DUTIES TO THE CLIENT Flashcards
SOURCES OF DUTY TO CLIENT
- Legal practitioner and client relationship is fiduciary in nature
› Therefore duties arise because of this relationship. - Contract of retainer
› Legal practitioner assumes contractual obligations in favour of their client.
› These are both express and implied.
The duty to act competently and diligently = example of implied. - Tort – legal practitioners owe a duty of care to their client
› Liable in negligence.
› Example = duty to act competently and diligently. - Statutory formulations of the duties, e.g. Legal Profession Uniform Laws
- The common law – still applies, not replaced by the uniform laws (common law cases used to determine whether the conduct falls within) – look at rule 2.2 of Legal Uniform Law Australian Solicitors Conduct Rules 2015.
DUTIES UNDER LEGAL UNIFORM LAW
› Duty to be competent
› Duty of loyalty
› Duty of confidence
RELATIONS WITH CLIENT UNDER UNIFORM LAWS
- Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015
› Relations with clients
7. Communication of advice
8. Client instructions
9. Confidentiality
10. Conflicts concerning former clients
11. Conflicts of duties concerning current clients
11A. Short-term legal assistance services
12. Conflict concerning a solicitor’s own interests
13. Completion or termination of engagement
14. Client documents
15. Lien over documents
16. Charging for document storage - Legal Profession Uniform Conduct (Barristers) Rules 2015
› 35. Duty to the client
› 36. A barrister must inform the client or the instructing solicitor about the alternatives to fully contested adjudication of the case…
› 37. A barrister must seek to assist the client to understand the issues in the case and the client’s possible rights and obligations,…
› 38. A barrister must (unless circumstances warrant otherwise in the barrister’s considered opinion) advise a client who is charged with a criminal offence about any law, procedure or practice which in substance holds out the prospect of some advantage (including diminution of penalty), if the client pleads guilty …
WHAT IS LAWYER COMPETENCE
- Not generally accepted meaning of what constitutes ‘lawyer competence’, as it is highly subjective depending on eyes of observer.
› i.e. client will determine based on outcome, judiciary will base it on their conduct during proceedings etc.
DUTY TO BE COMPETENT
- Hawkins v Clayton (1988) 164 CLR 539 at 580:
› The question must be answered by reference to the standard or measure of care which was reasonable in the circumstances. In the present case, that standard or measure of care was that indicated by Windeyer J. in Voli (4), namely, the care and skill to be expected of a qualified and ordinarily competent and careful solicitor in the exercise of his profession.
WORKING OUTSIDE CAPACITY, SKILL OR EXPERIENCE
- Legal practitioners should not accept work outside their capacity, skill or experience.
› Decline work you cannot competently perform.
OPTIONS WHEN RECEIVING WORK OUTSIDE SKILL, KNOWLEDGE OR EXPERIENCE
- A diligent practitioner who lacks knowledge or experience in a particular practice area should either:
› refer the client to another practitioner who does possess the relevant knowledge or experience (see Un v Schroter [2002] NTSC 2);
› with the client’s content, engage a specialist with the relevant knowledge or experience to advise the practitioner (LM v K Lawyers [2015] WASC 244); or
› obtain such the requisite knowledge through private study, research or collaboration with a practitioner who is competent in that practice area (provided it does not cause undue delay or cost to the client).
Client can consent to delay and additional costs if they only want that lawyer. But consent is essential. - Zandas and Zandas [2014] FCCA 1184 at [92]-[94]:
› … If a solicitor without experience in this jurisdiction is asked by a client to act, the proper course to adopt would be to brief a barrister who is an expert in the jurisdiction
WORK THAT CANT BE COMPLETED IN A TIMELY MANNER
- Legal practitioners should not accept work if they cannot reasonably complete the work in a timely manner.
› Legal Profession Board of Tasmania v Barclay [2022] TASSC 14 at [9]- [12]:
Delay and neglect will always constitute conduct capable of amounting to either unsatisfactory professional conduct or professional misconduct. … [The] length of the delay and the persistent failure to take any meaningful action over that period can only result in a finding that the conduct “involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence”
COMPLETING IN TIMELY MANNER UNDER UNIFORM LAWS
- Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015
› 4. Other fundamental ethical duties
4.1 A solicitor must also – …
4.1.3 deliver legal services competently, diligently and as promptly as reasonably possible
› 7. Communication of advice
7.1 A solicitor must provide clear and timely advice to assist a client to understand relevant legal issues and to make informed choices about action to be taken during the course of a matter, consistent with the terms of the engagement - Legal Profession Uniform Conduct (Barristers) Rules 2015
› 4. Principles These Rules are made in the belief that: …
(c) barristers as specialist advocates in the administration of justice, must act honestly, fairly, skilfully, bravely and with competence and diligence
WHAT IS THE DUTY OF LOYALTY
- The lawyer-client relationship is recognised as attracting fiduciary obligations and duties.
› Good faith and loyalty. - Breen v Williams (1996) 186 CLR 71 at 113 per Gaudron and McHugh JJ:
› In this country, fiduciary obligations arise because a person has come under an obligation to act in another’s interests. As a result, equity imposes on the fiduciary proscriptive obligations - not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict. … But the law of this country does not otherwise impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed.
Things they cant do, not what they must do.
WHAT ARE TWO THINGS THE DUTY OF LOYALTY ENCOMPASSES
- The duty of loyalty encompasses the duty “not to profit” and the duty of “no conflict”.
› The duty “not to profit” requires a legal practitioner to avoid conflicts of interest with respect to the practitioner obtaining an unauthorised benefit.
› The duty of “no conflict” requires a legal practitioner to avoid conflicts of interest with respect to former clients, current clients and practitioner’s own interests.
AVOIDING CONFLICT OF INTEREST WITH PRACTITIONERS OWN INTEREST
- A legal practitioner who engages in financial dealings with clients, beyond what is specified within the retainer, puts themselves in a position of conflict between their duty to the client and their own personal interest.
› EXCEPTION: Full disclosure to the client, and a prudent practitioner would advise and facilitate the provision of independent legal advice to ensure that informed consent is given by the client.
AKA needing consent. - Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 170:
› …Where a solicitor discovers that continuing to act for his client will, or may, bring the interests of his client and his own interests into conflict, it will be a rare case where he should not, at least, advise his client to take independent legal advice.
EXAMPLES OF CONFLICTS WITH PRACTITIONERS OWN INTERESTS
› Borrowing money from a client
See Law Society of New South Wales v Harvey [1976] 2 NSWLR 154
See Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015, Rule 12.3
› Lending to client
See Maguire v Makaronis (1997) 188 CLR 449
› Buying or selling from the client
See Re a Barrister and Solicitor (1979) 40 FLR 26
› Referral fees and commissions
See Maher v Millennium Markets Pty Ltd [2004] VSC 174
› Receiving a substantial benefit under a will
RECEIVING A SUBSTANTIAL BENEFIT UNDER A WILL
- An example of conflicts with practitioners own interests
A legal practitioner should not draw up a will for a client in which the practitioner, practitioner’s law practice or associate will or may receive a substantial benefit.
EXCEPTION: Provided the person instructing the practitioner is a member of the practitioner’s immediate family, spouse, a solicitor or an immediate family member of a solicitor.
Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 12. Conflict concerning a solicitor’s own interests Specifically see Rule 12.4.2.
INTERMATE RELATIONSHIP WITH CLIENT
› There is no prohibition on legal practitioners having a personal or intermate relationship with their client.
See Bar Association (Qld) v Lamb (1972) 45 ALJR 71
› Although it is not prohibited, it is generally advised that legal practitioners should not engage in intermate relationships with their client as it can be perceived as an abuse of power due to the power imbalance and dependency nature of the lawyer-client relationship.
EXCEPTIONS TO NO CONFLICT WITH OWN INTERESTS
› Full disclosure
› Informed consent – really to give this they need to be getting independent legal advice from someone who doesn’t stand to gain anything from it.
NO CONFLICT WITH OWN INTERESTS UNDER UNIFORM LAWS
- Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015
› 12. Conflict concerning a solicitor’s own interests
12.1 A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of a client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule. - Legal Profession Uniform Conduct (Barristers) Rules 2015
› 101. Briefs which must be refused or must be returned A barrister must refuse to accept or retain a brief or instructions to appear before a court if:
… (b) the client’s interest in the matter or otherwise is or would be in conflict with the barrister’s own interest or the interest of an associate
… (g) the barrister has a material financial or property interest in the outcome of the case, apart from the prospect of a fee
AVOIDING CONFLICT WITH FORMER CLIENTS
- Upon termination of retainer the fiduciary relationship between a legal practitioner and client, including the practitioner’s duty of loyalty to client, comes to an end. But the practitioner’s duty of confidentiality continues.
› Even after death, duty of confidentiality continues. - Dilemma of conflicting interests arises where a legal practitioner is retained by Party A to act against Party B, a former client of the practitioner or firm. The risk is that practitioner or firm may use confidential information obtained from Party B in new matter against the latter, thus breaching duty of confidentiality.
- General rule is that legal practitioner should not accept instructions from a client, if the opposing party is a former client of the practitioner or their firm.
- If legal practitioner proceeds to act for a client against a former client, the latter can apply to the court to disqualify the practitioner from acting for their new client.
› This DQ applies to the whole firm, even if they haven’t had info on the case.
WHO IS A FORMER CLIENT UNDER UNIFORM LAW
› Glossary of terms
… former client for the purposes of Rule 10.1, may include a person or entity that has previously instructed—
(a) the solicitor,
(b) the solicitor’s current law practice,
(c) the solicitor’s former law practice, while the solicitor was at the former law practice,
(d) the former law practice of a partner, co-director or employee of the solicitor, while the partner, co-director or employee was at the former law practice,
or, has provided confidential information to a solicitor, notwithstanding that the solicitor was not formally retained and did not render an account.
Prince Jefri Bolkiah v KPMG (a firm) [1992] 2 AC 222 at 369 per Lord Millett
› [To set the threshold at the level of probability] imposes an unfair burden on a former client, exposes him to a potential and avoidable risk to which he has not consented, and fails to give him a sufficient assurance that his confidence will be respected.
Threshold = Possibility not probability
* Possibility of misuse (this is UK). Australia has taken it futher (next case)
Wyndham City Council v CSR Ltd [1998] VSC 156 at [32] per Chernov J
› [The] Court does not act on the basis of mere possibilities … the possibilities must have a degree of reality and a degree of reasonableness and sense.
Need a real possibility that a misuse of info might arise.
TEST IN AUSTRALIA TO DETERMINE CONFLICT WITH CLIENTS
- Test in Australia: Is there a real possibility in the mind of the reasonable observer that confidential information given to the lawyer by the former client might be used by the lawyer to advance the interests of a new client to the detriment of the former client?
CONFLICTS WITH FORMER CLIENTS UNDER ASCR
› 10. Conflicts concerning former clients
10.1 A solicitor and law practice must avoid conflicts between the duties owed to current and former clients.
10.2 A solicitor or law practice who or which is in possession of information which is confidential to a former client where that information might reasonably be concluded to be material to the matter of another client and detrimental to the interests of the former client if disclosed, must not act for the current client in that matter UNLESS —
10.2.1 the former client has given informed consent to the disclosure and use of that information, or
10.2.2 an effective information barrier has been established.