LPUL 2015 (NSW) Business Practice & Professional Conduct

Question 1

s 127 Trust Money

Answer 1

Objective –. protect the interests of person whose trust money is being held for.

Question 2

s 128 Trust Money

Answer 2

Definitions

controlled money
means money received or held by a law practice in respect of which the law practice has a written direction to deposit the money in an account (other than a general trust account) over which the law practice has or will have exclusive control;

transit money
means money received by a law practice subject to instructions to pay or deliver it to a third party, other than an associate of the law practice;

trust property
means property entrusted to a law practice in the course of or in connection with the provision of legal services by the law practice for or on behalf of another person, but does not include trust money;

Question 3

s 129 Trust Money

Answer 3

Meaning of trust money

(1) trust money includes
(a) money received by the law practice for legal costs in advance of providing the services; and
(b) controlled money; and
(c) transit money; and
(d) money received by the law practice, that is the subject of a power exercisable by the law practice or an associate of the law practice, to deal with the money for or on behalf of another person.

(2) Not trust money
(a) money received by a law practice for legal services that have been provided and in respect of which a bill has been given to the client;
etc

Question 4

s 133 Trust Money

Answer 4

Receiving or holding money by or on behalf of barristers on account of legal costs for legal services

Question 5

s 134 Trust Money

Answer 5

Provisions relating to certain money
(1) If a law practice receives or holds money that is non-trust money, it must give the person who provided the money written notice that—
(a) the money will not be treated as trust money; and
(b) the money is not subject to the provisions relating to trust money in this Law or the Uniform Rules; and
(c) a claim against the fidelity fund of this jurisdiction cannot be made in respect of the money.
Civil penalty: 100 penalty units.

Question 6

s 135 Trust Money

Answer 6

Dealing with trust money

Question 7

s 136 Trust Money

Answer 7

Law practice must maintain a trust account

Question 8

s 137 Trust Money

Answer 8

Certain trust money to be deposited in general trust account
A law practice must deposit trust money (other than cash) into the law practice’s general trust account as soon as practicable after receiving it unless—

(a) the law practice has a written direction by a person legally entitled to provide it to deal with the money otherwise than by depositing it in the account; or
(b) the money is controlled money or transit money; or
(c) the money is the subject of a power given to the practice or an associate of the practice to deal with the money for or on behalf of another person.

Civil penalty: 100 penalty units.

Question 9

s 138 Trust Money

Answer 9

Holding, disbursing and accounting for trust money in general trust account

(1) Except as otherwise provided in this Part, a law practice must—
(a) hold trust money deposited in the law practice’s general trust account exclusively for the person on whose behalf it is received; and
(b) disburse the trust money only in accordance with a direction given by the person.

Civil penalty: 50 units

Question 10

s 139 Trust Money

Answer 10

Controlled money regulations

Question 11

s 140 Trust Money

Answer 11

Transit money regulations

Question 12

s 143 Trust Money

Answer 12

Trust money received in the form of cash $$$

(1) A law practice MUST DEPOSIT all trust money received in the form of CA$H (other than controlled money) in the law practice’s general trust account ASAP after receiving the money, even if it has a written direction to deal with it in some other way. ONCE DEPOSITED, the money may be dealt with in accordance with the written direction.
Civil penalty: 50 penalty units.

(2) A law practice must deposit CONTROLLED MONEY received in the form of cash in a controlled money account and deal with it in accordance with the Uniform Rules.
Civil penalty: 50 penalty units.

Question 13

s 144 Trust Money

Answer 13

Withdrawal of trust money
(1) A law practice must not withdraw trust money from a general trust account otherwise than by cheque or electronic funds transfer.
Civil penalty: 50 penalty units.

(2) what the practice may do with the trust money, e.g. exercise lien etc.

Question 14

s 145 Trust Money

Answer 14

Protection of trust money
(1) Money standing to the credit of a trust account maintained by a law practice is not available for the PAYMENT OF DEBTS of the law practice or any of its associates.

(2) Money standing to the credit of a trust account maintained by a law practice is not liable to be attached or taken in execution for SATISFYING A JUDGMENT against the law practice or any of its associates.

Question 15

s 146 Trust Money

Answer 15

Intermixing money
A law practice MUST NOT MIX trust money with other money unless authorized to do so by the designated local regulatory authority, and only in accordance with any conditions the designated local regulatory authority imposes in relation to that authorization.

Question 16

s 147 Trust Money

Answer 16

Keeping trust records
(1) A law practice must keep in permanent form trust records in relation to trust money received by the law practice.

(Plus other conditions)

Question 17

s 148 Trust Money

Answer 17

Deficiency in trust account

A law practice, an Australian legal practitioner or any other person must not, without reasonable excuse, cause—
(a) a deficiency in any trust account or trust ledger account; or
(b) a failure to pay or deliver any trust money.
Penalty: 500 penalty units or imprisonment for 5 years, or both.

Question 18

s 154 Trust Money

Answer 18

Reporting irregularities and suspected irregularities
(1) (see LPUL)

(2) If an Australian legal practitioner believes on reasonable grounds that there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice of which the practitioner is not a legal practitioner associate, the practitioner MUST, ASAP after forming the belief, give WRITTEN NOTICE of it to the designated local regulatory authority.

Question 19

s 155 Trust Money

Answer 19

Appointment of external examiner to conduct external examination of trust records

(1) A law practice must once in each financial year have its trust records EXTERNALLY EXAMINED by a suitably qualified person appointed in accordance with the Uniform Rules as an external examiner.
Civil penalty: 50 penalty units.

(plus other conditions)

Question 20

s 172 Legal costs

Answer 20

Legal costs must be FAIR AND REASONABLE

(1) A law practice must, in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are—
(a) proportionately and reasonably incurred; and
(b) proportionate and reasonable in amount.

(2) & (3) factors that impact what is “fair and reasonable”
(4) costs agreement is prima facie evidence that costs are fair and reasonable

Question 21

s 173 Legal costs

Answer 21

Avoidance of increased legal costs

A law practice must not act in a way that unnecessarily results in increased legal costs, and must act reasonably to avoid unnecessary delay resulting in increased legal costs.

Question 22

s 174 Legal costs

Answer 22

Disclosure obligations of law practice regarding clients

(1) Main disclosure requirement
A law practice—
(a) must, when or ASAP after instructions are initially given in a matter, provide the client with information disclosing the BASIS ON WHICH LEGAL COSTS WILL BE CALCULATED in the matter and an ESTIMATE of the TOTAL legal costs; and
(b) “…” ANY SIGNIFICANT CHANGE to anything previously disclosed under this subsection, provide the client with information disclosing the change, including information about any significant change to the legal costs that will be payable by the client—
together with the information referred to in subsection (2).

Question 23

s 175 Legal costs

Answer 23

Disclosure obligations if another law practice is to be retained

Question 24

s 177 Legal costs

Answer 24

Disclosure obligations regarding settlement of litigious matters

Question 25

s 178 Legal costs

Answer 25

Non-compliance with disclosure obligations

(1) If a law practice contravenes the disclosure obligations of this Part—
(a) the costs agreement concerned (if any) is void; and
(b) client doesn’t have to pay
(c) firm can’t begin or maintain proceedings until costs have been assessed.
(d) capable of being UPC or PM

Question 26

s 179 Legal costs

Answer 26

Client’s right to costs agreement

A client of a law practice has the right to require and to have a negotiated costs agreement with the law practice.

Question 27

s 180 Legal costs

Answer 27

Making costs agreements

Question 28

s 181 Legal costs

Answer 28

Conditional costs agreements
(1) A costs agreement (a conditional costs agreement) may provide that the payment of some or all of the legal costs is conditional on the successful outcome of the matter to which those costs relate.

(plus other conditions)

Question 29

s 182 Legal costs

Answer 29

Conditional costs agreements involving uplift fees

(1)(b) must not exceed 25%

Question 30

s 183 Legal costs

Answer 30

Contingency fees are prohibited
(1) A law practice must not enter into a costs agreement where the amount payable to the law practice is 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.

Question 31

s 185 Legal costs

Answer 31

Certain costs agreements are void
(1) A costs agreement that contravenes, or is entered into in contravention of, any provision of this Division is void.

(plus other conditions)

Question 32

s 186 Legal costs

Answer 32

Form of bills

A bill may be in the form of a lump sum bill or an itemised bill.

Question 33

s 187 Legal costs

Answer 33

Request for itemised bills
Can be requested, must be made within 30 days of costs being payable. Law practice must provide itemized bill within 21 days of receiving request.

Question 34

s 190 Legal costs

Answer 34

Clients entitled to progress reports

Question 35

s 191 Legal costs

Answer 35

Charging for bills prohibited
A law practice must not make a charge for preparing or giving a bill, and any charge made for that purpose is not recoverable by the law practice.

Question 36

s 192 Legal costs

Answer 36

Must notify a client of their rights

Question 37

s 193 Legal costs

Answer 37

Interim bills
(1)  A law practice may give a person an interim bill covering part only of the legal services the law practice was retained to provide.

Question 38

s 195 Legal costs

Answer 38

Interest on unpaid legal costs

Question 39

s 198 Legal costs

Answer 39

Applications for costs assessment

Question 40

s 199 Legal costs

Answer 40

Costs assessment
(1) Assessments of legal costs are to be conducted by costs assessors, and are to be conducted in accordance with this Part, the Uniform Rules and any applicable jurisdictional legislation.

(2) On a costs assessment, the costs assessor must—
(a) determine whether or not a VALID COSTS AGREEMENT exists; and
(b) determine whether legal costs are FAIR AND REASONABLE and, to the extent they are not fair and reasonable, determine the AMOUNT of legal costs (if any) that are to be PAYABLE.

Question 41

s 200 Legal costs

Answer 41

Factors in a costs assessment

Question 42

s 210 Professional Indemnity Insurance

Answer 42

Approved insurance policy

Question 43

s 211 Professional Indemnity Insurance

Answer 43

An Australian legal practitioner must not engage in legal practice in this jurisdiction unless the practitioner holds or is covered by an approved insurance policy for this jurisdiction and the policy covers that legal practice.
Civil penalty: 100 penalty units.

Question 44

s218 Fidelity cover

Answer 44

Objective:
establish a fidelity cover scheme so that people who suffer monetary loss because of defaults by law practices are able to claim compensation for defaults caused by acts or omissions of associates of law practices

Question 45

s 221 Fidelity cover

Answer 45

Defaults to which this Part applies
(1) This Part applies to a default of a law practice only to the extent that it occurs in connection with the provision of legal services by the law practice.