, fileopening fees.
The Commissioner, in association with QLS, has now published Guidelines in this area.
Clearly, to act outside the Guidelines is to invite disciplinary action. The Guidelines are
available on QLS and LSC websites.
3.5
Costs disclosure
Subject to limited exceptions, Part 3.4 of Division 3 LPA 2007 requires a practice to
make written disclosure of a wide range of matters relating to the cost of legal services
before or as soon as practicable after the practice is retained.
Section 308 provides:
‘(1)
A law practice must disclose to a client under this division:
a. the basis on which legal costs will be calculated, including whether
a scale of costs applies to any of the legal costs; and
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b. the client’s right to:
i. negotiate a costs agreement with the law practice, and
ii. receive a bill from the law practice, and
iii. request an itemised bill after receipt of a lump sum bill, and
iv. be notified under section 315 of any substantial change to the
matters disclosed under this section, and
c. an estimate of the total legal costs if reasonably practicable or, if that is
not reasonably practicable, a range of estimates of the total legal costs
and an explanation of the major variables that will affect the calculation
of those costs, and
d. details of the intervals (if any) at which the client will be billed, and
e. the rate of interest (if any), that the law practice charges on overdue
legal costs whether that rate is a stated rate of interest or is a
benchmark rate of interest as mentioned in subsection (2); and
f.
if the matter is a litigious matter, an estimate of:
i.
the range of costs that may be recovered if the client is successful
in the litigation, and
ii. the range of costs the client may be ordered to pay if the client is
unsuccessful, and
g. the client’s right to progress reports under section 317, and
h. details of the person whom the client may contact to discuss the legal
costs, and
i. the following avenues that are open to the client in the event of
a dispute in relation to legal costs:
i.
costs assessment under Division 7,
ii. the setting aside of a costs agreement under section 328, and
j. any time limits that apply to the taking of any action referred to in
paragraph (i), and
k. that the law of this jurisdiction applies to legal costs in relation to the
matter, and
l. information about the client’s right:
i.
to accept under a corresponding law a written offer to enter into an
agreement with the law practice that the corresponding provisions
of the corresponding law apply to the matter. Or
ii. to notify under a corresponding law, and within the time allowed by
the corresponding law, the law practice in writing that the client or
prospective client requires the corresponding provisions of the
corresponding law to apply to the matter.
(2) …
(3) …
(4) For the purposes of subsection (1)(f), the disclosure must include:
a. a statement that an order by a court for the payment of costs in favour
of the client will not necessarily cover the whole of the client’s legal costs,
and
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b. if applicable, a statement that disbursements may be payable by the client
even if the client enters a conditional costs agreement.”
In addition, if another practice (which includes a barrister) is to be retained on behalf of
a client the first practice must disclose to the client the details in s. 308(1)(a), (c) and (d)
in respect of the other practice: s. 309(1).
3.6
Additional disclosure obligations –
settlements and uplift fees
Where a retainer involves, or is likely to involve, the issue of proceedings in a court or
tribunal and the matter is settled, a practice must disclose to the client before the
settlement is executed a reasonable estimate of the amount of costs payable to the
practice and to any other party: s. 312(1).
As discussed below, a practice and client may enter into a costs agreement that
provides for the payment of a reasonable premium or uplift fee on the legal costs
otherwise payable under the agreement, on the successful outcome of the matter.
Uplift fees are discussed under the heading ‘Uplift fees and conditional costs
agreements’, below. If a costs agreement involves an uplift fee, then before entering
into the costs agreement the practice must disclose:
(a) the practice’s legal costs
(b) the uplift fee (or the basis of calculation of the uplift fee)
(c) the reasons why the uplift fee is warranted: s. 313(1).
The obligation to make disclosure in relation to uplift fees does not apply to
a ‘sophisticated client’.
3.7
Continuous disclosure
A practice has an ongoing obligation to disclose to the client, in writing, any
substantial change to anything included in a disclosure already made under Division 3
LPA 2007 as soon as is reasonably practicable after the practice becomes aware of
that change: s. 315.
It would appear to follow that if at the beginning of a matter a practice has made
disclosure under s. 308(1)(f)(ii) and subsequently learns the other party has briefed the
most senior counsel in the state, an updated estimate will be required to be given.
It is worth noting that it is difficult, when entering into a retainer, to accurately estimate
likely costs recovered in the event the client is successful, or likely costs to be paid if
the client is not.
3.8
Exceptions to disclosure obligations
LPA 2007 prescribes the circumstances where disclosure under ss. 308 and 309(1)
is not required. The circumstances, under s. 311, include:
 where total costs (excluding disbursements) are not likely to exceed $1500 exclusive
of GST (prior to 18 July 2008 the amount was $750)
 where disclosure has been made to the client under s. 308 or 309 at least once in the
previous 12 months, the client agrees in writing to waive the right to disclosure and a
principal of the legal practice decides on reasonable grounds that further disclosure
is not warranted
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 where the client is a ‘sophisticated’ client. A sophisticated client includes another
practice, an Australian lawyer, a public company, a large proprietary company, a
foreign company, a registered Australian body, a financial services licensee under
the Corporations Act, a minister, a government department or a public authority
 there has been a competitive tender process; or
 where the practice acts pro bono.
There is no general exception provision, for example, a provision excepting disclosure
where it would not be reasonable to require disclosure, or an exception for urgent work
as existed under s. 48 QLS Act.
The disclosure obligations under LPA 2007 apply to work done in Queensland
jurisdictions as well as in the federal courts. They are also applicable in Family Law
Act 1975 (Cth) matters in the Federal Magistrates Court and, after 30 June 2008,
for matters in the Family Court of Australia.
Form and manner of disclosure
Written disclosures under Div 3 must be expressed in clear plain language.
A practice may make the disclosures referred to in s. 308(1)(b)(i)–(iii)(g)(i)(j) and (l)
by utilising the prescribed form.
Form 1
Legal Profession Act 2007 (s 308(5))
FORM OF DISCLOSURE OF COSTS TO CLIENTS
Legal costs — your right to know
You have the right to:
 negotiate a costs agreement with us
 receive a bill of costs from us
 request an itemised bill of costs after you receive a lump sum bill from us
 request written reports about the progress of your matter and the costs incurred
in
your matter
 apply for costs to be assessed within 12 months if you are unhappy with our costs
 apply for the costs agreement to be set aside
 accept or reject any offer we make for an interstate costs law to apply to your
matter
 notify us that you require an interstate costs law to apply to your matter.
For more information about your rights, please read the fact sheet titled Legal Costs
— your right to know. You can ask us for a copy, or obtain it from your local law
society or law institute (or download it from their website).
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3.10 Consequences of non-disclosure
A failure to disclose ‘ anything required to be disclosed’ by Part 3.4 o f Division 3
has these consequences:
 The client need not pay the costs of the legal services unless the costs have been
assessed under Division 7: s. 316(1).
 Unless the costs assessor otherwise decides the costs of any assessment (including
the costs of the costs assessor) are payable by the practice seeking to recover costs:
s. 342.
 The client may apply under s. 328 to have any costs agreement set aside: s. 316(3).
 The amount of costs may be reduced on assessment by an amount considered by the
costs assessor to be proportionate to the seriousness of the failure to disclose: s.
316(4).
 The practice cannot maintain proceedings for the recovery of the costs unless the
costs have been assessed under Division 7: s. 316(2). In Baynes v Kalyk [2003]
NSWSC 607; BC200303612 (interpreting an equivalent provision in the NSW
legislation) it was held that until assessment takes place, there is no obligation to pay
and consequently no actionable debt upon which proceedings can be maintained.
Any action commenced prior to assessment should be summarily dismissed.
 The failure is capable of being unsatisfactory professional conduct or professional
misconduct on the part of any Australian legal practitioner or Australian-registered
foreign lawyer involved in the failure: s. 316(7).
3.11 Recovering costs
Part 3.4 of Division 4 appears to codify the circumstances in which a practice may
recover costs. Subject to Division 2, legal costs are recoverable:
(a) under a costs agreement made under Division 5; or
(b) if (a) does not apply – under the applicable scale of costs; or
(c) If neither (a) nor (b) apply, according to the fair and reasonable value of the legal
services provided: s. 319(1).
Certain costs are not recoverable, for example costs associated with:
 preparing an itemised bill: s. 332(6)
 providing a progress report under s. 317(1)(b).
3.12 Costs agreements
Part 3.4 of Division 5 makes provision for costs agreements. A costs agreement must
be in writing or evidenced in writing: s. 322(2).
A costs agreement may consist of a written offer to enter into a costs agreement that is
accepted in writing or by the client’s other conduct: s. 322(3). However, the offer must
clearly state it is an offer to enter into a costs agreement and that the client may accept
the offer in writing or by other nominated conduct: s. 322(4).
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An important consequence of the existence of a costs agreement under Division 5
is that, on assessment, the costs allowed are to be determined by reference to the
provisions of the costs agreement: s. 340(1). In particular, the assessor is to have
reference to any amount or rate for calculating the amount of costs, for example,
a specified hourly rate.
A costs agreement that contravenes, or is entered into in contravention of, any
provision of Division 5 is void: s. 327(1). The practice may, however, recover costs
under a void agreement if a legal service is provided: s. 327(2).
Prior to 1 July 2008, rule 19.14 of the Family Law Rules 2004 regulated costs
agreements for work in the Family Court of Australia. As a result of the Family Law
Amendment Rules 2008 (No 1), legal profession legislation in the state or territory
where the practitioner practises governs the requirements for costs agreements.
Conditional costs agreements
In Clyne v NSW Bar Association (1960) 104 CLR 186; [1960] ALR 574; BC6000600 the
High Court indicated that it was not improper on the ground of maintenance or
champerty for a practitioner to act for a client in litigation, even though the only prospect
of payment was in obtaining a judgment or order against the other party to litigation.
To improve access to justice and to confirm the approach taken by the High Court,
provision for fee agreements under which payment of costs was conditional on success
is made in LPA 2007.
Such agreements are closely regulated and there are a number of provisions designed
to safeguard the interests of clients.
A conditional costs agreement under LPA 2007 may provide that the payment of some
or all of the legal costs is conditional on the successful outcome of the matter: s. 323.
A conditional costs agreement must not only be in writing but must:
(a) set out the circumstances that constitute the successful outcome of the matter
to which it relates
(b) be expressed in clear plain language
(c) be signed by the client
(d) state that the client has been informed of the right to independent legal advice;
(e) and contain a cooling-off period of not less than five clear business days during
which the client may by notice in writing terminate the agreement: s. 323(3).
These requirements do not apply to sophisticated clients.
A conditional costs agreement may relate to any matter except a matter that involves
criminal proceedings or proceedings under the Family Law Act 1975: s. 323(2).
Uplift fees and conditional costs agreements
Section 324 permits a conditional costs agreement to include provision for an ‘uplift fee’.
Section 300 defines an uplift fee as additional legal costs, excluding disbursements,
payable under a costs agreement on the successful outcome of the matter to which
the agreement relates. As noted above, a practice must disclose certain matters to the
client in writing before entering into a costs agreement containing an uplift fee.
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The premium or ‘uplift’ factor must be separately identified in the conditional costs
agreement: s. 324(2). It must contain an estimate of the uplift fee or, if that is not
reasonably practicable, a range of estimates of the uplift fee and an explanation of
major variables that will affect calculation of the uplift fee: s. 324(3). If the conditional
costs agreement relates to a litigious matter, the uplift fee must not exceed 25% of the
costs, excluding disbursements, otherwise payable: s. 324(4).
It is an offence punishable by up to 100 penalty units for a practice to enter into a costs
agreement in contravention of s. 324(6).
If a conditional costs agreement contravenes s 324 because, for example, it does not
provide an estimate of the uplift fees or range of estimates, the practice is not entitled
to recover the whole or any part of the uplift fee and must repay any amount received:
s. 327(4).
3.13 Prohibition of contingency fee arrangements
It is an offence to enter into a costs agreement providing for a contingency fee: s. 325.
A contingency fee is an ‘amount payable to the law practice, or any part of that amount
... calculated by reference to the amount of any award or settlement or the value of any
property that may be recovered in any proceedings to which the agreement relates’: s.
325(1).
If a costs agreement contravenes s. 325, the practice is not entitled to any costs
whether under the agreement or otherwise, and must repay any amount received: s.
327(5).
3.14 Billing
Part 3.4 of Division 6 deals with billing.
A bill may be in a lump sum or itemised form: s. 330. An itemised bill is one ‘stating in
detail how the legal costs are made up in a way that would allow them to be assessed
under Division 7’: s300.
Formal requirements for a bill include the requirement that it be signed and delivered in
accordance with s. 332.
If a lump sum bill is given, the client or any other person entitled to apply for
assessment of costs may request an itemised bill: s. 332(1). There appears to be no
time limit on the making of such a request. A practice must comply with a request for an
itemised bill within 28 days: s. 332(2).
Section 331(1) provides:
‘A bill must include or be accompanied by a written statement setting out:
(a) the following avenues that are open to the client in the event of a dispute in
relation to legal costs:
i.
costs assessment under Division 7;
ii. the setting aside of a costs agreement under section 328; and
(b) any time limits that apply to the taking of any action referred to in paragraph
(a).’
The subsection (1) requirement does not apply to sophisticated clients: s. 331(2).
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A practice may provide the written statement required by subsection (1) on the
prescribed form.
Form 2
Legal Profession Act 2007(s331(3))
FORM OF NOTIFICATION OF CLIENT’S RIGHTS
Your rights in relation to legal costs
The following avenues are available to you if you are not happy with this bill:
 requesting an itemised bill
 discussing your concerns with us
 having our costs assessed
 applying to set aside our costs agreement
There may be other avenues available in your State or Territory (such as mediation).
For more information about your rights, please read the fact sheet titled Your right to
challenge legal costs. You can ask us for a copy, or obtain it from your local law
society or law institute
(or download it from their website).
A practice cannot commence proceedings for recovery of costs until at least 30 days
after giving a bill including a notification of rights statement: s. 329(1). If a lump sum bill
is given to the client who requests an itemised bill, the practice cannot commence
proceedings for recovery of those costs until at least 30 days after complying with the
request: s. 332(5).
In respect of retainers entered into after 30 June 2008 for work in the Family Court of
Australia, billing requirements under legal profession legislation in the state or territory
where the solicitor practises apply rather than those contained in the Family Law Rules
2004: Family Law Amendment Rules 2008 (No 1).
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3.15 Costs assessment
A client, a ‘third party payer’ or a practice may seek costs assessment: ss. 335(1),
335(2) and s. 337. Generally, application by a client or a ‘third party payer’ is to be
made within 12 months of delivery of a bill, although an assessor may, after considering
the reasons for the delay, assess outside this time frame: see s. 335(5).
An assessor appointed under the Uniform Civil Procedure Rules conducts the
assessment. A practice cannot commence proceedings for recovery of costs if an
application for costs assessment is pending: s. 338.
In conducting an assessment, an assessor is required to consider:
(a) whether or not it was reasonable to carry out the work to which the legal costs
relate
(b) whether or not the work was carried out in a reasonable way
(c) the fairness and reasonableness of the amount of legal costs in relation to the work,
except to the extent that s. 340 applies to any disputed costs: s. 341(1).
Section 340 requires an assessor to assess by reference to the provisions of a
complying costs agreement that specifies the amount of costs or the rate or other
means of calculating costs.
Section 341(2) sets out the matters an assessor may have regard to in determining the
fairness and reasonableness of the amount of costs being:
(a) whether the law practice and any Australian legal practitioner or Australianregistered foreign lawyer acting on its behalf complied with this Act
(b) any disclosures made by the law practice under division 3
(c) any relevant advertisement as to:
i.
the law practice’s costs; or
ii. the skill of the law practice, or of any Australian legal practitioner or Australianregistered foreign lawyer acting on its behalf
(d) the skills labour and responsibility displayed on the part of the Australian legal
practitioner or Australian-register foreign lawyer responsible for the matter
(e) the retainer and whether the work done was within the scope of the retainer
(f) the complexity, novelty or difficulty of the matter
(g) the quality of the work done
(h) the place where, and circumstances in which, the legal services were provided
(i) the time within which the work was required to be done
(j) any other relevant matter.
Unless a costs assessor otherwise decides:
(a) the law practice to which the cost of the costs assessment are payable or were paid
must pay the costs if:
i.
the legal costs in dispute are reduced by 15% or more on the costs
assessment; or
ii. the costs assessor is satisfied the law practice failed to comply with division
3; and
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(b) if not, the applicant or applicants must then pay the costs of the costs assessment
as stated by the costs assessor in the costs assessment: s342.
This assessment process applies to costs charged in respect of retainers entered into
after 30 June 2008 for work in the Family Court of Australia rather than the assessment
process provided for in part 190 of the Family Law Rules 2004.
3.16 Review: key points
 Part 3.4 of LPA 2007 adopts the legal profession national model laws in relation to
client costs agreements and consumers’ cost review rights.
 The Supreme Court can set aside a costs agreement if satisfied the agreement is
not fair and reasonable.
 Subject to limited exceptions, LPA 2007 requires a practice to make written
disclosure of a wide range of matters relating to the cost of legal services before
or as soon as practicable after the practice is retained.
 A practice has an ongoing obligation to disclose to the client, in writing, any
substantial change to anything included in a disclosure already made as soon
as is reasonably practicable after the practice becomes aware of that change.
 The Commissioner in association with QLS has published guidelines in relation to
charging for outlays and disbursements. Clearly, to act outside the guidelines is to
invite disciplinary action.
 It is an offence to enter into a costs agreement providing for a contingency fee. A
contingency fee is, an ‘amount payable to a law practice, or any part of that amount
calculated by reference to the amount of any award or settlement or the value of any
property that may be recovered in any proceedings to which the agreement relates’.
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4. References
Legal Services Commission, Qld Unsatisfactory Professional Conduct (2007)
http://www.lsc.qld.gov.au/__data/assets/pdf_file/0016/106225/unsatisfactoryprofessional-conduct.pdf, viewed 6/12/13.
Legal Services Commission, Annual Report 2012/2013 (2013)
http://www.lsc.qld.gov.au/__data/assets/pdf_file/0014/216104/Legal-ServicesCommission-2012-13-Annual-report.pdf, viewed 6/12/13.
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