AQ v ZI

JurisdictionNew Zealand
Judgment Date11 February 2011
Neutral Citation[2011] NZLCRO 15
Date11 February 2011
Docket NumberLCRO 105/2010
CourtLegal Complaints Review Officer

CONCERNING an application for review pursuant to Section 193 of the Lawyers and Conveyancers Act 2006

and

CONCERNING a determination of the Auckland Standards Committee Number 2

BETWEEN
AQ

of Auckland

Applicant
and
ZI

of Auckland

Respondent

[2011] NZLCRO 15

LCRO 105/2010

Application for review of Standards Committee decision declining to take further action in respect of applicant's complaint regarding fees billed — law firm instructed for Family Protection Act claim — invoiced on a monthly basis — costs exceeded estimate provided — practitioner delayed providing an estimate of remaining costs when requested under Rule 9.4 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 — whether practitioner engaged in unsatisfactory conduct and if so whether final bill should be reduced.

Counsel

AQ as the Applicant

ZI as the Respondent

ZH as an Interested Party

The Auckland Standards Committee Number 2

The New Zealand Law Society

DECISION
Background
1

In July 2008, the firm of AAM (AAM) was instructed by the Applicant on behalf of himself, one of his sisters, and the husband and family of a deceased sister, in connection with a family protection claim against his late father's estate.

2

The file was assigned to the Respondent, a senior solicitor in the firm, with Mr ZH (ZH) as her supervising partner.

3

As required by the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (Client Care Rules), AAM provided certain information relating to its services to the Applicant at the commencement of its retainer, including its terms of engagement. Included in these was the firm's billing policy, which was to send monthly accounts on an interim basis where there was an ongoing matter.

4

Bills were sent regularly and paid by the Applicant as the matter progressed, and the Applicant has no issue with bills rendered up to 22 October 2008.

5

However, by that time, even with a considerable “discount” on the time recorded, the Applicant and other members of the family whom he represented, were becoming concerned that the costs incurred were going to exceed the anticipated overall costs of $50,000.00.

6

In addition, the Applicant noted inconsistencies in subsequent bills received by him in January and March 2009.

7

On 2 April 2009, the Applicant made his concerns about these inconsistencies known to the Respondent, and also requested an indication of all possible costs from that point onwards.

8

On 3 May 2009, he sent a follow-up email requesting a response to his request.

9

Having received no response to either of these emails, he then sent an email to ZH on 19 May 2009 in which he requested a response to his emails, and withdrew his credit card authorisation for payment of accounts until the matters were satisfactory addressed.

10

This produced a response from ZH on 25 May 2009 in which he enclosed a detailed estimate of costs to conclude the matter, together with advice as to the best way forward.

11

The matter proceeded from there to a Judicial Settlement Conference (JSC) on 26 August 2009, at which a settlement was reached.

12

After the letter from ZH on 25 May 2009, the Applicant had received one bill for

$3,744.00 on 23 July 2009, and following settlement, a final bill on 9 December 2009. On receipt of this final bill, the Applicant raised the various issues relating to costs that are the subject matter of his complaint and this review.

13

As part of an attempt to resolve the matter, AAM agreed to reduce its bill from

$20,000.00 to $17,800.00 plus GST plus disbursements.

14

The Applicant remained dissatisfied with the explanations provided by the Respondent to his queries and lodged a complaint with the Complaints Service of the New Zealand Law Society on 18 February 2010.

The Complaint
15

The matters raised with the Complaints Service were the matters that had previously been raised with the Respondent and AAM and related to:

  • • The inconsistencies in the bills of account including apparent duplication of time records,

  • • The cost overrun,

  • • The costs incurred in having two lawyers from AAM attend the JSC.

The Standards Committee Decision
16

The Standards Committee proceeded with a consideration of the matters raised but did not appoint a Costs Assessor to consider the overall fees charged by AAM.

17

It issued its decision on 21 May 2010 in which it advised that following a consideration of the matter, no further action was to be taken in respect of the complaint.

18

This decision was issued pursuant to section 138(2) of the Lawyers and Conveyancers Act 2006 (the Act) which provides the Standards Committee with a discretion not to take any further action on a complaint if it appears to the Committee that, having regard to all of the circumstances of the case, any further action is unnecessary or inappropriate.

19

This decision was arrived at on the basis that the Committee accepted the explanations from the Respondent and noted in particular, that practitioners did not only charge fees based on a time in attendance, but were entitled to take into account all factors as set out in Rule 9.1 of the Client Care Rules. These factors were listed in the Standards Committee's decision.

20

The Committee also noted that some confusion appeared to have arisen over amounts discussed between AAM and the Applicant in that AAM referred to GST exclusive figures, whereas the Applicant thought they were GST inclusive figures.

21

The Committee also noted the apology from the Respondent for any distress her mistake may have caused the Applicant when she had simply and mistakenly failed to note his incoming emails requesting an estimate of the costs to conclude the matter.

The Application for Review
22

The Applicant has applied for a review of the Standards Committee's decision.

23

He considers that the Standards Committee appears to have accepted nearly all of the statements from the Respondent on face value without question.

24

He also expresses concern as to the Committee's acceptance of the Respondent's explanation for not replying to his request for an estimate and refers to the “computer errors” arising after October 2008.

25

He alleges alteration of time sheets and computer records, and in general terms seeks a review of all of the matters put before the Standards Committee.

The Review
26

The parties have consented to this review being conducted on the basis of the information and materials available to me which include the Standards Committee file and the materials filed in conjunction with this Application.

The Bills
27

The content and timing of the bills rendered by AAM are at the heart of this matter.

28

The Applicant has no issues with invoices received up to and including invoice AK 6057732 which was in respect of attendances to 22 October 2008.

29

The next bill (invoice AK6087544) was dated 22 December 2008 and was for

$2,486.25. This was received by the Applicant on 23 January 2009.

30

In his letter to the Law Society, the Applicant states that the narration on this bill was for the period from 28 October 2008 to 15 December 2008. The only reference to the period covered by the bill itself, is at the beginning of the account, which records that it is for “professional services over the last few months”. However, in the covering letter from the Respondent, she states that this bill is for work done during December 2008.

31

This is clearly wrong. The time sheets received by the Standards Committee but not available to the Applicant at the time, show that invoice number [number] covers the period from 28 October to 14 November.

32

Given the narration in the account and the statement made by the Respondent, the Applicant understood that costs were billed to date as set out in the firm's Terms of Engagement.

33

The next bill [number] was dated 19 March 2009 for the sum of $10, 910.25.

34

Again, the narration in this bill refers to “professional services over the last few months”.

35

Referring to the time sheets, this bill covers attendances from 2 December 2008 to 12 March 2009. This was not clear to the Applicant as no dates are provided on the narration attached to the bills of account.

36

He was somewhat puzzled by the extent of this bill, given his understanding that the previous bill had covered costs to the end of December and that there had been limited attendances since then.

37

It was at this stage that the Applicant requested, and subsequently received on 25 May 2009, the estimate of costs to conclude the matter.

38

The next bill was received on 21 August 2009 although the bill itself is dated 23 July 2009. This bill [number] was for $3,744.00.

39

The Applicant was assured by the Respondent that this was the only bill she was aware of and, being aware of the firm's Terms of Engagement, and past invoicing, the Applicant again understood that the bill included all costs to date.

40

That was incorrect. Invoice [number] inexplicitly relates only to a period from 13 to 20 March 2009.

41

Following settlement of the claim, a final bill dated 23 September 2009 was compiled by the Respondent and forwarded to the Applicant on 25 September 2009. This bill [number] was for $22,545.18 being $20,000.00 fees plus GST plus disbursements. This bill had been reduced from time recorded of $23,677.00 and had consequently being significantly discounted by AAM at that stage.

42

The end result of these bills, however was that the Applicant had received bills totalling $26,289.18 (GST included) in respect of work for which he had received an estimate of $14,000.00 (GST included) plus work in progress at the time of the estimate.

Duplication of Records
43

The Applicant refers to the narration accompanying the two bills of account dated 23 July 2009 and 23 September 2009. He points out...

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