NZLS AUCKLAND Branch Professional standards Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC Rules) Delay A common complaint to the NZLS Complaints Service A Lawyer must always ensure prompt and on time attendance to professional duties The causes of delay can include taking on too much work, taking on work outside your area of practice, not delegating promptly and clearly and not seeking assistance when required. The New Zealand Law Society s Annual Report published in November last year indicates that complaints concerning delay rank fourth in the specific categories of complaints Inadequate reporting/communications, and may well be included in the general categories of Breach of other Ethical Rules, Other conduct issues and Other service issues (first, third and fifth respectively overall). In the Regulatory context the Lawyers and Conveyancers Act 2006 (LCA) has a consumer focus. The purposes (s.3 (1)) of the LCA include (a) maintaining public confidence in the provision of legal services, and (b) protecting the consumers of legal services. This is to be achieved, in part, by stating the fundamental obligations of lawyers with which every lawyer must comply in the provision of legal services (s.3(2)(d)). Fundamental obligations of lawyers The fundamental obligations include the obligations to act in accordance with all fiduciary duties and duties of care owed by lawyers to their clients; and..to protect, subject to (each lawyer s) overriding duties as an officer of the High Court and duties under any enactment, the interests of (each lawyer s) clients (s.4 (c), (d)). RCCC Rules The RCCC Rules build and expand on the LCA purposes and the fundamental obligations of the Rules are mandatory for practitioners (reg. 3 RCCC Rules) and state the minimum requirements on how we, as lawyers, are required to conduct ourselves and look after our clients. The rules are also a reference point for discipline. Unsatisfactory conduct compliance threshold The definition of unsatisfactory conduct (s.12) includes (a) conduct of the lawyer when providing regulated services that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer, and (c) conduct consisting of a contravention of (the LCA), or of any regulations or practice rules relating to the provision of regulated services (not being a contravention that amounts to misconduct under section 7). 1
Concerning contraventions of the practice rules, the Notes about the (RCCC Rules) (page 3, RCCC Rules) explain that a contravention that is not wilful or reckless is unsatisfactory conduct under s.12(c). In LCRO 219 / 2010, the Legal Complaints Review Officer (LCRO) held that the conduct (complained about) does not have to be " gravely deficient" to constitute unsatisfactory conduct. The LCRO found that the lawyer concerned failed.to obtain all of the relevant searches related to the (cross lease) property in question and to advise the client on the issues raised by these. The LCRO concluded that this was unsatisfactory conduct and reversed Standards Committee s decision. The orders made included a compensation order. In this case the LCRO referred to an article by Professor Webb in LawTalk (2008) 217 (9-13), where he suggests that, [47] the choice of the only faintly damming description of unsatisfactory indicates that a finding of unsatisfactory conduct is not intended to be an indicator of any kind of egregious conduct, but is rather an indication that the practitioner in question must try harder. [48] He goes on to say that any failure by a lawyer whether of competence or professionalism is less than satisfactory. Where the failure is an isolated oversight, slip or negligence the regulatory response is likely to be similarly modest with the focus being on redress or compensation for the client in the event that loss has been caused. A disciplinary response of any magnitude is unlikely. RCCC Rules Lack of timeliness or delay Following are some of the rules which prescribe professional duties in every day practice where any delay in carrying them out could risk a contravention of the RCCC Rules. Competence and client service Chapter 3 RCCC Rule 3 requires that lawyers must always act competently and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care. The term retainer is defined in rule 1.2, and includes pro bono work. Rule 3.1: requires that lawyers must respond in a timely manner to inquiries from clients. A reported breach of both these rules, as held by a Standards Committee, concerned the client having to make his own submissions to the Supreme Court following the lawyer s failure to contact the client for more than 2 months after having been assigned a case by the Legal Services Agency. The Committee held that this was unsatisfactory conduct and made censure and costs orders against the practitioner (LawTalk /781/ 23 September 2011, page 21). Other reported examples of Standard Committees findings of unsatisfactory conduct in relation to complaints of delay, were where the lawyers concerned had failed to file court proceedings or attend to other court matters on time: LCRO 79 / 2009 A practitioner s refusal to act for a client which caused a delay of some months in relation to appellate court proceedings was held to have been a breach of rule 3. The LCRO held that it is a practitioner s duty to clarify the retainer 2
and unequivocally communicate with a client whether or not the practitioner is acting, anything less is a failure of professional duty. In a similar case where filing deadlines had been missed and other steps were not taken, a Standards Committee held such delays to be breaches of rule 3- Orders made were for compensation, practical training or education, and taking practice management advice against the practitioner [LawTalk /784/ 4 November 2011]. LCRO 100 / 2009 - The lawyer concerned had delayed advancing a matter for approximately 3 weeks out of 5 weeks between the date of the two hearings. LCRO 102 / 2010 There was a series of delays by the practitioner which included failures to note at the appropriate time the significance of the fact that a conviction had been entered, to make an application some months earlier, and to make enquiries of the Court as to whether a transcript of the hearing was available Orders made were cancellation of one invoice, reduction of another, and costs against the practitioner. Other applicable contexts for complaints of delay. Rule 3.4 requires that the prescribed information on the principal aspects of client service be provided to clients in advance (before commencing work). Rule 3.5 requires that information including the client care and service information contained in the preface to the RCCC Rules be provided to clients prior to undertaking significant work. The common practice is for the information required by both rules to be provided together (see the Law Society s website, For Lawyers, Regulatory for templates for the letter of engagement, information for clients, and standard terms of engagement). In a recently reported decision of a Standards Committee (LawTalk /783/ 21 October 2011) a delay of 3 months in providing the information had occurred during which period a range of significant work had been carried out. The Committee found that as well as being a breach of rules 3.4 and 3.5, the delay in providing the information was also a breach of rule 3. Availability of lawyers and delay Chapter 4 RCCC Rule 4.4.1. When a client changes lawyers, the client has the right either in person or through the new lawyer to uplift all documents, records, funds, or property held on the client s behalf. The former lawyer must act upon any written request to uplift documents without undue delay subject only to any lien that the former lawyer may claim. Additionally, rule 4.4.4 provides that Subject to the former lawyer s right to a lien, the interests of the client must be foremost in the transfer of the client s documents and records. A Standards Committee decision (LawTalk /782/ 7 October 2011) found that a delay of four months by a lawyer in handing over a former client s files to the new lawyers was a breach of this rule which was unsatisfactory conduct. The Committee made orders of reprimand, costs and compensation against the practitioner. Disclosure and communication of information to clients Chapter 7 RCCC Rule 7 requires that lawyers..must promptly disclose to a client all information that the lawyer has or acquires that is relevant to the matter in respect of which the client is engaged by the client. Additionally, lawyers must keep the client informed about progress on the 3
retainer (rule 7.1), and..must promptly answer requests for information or other inquiries from the client (rule 7.2). When a matter is completed, the lawyer must advise the client accordingly, provide a brief summary of the work undertaken (to the extent that this has not been previously provided) and, where appropriate, identify any necessary future action by the client or the lawyer (rule 7.6). Fees Chapter 9 RCCC Rule 9 prohibits lawyers from charging clients more than a fee that is fair and reasonable for the services provided having regard to the interests of both client and lawyer and.. to the factors set out in rule 9.1. These factors include any quote or estimate of fees given by the lawyer: para. (j). Rule 9.4 requires that lawyers..must upon request provide an estimate of fees and inform the client promptly if it becomes apparent that the fee estimate is likely to be exceeded. In LCRO 140 / 2009, it was held that even though the estimate was going to be exceeded, which the lawyer concerned ought to have known, the client was not informed at any time. In finding that the lawyer s shortcoming was in failing to inform the client of this at the outset, (para. [25]) the LCRO noted that an estimate is not a quote, and that some increase or decrease in the amount of the bill can be expected. Similarly, in LCRO 109 / 2009 there was no evidence that the lawyers had at any time informed their client that the fee would be considerably higher than the estimate. The LCRO noted that this failure alone would have been sufficient for a finding of unsatisfactory conduct on the basis of a breach of rule 9, with reference to rule 9.4. Under rule 9.6, a final account must be provided to the client or person charged within a reasonable time of concluding a matter or the retainer being otherwise terminated. Professional dealings Chapter 10 RCCC Rule 10 requires that lawyers..must promote and maintain proper standards of professionalism in (their) dealings, and under rule 10.1,..must treat other lawyers with respect and courtesy. In LCRO 56/2009, it was held that a delay of 3 months by the lawyer concerned in responding to the correspondence of another lawyer was a breach of rule 10.1. Under rule 10.7, where one lawyer, acting in a professional capacity, instructs another lawyer, the instructing lawyer must pay the other lawyer s account promptly and in full unless agreement is to the contrary is reached, or the fee is promptly disputed through proper professional channels. The rule..applies to the accounts of barristers sole and foreign lawyers. In LCRO 58 / 2009 LCRO - In confirming the Standards Committee s finding of unsatisfactory conduct, the LCRO held that any dispute about payment of a barrister by instructing solicitor should be raised within a few days of when the accounts fell due for payment in the ordinary course of business, and that the onus was on the lawyer who disputed the bill to initiate dispute resolution. The LCRO observed that barristers are unable to recover their fees by recourse to the courts. For this reason the professional rules place an obligation on 4
instructing lawyers to be professionally responsible for the payment of the fees of lawyers they instruct. The LCRO found that the near eight-week delay before indicating that a dispute existed is not sufficiently prompt. It was noted that if a bill was to be disputed (or further details sought) then the dispute should be raised within a few days of when it fell for payment in the ordinary course of business. The onus was on a lawyer who disputed the bill to initiate dispute resolution procedures. Where it is agreed that the instructing lawyer s client will be responsible for the fee of the instructed lawyer, then the instructing lawyer must use all reasonable endeavours to ensure the client pays the account, and must promptly inform the instructed lawyer if it appears that the client will be unable or unwilling to pay the account : rules 10.7, 10.7.1. Conclusion As well as ensuring compliance with professional duties and obligations, regular communication with, and prompt responses to the client and relevant third parties at all stages (including the required times) of a matter can avoid both client disappointment and possible damage to the client relationship. If for any reason you are held up on a matter, let your client know, and as necessary seek input or assistance from a partner or colleague who knows what steps must be taken to move forward. Finally, essential for daily practice is a detailed knowledge of, and an understanding how the RCCC Rules apply. Also, implement systems to ensure that all communications and responses are made when required, and promptly. [Prepared: November 2011] 5