RM v LN
| Jurisdiction | New Zealand |
| Judgment Date | 02 October 2012 |
| Neutral Citation | [2012] NZLCRO 89 |
| Date | 02 October 2012 |
| Docket Number | LCRO 106/2011 |
| Court | Legal Complaints Review Officer |
Concerning an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
and
Concerning a determination of Auckland Standards Committee 4
[2012] NZLCRO 89
LCRO 106/2011
Application for review under s193 Lawyers and Conveyancers Act 2006 (right of review) of an Auckland Standards Committee determination which found that the applicant had breached r3.1 (respect and courtesy), r3.6 (providing updated information), r9 (reasonable fees) and r9.6 (final account) Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 — respondent engaged applicant to seek damages in relation to drainage problems on a property she had purchased — respondent withdrew proceedings and settled directly with the Council — whether applicant was rude and discourteous in meetings and communication and fees were substantially over the estimate given.
RM as the Applicant
RN as the Representative for the Applicant
LN as the Respondent
Auckland Standards Committee 4
New Zealand Law Society
DECISION
RM has applied for a review of the determination by Auckland Standards Committee 4 in which it found that RM had breached Rules 3.1, 3.6, 9 and 9.4 of the Conduct and Client Care Rules 1, ordered RM to reduce his fees and ordered him to pay costs to the New Zealand Law Society.
In his review application, RM accepted the findings of the Committee with regard to the breaches of Rules 9 and 9.4 and the Orders to reduce his fees, and requested that the review focus on the findings of breaches of Rules 3.1 and 3.6 and the order to make payment of costs.
LN instructed RM and his firm to act on her behalf to seek compensation for drainage problems encountered with her new property.
The day to day carriage of the file was undertaken by RO, a solicitor in the firm, with RM acting in a supervisory role.
Both RM and RO had contact with LN in connection with the file and although the Standards Committee determination (and consequently this review) relates to RM, LN's complaint referred to both lawyers.
Proceedings were issued against the developer / vendor and the Council.
A judicial settlement conference took place in September 2009 which for various reasons was unsuccessful.
LN was not in a position to incur significant legal costs and made it clear that she did not want to incur the costs of a court hearing.
Following the unsuccessful joint settlement conference, LN withdrew her instructions and settled the matter directly with the Council.
LN complained that the advice from RM and RO had encouraged her to commence proceedings against the Council when it would have been in her interests to have pursued the matter through the Disputes Tribunal. She complained that as a result, she had incurred costs which had not only exceeded estimates provided by RM, but had also not produced a satisfactory result for her.
She also complained that RM and RO were rude and discourteous in their dealings with her, talked down to her, and generally, that their relationship with her was poor.
Having considered all of the material provided, the Standards Committee determined that it did not have jurisdiction to consider the bills of costs rendered prior to 1 August 2008.
In respect of the bills of costs after that date, it determined that there had been breaches of Rules 9 and 9.4 of the Conduct and Client Care Rules and ordered that the fees be reduced.
In addition, the Committee found that RM had breached Rules 3.1 and 3.6 of the Conduct and Client Care Rules. No Orders were made in respect of those breaches, but RM was ordered to pay the sum of $1,000.00 by way of costs to the New Zealand Law Society.
LN instructed RM in March 2008. On 1 August 2008, the Lawyers and Conveyancers Act 2006 came into force and it was therefore necessary for the Standards Committee to separately consider the billing and conduct before and after that date. It is not necessary for me to traverse the issues relating to this as the Standards Committee has addressed the issue in its determination at paragraph [15].
Although the Committee's determination referred only to billing prior to 1 August 2008, it did not make any adverse findings in respect of the other conduct complained of prior to that date, and I concur with that determination.
I propose to address a number of preliminary issues in the first instance to establish the parameters of this review. I have noted that although the Committee stated in paragraph [17] of its determination that RM had failed to keep LN informed and to progress matters in a timely fashion, it did not make a specific finding of a breach of Rule 3 of the Conduct and Client Care Rules. 2 In addition, although the Notice of Hearing identified an issue as being the firm's performance at the judicial settlement conference no specific finding was made in this regard.
The outcome of this review is that the determination of the Standards Committee is confirmed, other than where specifically modified or reversed, and consequently the position in respect of both issues will be confirmed. I have not considered it necessary to take these matters any further but confirm that I am aware of these omissions. 3
A review applicant cannot determine which parts of a Standards Committee determination is to be reviewed. Whilst an Applicant is invited to provide reasons for applying for a review and to identify matters which the Applicant thinks should be considered, the LCRO may review all or any of the aspects of the enquiry and the Standards Committee determination. 4
In this instance, RM advised that he accepted the finding of the Standards Committee that he had breached Rules 9 and 9.4 and that he accepted the orders to reduce his fees as directed by the Committee.
Not unexpectedly, LN has not expressed any dissatisfaction with these findings and I consider that there is no reason for me to review this aspect of the Standards Committee determination.
Accordingly, those findings and orders of the Standards Committee will be confirmed.
The Standards Committee determined that “[RM] had failed to adhere to the fee estimate and had not kept the client informed on that front and that this constituted a breach of Rules 3.6 and 9.4 of the Rules of Conduct and Client Care.” 5
Rule 3.6 of the Conduct and Client Care Rules provides as follows
If information provided by a lawyer in terms of rule 3. 4 or 3.5 becomes inaccurate in a material respect, the lawyer must ensure that the information is updated with due expedition. Rules 3.4 and 3.5 are complied with where a lawyer has previously provided a client with the information required and the information remains accurate.
Rules 3.4 and 3.5, insofar as they refer to the provision of information about fees, require a lawyer to advise the basis on which fees will be charged, when payment of fees is to be made, and whether the fee may be deducted from funds held in trust on behalf of the client.6 There is no reference to fee estimates in those Rules. Fee estimates and the requirement to inform the client if an estimate is to be exceeded is covered by Rule 9.4.
The Standards Committee was therefore incorrect in finding that RM had breached Rule 3.6 and the determination will be reversed in that regard.
RN (on behalf of RM) has drawn my attention to what he considers are factual errors in the Standards Committee determination.
An obvious error is contained in paragraph [12] of the Standards Committee determination, where the Committee recorded that RM had sought a second opinion from another law firm. This is incorrect as it was LN who had sought the second opinion. The Standards Committee determination will be modified in this regard.
RN also submits that the Judge did not state at the judicial settlement conference that there was insufficient evidence to take the matter to Court as recorded in paragraph [11] of the Standards Committee determination. There is disagreement between the parties in this regard. Without a record of the judicial settlement conference, the alleged statement cannot be verified, but the determination of the Standards Committee does need to be modified to take note that the Judges' statement should not be recorded as a matter of fact, but as an allegation by LN that this was what the Judge stated.
Finally, I note that although LN's complaint was in respect of both RM and RO, the Standards Committee proceeded with the matter as a complaint against RM only. At the review hearing, I asked LN whether she wished to have the complaint against
RO considered separately, in which case I would refer this aspect of the matter back to the Standards CommitteeLN advised that her complaint was in the main against RM, and indicated that she did not wish to pursue a separate complaint against RO. Accordingly, the matter is best resolved by recording that the complaint against RO referred to in the letter of complaint to the Standards Committee is withdrawn.
RO's conduct is therefore of limited relevance to this review, insofar as RM cannot be accused of being vicariously responsible for any conduct by RO that was considered to be rude or discourteous.
This review is therefore narrowed down to a consideration of the finding of a breach by RM of Rule 3.1 of the Conduct and Client Care Rules.
That Rule provides as follows
A lawyer must at all times treat a client with respect and courtesy and must not act in a discriminatory manner in contravention of section 21 of the Human Rights Act 1993.
The Notice of Hearing dated 1 December 2010 advised that the issues raised by the alleged conduct...
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