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Interviewing potential defendants

Feature Articles

Cite as: Jan/Feb 2015 89 (1/2) LIJ, p.50

Until recently it had been accepted practice that plaintiff lawyers involved in transport accident claims should not communicate with a witness who is a potential defendant to a transport accident. The LIV Ethics Committee found that this view was incorrectly based.

By Jonathan King

Ethics special issue

In late 2013 the question arose as to the appropriateness of plaintiff practitioners contacting parties who may be potential defendants in common law proceedings. Plaintiff lawyers regularly seek to ascertain accident circumstances in order to advise clients on the merits of proceeding with a potential claim. The question as to the appropriateness of such contact arose in the context of whether this type of contact infringed the Professional Conduct and Practice Rules 2005 which prohibit practitioners holding discussions with another practitioner’s client.

After an ongoing dialogue between the TAC and Maurice Blackburn as to the appropriateness of plaintiff lawyers speaking with witnesses to transport accidents, the law firm asked the LIV Ethics Committee (EC) to provide clarification on whether it is appropriate for plaintiff practitioners to hold such discussions, and if so, at what point in a claim is it appropriate for them to speak.

The situation arose on two occasions when, at informal common law settlement conferences (held before formal proceedings are lodged), the TAC indicated it had not been able to speak to the potential defendant in relation to liability, and when asked, refused to allow Maurice Blackburn to do so. On both occasions, clients were faced with making decisions as to whether to bring formal common law proceedings against the potential defendant driver, without being provided with their version of the accident circumstances and without “permission” to discuss the circumstances with the potential defendant. While also raising questions regarding whether the TAC’s conduct was that of a Model Litigant or in compliance with the Civil Procedure Act, the refusal to allow parties to examine the potential defendant’s version of the accident circumstances certainly obstructed the plaintiff’s ability to make an informed and considered decision about whether to bring proceedings, and in both instances led to the plaintiff abandoning the case due to the uncertainty and risks involved in lodging proceedings against another party without being able to ascertain their version of liability.

The TAC’s view was that it exercises a right of subrogation of the insured driver’s rights under s94 of the Transport Accident Act 1986. Therefore, in the TAC’s view, despite not entering into a direct solicitor client relationship with the insured driver in the usual sense, the TAC “acted on the insured driver’s behalf” (by way of its exercise of the powers contained in s94 to take over the claim on behalf of the driver). The Professional Conduct and Practice Rules 2005 prohibit practitioners dealing directly with an opponent’s client without notice and consent and, as such, if it was accepted that the TAC were “acting on behalf of” the potential defendant then such contact would be prohibited.

It was conceded by Maurice Blackburn that it is settled law of insurance subrogation that where an insurer seeks to defend an action on behalf of an insured, the solicitors of record act for both the insurer as well as the insured. Maurice Blackburn was of the view that prior to a writ being served and a notice of appearance being filed on behalf of the TAC, no subrogation of rights has taken place, and there is no prohibition against such discussions. It is recognised that there is no property in a witness, and as such, discussions between the potential defendant and plaintiff lawyers or representatives, at this point in the potential proceeding, would not infringe upon the rules of professional conduct as intimated by the TAC. Maurice Blackburn’s view was that a defendant is not legally represented by the TAC (by way of subrogation) until an appearance is filed on behalf of the defendant.

Maurice Blackburn approached the EC in February 2014 querying the appropriateness of practitioners contacting parties who may be potential defendants in common law proceedings, and sought a ruling that plaintiff practitioners be allowed to contact potential defendants to common law proceedings until a notice of appearance is filed on behalf of the defendant (and subrogation of rights occurs).

Prior to making its ruling, the EC sought clarification in relation to the parties views on the effect of the Australian Solicitors’ Conduct Rules 2011 (ASCR) which the Victorian Legal Services Board has endorsed for adoption in Victoria and which will replace the existing Professional Practice and Conduct Rules 2005.

While the ASCR contain similar provisions about not contacting another solicitor’s client, they also provide that a solicitor must not confer or deal with any party represented by, or, to the knowledge of the solicitor, indemnified by an insurer, unless the party and the insurer have agreed to contact occurring. The question for the EC was therefore at what point does such indemnity occur in a proceeding. In a TAC context, it could be interpreted as occurring as soon as a driver pays their registration on a motor vehicle. However, it may be that such indemnity does not in fact crystallise until an actual liability is established, creating an obligation on the insurer to indemnify against the liability incurred.

Maurice Blackburn submitted that the ASCR only prohibit contact with a party who is indemnified after such indemnity has been made out by the insured accessing the serious injury gateway and obligation to pay damages arises. The Supreme Court of Appeal decided in Primary Health Care Ltd v Giakalis (Giakalis) that, prior to the plaintiff establishing that they have suffered a serious injury, the plaintiff’s cause of action is “contingently extinguished” by the failure to access the serious injury gateway and no indemnity exists.1

The Court in Giakalis concluded that indemnity cannot apply “. . . unless the circumstances in which the injury occurred were such as to give rise to legal liability in the putative third party to pay damages”.2 The Court referred to the decision in Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd (Skilled)3 and concluded that indemnity only occurs where the third party has incurred an actual liability to the injured worker noting that “liability referred to is one that goes beyond a contingent remedy and refers to a true remedy to pay damages”.4

Ruling

On 21 July 2014 the EC ruled as follows:

“In the opinion of the Ethics Committee and on the information presented:

“There is nothing under the current Rule 25 of the Professional Conduct and Practice Rules 2005 to prevent a plaintiff lawyer interviewing a prospective Transport Accident Commission (TAC) defendant until such time as the defendant is represented.

“The prospective Rule 22.4 of the Australian Solicitors’ Conduct Rules 2011 does not prevent a plaintiff lawyer interviewing a prospective TAC defendant until such time as the defendant is represented or the TAC has indemnified that person. The Ethics Committee understands that there is no obligation on the part of the TAC to indemnify the driver of a motor vehicle involved in a transport accident until the relevant plaintiff has, under section 93 of the Transport Accident Act 1986 (Vic), become entitled to recover damages.

“In any event a plaintiff’s lawyer should comply with the Guidelines on Interviewing Witnesses published by the Law Institute of Victoria in October 1990.”

The ruling of the EC supported Maurice Blackburn’s position that there is nothing contained in either the Professional Practice and Conduct Rules 2005 or the ASCR that prevents contact between plaintiff lawyers, or their representatives, and potential defendants up until the point an appearance is filed on behalf of the insurer.

Interviewing witnesses

The LIV published “Guidelines on Interviewing Witnesses” in the October 1990 edition of the LIJ which were referred to in the EC ruling as a reference and needed to be complied with when such discussions occur. The guidelines make it clear that lawyers must be upfront with people they are interviewing and not mislead them about the nature of the interview and who they represent.

The Guidelines are as follows:

Interviewing witnesses: A lawyer should act fairly and honestly in interviewing witnesses and, in particular, should:

  • inform a witness on whose behalf he or she acts; and
  • ensure that there is no attempt to manipulate the witness’ evidence.

Interviewing prospective defendants: A lawyer should act fairly and honestly in interviewing persons who are prospective defendants and, in particular, should:

  • inform the person on whose behalf he or she acts;
  • inform the person about the matter in which he or she is acting;
  • ensure the person is aware that the lawyer is not acting or giving advice on the person’s behalf;
  • advise the person he or she may decline to discuss the matter if he or she chooses to do so;
  • ensure that there is no attempt to manipulate the person’ evidence.

Interviewing corporations: When a party is a corporation, the lawyer for another party is prohibited from interviewing:

  • the chief executive officer of the corporation, and
  • any other person (“authorised person”) whom the lawyer knows, or ought to know, has been given, in good faith, authority to make admissions on behalf of the corporation or to instruct the corporation’s solicitors in the conduct of the proceedings;

Before interviewing an employee of the corporation, whom a lawyer ought reasonably anticipate could be:

  • an authorised person; or
  • a person who could significantly influence decisions about the conduct of the proceedings;
  • the lawyer must observe the same constraints as apply when interviewing prospective defendants.

Interviewing third parties: A lawyer should not interview an insurer or other third party who is giving instructions to a lawyer for another party.

Conclusion

The ruling of the EC has been applauded by plaintiff practitioners who have long felt that allowing discussions to take place between the parties and potential witnesses prior to formal proceedings being instigated enables proper advice to be given to clients in relation to the likely prospects of their claim at an early stage. This in turn results in matters either capitulating where there is no likelihood of success, or proceeding in circumstances where the client is able to properly consider an informed view of the liability material. This approach is also entirely consistent with the obligations imposed by the Model Litigant Guidelines and the Civil Procedure Act by potentially preventing unnecessary litigation and only bringing claims which have a proper basis.

Plaintiff practitioners must continue to act fairly and disclose their interests when speaking to potential parties in any matter, but they can now do so in order to investigate their client’s claim prior to formal proceedings being lodged unfettered by any claim of subrogation of rights by an insurer. The ruling of the EC has provided clarity to parties in approaching these matters and has settled any ongoing misunderstandings insurers had in relation to the timing and powers attached to the subrogation of insured’s rights.


Jonathan King is a lawyer in the TAC department of Maurice Blackburn. He is an LIV accredited personal injury specialist.

  1. Primary Health Care Ltd v Giakalis (2013) VSCA 75 (12 April 2013), at [78].
  2. Note 1 above, at [55].
  3. Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd (2005) TASSC, at [86].
  4. Note 3 above, at [99]-[100].

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