Wellington Standards Committee v 2 Papali'i Toti Lagolago
 NZLCDT 25
NEW ZEALAND LAWYERS AND CONVEYANCERS DISCIPLINARY TRIBUNAL
Judge D F Clarkson
Members of Tribunal
Mr M Gough
Mr G McKenzie
Mr K Raureti
Mr B Stanaway
In the Matter of the Lawyers and Conveyancers Act 2006
Ms K Feltham for the Standards Committee
Mr A Beck for the Practitioner
Charges brought by the Standards Committee arising from a barrister's representation of clients in the District Court (DC) — DC judge had been highly critical of the bringing and conduct of the proceedings — the outcome was that a debt of around $11,00, capable of being resolved in the Disputes Tribunal without legal fees, was escalated into a two-day hearing in the DC where there was judgment for $45,000 — whether s50 Evidence Act 2006 (Civil judgment as evidence in civil or criminal proceedings) precluded the DC Judge's comments being adduced in evidence — whether the barrister had failed to adequately advise her clients as to alternatives to litigation contrary to r13.4 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 — whether the barrister had failed to give clients informed independent advice contrary to r13,3 — whether the pleadings and conduct of the case were objectively so flawed and unlikely to succeed that it amounted to negligence.
The issues were: whether s50 Evidence Act 2006 (EA) (Civil judgment as evidence in civil or criminal proceedings) precluded the DC Judge's comments being adduced in evidence; whether L had failed to adequately advise her clients as to alternatives to litigation contrary to r13.3 Conduct and Client Care Rules (Informed Instructions); whether the pleadings and conduct of the case were objectively so flawed and unlikely to succeed that it amounted to negligence.
Held: It was accepted, in the recent decision of the full Court in that the Tribunal could accept adverse judicial comments contained in a judgment pursuant to its discretion under s239 Lawyers and Conveyancers Act 2006 (LCA) (Evidence). Section 239(1) governed s50 EA. It was a matter for the Tribunal as to what weight it accorded the judicial comment having regard to that evidence, considered with all other evidence, including explanations by the practitioner.
The remarks quoted were clearly relevant to the issues to be determined. As comments made by an experienced Judge, having conducted a two-day hearing, they were to be accorded considerable weight, taking account of the practitioner's explanations.
Rule 13.4 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 required that a lawyer assisting a client with the resolution of a dispute had to keep the client advised of alternatives to litigation that are reasonably available. L did not herself have clear enough understanding of the risks associated with the proposed litigation to assist her clients to make “informed decisions” regarding the settlement offer.
Around the time when the offer was received L appeared confused about her role and the extent to which she should be active in the process. Given the level of the offer (that is, how advantageous it seemed) it was her obligation to thoroughly assess at that stage the merits of alternative action, namely the litigation which was being urged by her client. Instead, she appeared to have accepted her client's somewhat paranoid view that because the offer was so low that they ought to be suspicious of it and that in any event they wished to proceed to claim for harassment.
It was clear that at this stage the practitioner had not researched whether any such harassment claim was, objectively, a sound one. Furthermore, she did not get her clients in to see her together and thoroughly canvass the merits of proceeding or otherwise. It was important that practitioners objectively assesse the merits of settlement offers and advised their clients dispassionately, removed from the type of emotional interpretations which clients might adopt. That was the very reason for proper independent legal advice. L failed in her obligations in this regard.
L should have corrected the Fs' misapprehensions about the Disputes Tribunal process. She had written to F confirming her oral advice that the Disputes Tribunal was a preferable course. But her discussions with F centred on fees to cover the lawyer's work, rather than actual discussions about the nature of the claim to be made and a clear elucidation of the likely prospects of success. Further her advice on the harassment claim while fairly wide-ranging was confusing and because L had misconceived a claim under the Harassment Act, she could not be said to have fully advised F as to the merits of commencing the proceedings.
L had fully advised F as to the risks of the proceeding in a series of letters. F had acknowledge advice that she might have to pay $50,000 if she lost.
Opposing counsel had pointed out what appeared to be very major flaws and warned that they would seek indemnity costs should the matter proceed. The practitioner, who was very inexperienced in civil litigation at the time, ought to have paid more attention. Her failure to do so and to seek advice from more experienced counsel was ultimately very costly for her clients.
L had failed to call proper evidence in the conduct of the proceedings. She had argued that damages were available for the tort of harassment when there was no such tort recognised in New Zealand. She also raised an argument under the Fair Trading Act 1986 which had not been pleaded and which was out of time and therefore doomed to fail. Her submissions as to costs following what she clearly did not recognise as an almost total failure of her claim, were also of concern to the District Court Judge and indeed to the Disciplinary Tribunal, before which she characterised these as somewhat successful (an adjustment of $700).
The most serious level pleaded in the charges was that of misconduct (s7(1)(a)(i) LCA). The conduct did not reach this level. L was a well-motivated and diligent practitioner attempting to do the best job she could for her clients, albeit in a less than competent manner. There was no wilful or reckless abandonment of her responsibilities, rather a failure to perceive her own inadequacies and seek assistance.
The test set for assessment of the second limb of s241(c) LCA, namely the tendency to bring the profession into disrepute as a result of the practitioner's negligence, whether “… was reasonable members of the public, informed of all relevant circumstances, would view [the] conduct as tending to bring the profession into disrepute … the issue is to be approached objectively, taking into account the context of which the relevant conduct occurred …” ( ).
It would be relatively rare for the Tribunal to find that counsel involved in contested litigation had met the negligence and competence criteria in preparing and filing pleadings and appearing at a subsequent hearing. Counsel had to be given latitude arising from the possible range of views about the viability of the cause of action and the likelihood of success.
However there would be instances where the pleadings and conduct of the case were objectively so flawed and unlikely to succeed that disciplinary intervention was warranted. This was one of those cases having regard to the cumulative effect of the evidence. Although there was considerable sympathy for the difficulty of a practitioner faced with a client who was set in a particular view, r13.3 Conduct and Client Care Rules (Informed Instructions) applied. The clients in this case were not properly informed of the objective merits of their case so as to fully understand the risks of proceeding. Despite providing a lot of material to the clients, L's lack of analysis and application of research to these facts meant that the clients were failed by her.
On an objective assessment of how the public would view the practitioner's conduct of these proceedings and her significant failure to fully advise the clients in respect of the early settlement offer, the profession would be brought into disrepute. The charge was proved at the legal level of negligence pursuant to s 241(c).
If this was wrong, having regard to the latitude which needs to be granted to litigators, then L's conduct would certainly “fall short of the standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent lawyer” and there would be a finding of “unsatisfactory conduct”.
Ms Lagolago faces disciplinary charges brought by the Standards Committee arising from her representation of Mr and Mrs F in relation to a debt to a finance company.
The charges relate, inter alia, to the standard of her advice to the client on settlement proposals offered, the likelihood of success and risks in litigation with the finance company and her conduct of the resulting case in the District Court before Judge Tuohy, who was strongly critical of Ms Lagolago's representation and conduct in both his decisions on the merits and a later costs application.
The outcome for Mr and Mrs F was that a debt not exceeding $12,000, capable of being resolved in the Disputes Tribunal without legal fees was escalated into a two-day hearing in the District Court where the outcome was judgment for the balance of the loan contract and interest and where costs were awarded against them...
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