Wellington Standards Committee No. 2 v Charl Benno Hirschfeld
 NZLCDT 48
NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL
Judge D F Clarkson
Members of Tribunal
Mr W Chapman
Ms J Gray
Mr K Raureti
Mr P Shaw
In The Matter of the Lawyers and Conveyancers Act 2006
Mr C Gudsell QC and Ms C Paterson for the Standards Committee
Mr R Harrison QC for the Practitioner
Decision as to penalty following practitioner's guilty plea to 12 charges of negligence such as would tend to bring the profession into disrepute — practitioner had overcharged the Legal Services Agency by $1,368 — irregularities in billing practices caused by lack of on-the-day electronic time recording — Standards Committee sought two to three year suspension and reimbursement of costs in the prosecution of almost $152,000 — whether a penalty of suspension would be in proportion to the offending — whether a no tolerance of mistakes policy should be adopted towards legal aid billing — whether there had been overcharging in and over — engineering of the prosecution
The issues were: whether a penalty of suspension would be in proportion to the offending; whether a no tolerance of mistakes policy should be adopted towards legal aid billing; and whether there had been overcharging in and over — engineering of the prosecution.
Held: H's explanations for invoicing for appearances prior to his assignment were criticised as conflating “… the distinct concepts of ‘assignment’ and instructions”. Clearly that was an error but it was likely to be a fairly common error among practitioners, particularly if there was gap between the client seeking to instruct and an assignment being confirmed.
As to the incorrect hearing dates, H did not claim for any non — existent hearing dates but rather gave incorrect dates which he explained as typographical errors. What had initially appeared as possibly sinister was simply a date error with no harm done to the LSA and in turn the taxpayer.
In respect of invoices in which H claimed for appearances which were in fact carried out by other practitioners, this error was also admitted from the outset by H. However in respect of this category of conduct he also pleaded “custom and practice” of other criminal legal aid barristers. H had called evidence from 17 barristers, some as to character, and many as to the practice of invoicing for an agent's appearance at the lead provider's rate. The Summary of Facts did not refer to this issue, nor was the evidence of these numerous barristers required to be tested. There was a wealth of material in the evidence, indicating that there were at times inconsistent practices and confusing messages emanating from the LSA to practitioners
The method of billing used was clearly unreliable, given that it allowed the lawyer to make the errors admitted.
It was accepted that the legal aid billing system relied on trust in the lawyers rendering accounts. Anything less than honesty and accuracy in billing practices could not be endorsed.
Given the relatively small number of invoices under consideration, comparatively, and the low “overpayment” figure, there was concern as to the paucity of evidence of a broader picture. No such figures were contained within the evidence or even the Summary of Facts, and the low level of overcharging agreed ($1,368) appeared to have been “skimmed over”, despite the enormous effort which had been put into preparation and documentation of this case. The Committee later provided further information of criminal legal aid billing of $295,000 during the relevant period, which better put in perspective the $1,368 of negligent charging, although it only reflected a small fraction of H's overall billing for the period.
H raised over 1,300 invoices for the relevant period, and many thousands over the previous audited periods. Even taking the limited figures of $1,368 of $295,000, it had to be recognised that this was a very small error rate. It did not justify the description given by the Committee of “an inherently flawed invoicing system”. Although there were a number of different forms of errors made by H, mostly they arose from his method of time recording and invoicing. There was no evidence to suggest any deliberate pattern of cheating the system or any other intentional wrongdoing.
The committee argued that there should be no threshold test as to what error rate could be seen as negligence, in other words, no mistake was tolerable. This argument was rejected. It could not be correct in circumstances where the Tribunal had to analyse behaviour on a continuum of culpability or seriousness of conduct. In doing so, it had to employ some perspective. That was why proportionality was important. Proportionality also went to motivation and assessment of honesty — why would a lawyer who had rendered gross fees to LSA of $17 million attempt to cheat the system for $1,368?
The level of negligence was at the lower end of the scale. It came nowhere near the “gross negligence” alleged.
The contravention of the LSA's assignment policy, the contract and the Legal Services Act were not to be regarded as a separate category of negligence.
Claiming for non — listed providers was more serious. There were instances of delegation to non — listed providers in about 25 percent of the 32 hearings under consideration in the charges. This was significantly careless and ought to be regarded as an aggravating feature of the overall negligence.
The Committee's assertions that H had displayed “a significant lack of transparency” and “throughout the Tribunal disciplinary process…. failed to acknowledge any wrongdoing at all” were rejected as lacking balance.
H was entitled to credit for 30 years of previously positive contribution to his profession. He had suffered adverse consequences from the investigation including closing down his chambers, emotional distress, the breakdown of his marriage and financial destruction. He had also suffered a stress induced heart attack. These consequences had been so serious that account had to be taken of them as having had a punitive consequence before any penalty was imposed by the Tribunal.
There was no need for specific deterrence for this lawyer. However it was important to deter other lawyers from casual or sloppy billing practices where public, or private, money was involved. The “least restrictive intervention” principle, articulated in should be applied.
H was a practitioner with high professional standards who had, according to all the evidence, served his clients well in the past. He did not pose any risk to the public. Suspension was not required to satisfy the purposes of penalty and the objects of the Lawyers and Conveyancers Act 2006 (protection of the public and the maintenance of the reputation of the legal profession, to ensure public confidence in the provision of legal services). This conclusion reflected the level of culpability, that is, relatively low level negligence, and had regard to the aggravating and mitigating features, particularly the adverse consequences suffered by H as a result of these proceedings.
There was a lack of focus in the prosecution. A great deal of time was spent on ancillary matters which the Standards Committee specifically determined were not to be the subject of charges. There had been overcharging. The entire structure (12 charges) and conduct of the prosecution had been “over — engineered”, having regard to the quantum of overcharging established ($1,368). This was in the end a penalty hearing only, based on a lengthy, negotiated Summary of Facts, (which was very repetitive, as were many of the charges). By comparison with more complex cases, the costs in this matter appeared to be out of step and unreasonably high. The Standards Committee may well have considered a strong stance in its prosecution was justified as it came in the wake of the Bazley report into legal aid practices. However H did not fit the category referred to by the author of the Report.
The practitioner's financial circumstances were dire and any award of costs against him would have to be the subject of some instalment order. H ordered to repay $1,368 to the NZLS, contribute $20,000 to the Standards Committee costs, and reimbursement the NZLS for 50 percent of the Tribunal's costs ($16,000).
In June 2009, Charl Hirschfeld sent an invoice to the complainant, the Legal Services Agency (LSA), purportedly in respect of services he had carried out for his client. This invoice, and 16 others, proved to be incorrect in a number of material respects. This decision concerns the penalty to be imposed on Mr Hirschfeld as a consequence of these admitted errors.
Mr Hirschfeld, a practitioner of 30 years experience, who has had an unblemished career until now, has pleaded guilty to 12 charges of negligence such as would tend to bring the profession into disrepute. That is an alarming number of charges but arises because the 12 charges, as framed, relate to 12 different clients to whom he was assigned counsel and in respect of whom incorrect invoices were rendered. The types of errors fall broadly into three categories:
- Claiming for the payment at the practitioner's own rate for hearings attended not by him personally but by another practitioner who was not identified as a secondary listed provider and, on some occasions, was not yet a listed provider at all. 2. Claiming for appearances on dates where no hearings had been held. These errors transpired to have been...
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