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Ethics Committee rulings

Every Issue

Cite as: (2003) 77(3) LIJ, p.79

Ethical dilemmas are part of everyday practice for solicitors.
The Ethics Committee of Victorian Lawyers RPA Ltd is available to help.

DESTRUCTION OF DOCUMENTS – FOR DISCUSSION

Legal firm A sought guidance from the Ethics Committee regarding destruction of legal files. The firm maintained that many of the files were more than 20 years old and that many of the clients had moved location or were deceased.

Legal firm A questioned the meaning of s443(1) of the Legal Practice Act 1996 (Vic) and in particular the meaning that should be given to the words “reasonable efforts”. It sought permission to destroy old files and also sought exemption from compliance with the requirements of s443(1).

Discussion
The Ethics Committee was of the view that a letter should be written to legal firm A indicating that the Ethics Committee has no power to provide dispensation from compliance with the Legal Practice Act 1996, or to provide a legal interpretation of its provision.

As a non-binding opinion, the Ethics Committee is of the view that it would be reasonable to:

  1. Where practical, legal firm A write to each client advising that unless they hear to the contrary in 60 days, the file will be destroyed.
  2. Where not practical, an advertisement should be placed in local, statewide and national newspapers and contact made with relevant organisations for dissemination of information requesting clients to provide instructions (within a fixed time frame) regarding destruction of their files.

CONFLICT OF INTEREST (1)

Legal firm A acted for the deceased estate of client A, to which two of client A’s children, B and D, had been appointed executors. Client A transferred his interest in his company to D prior to client A’s death.

A dispute arose between D, as owner of the company, and another beneficiary of the estate. It was claimed that there was a debt owed by the company to the late client A, and hence owed to the estate.

Legal firm A sought guidance from the Ethics Committee on whether it had a conflict of interest in acting for the estate, given that over a number of years legal firm A had had an association with the company in acting for some of its clients and in tendering some advice on conveyancing transactions and related matters.

Resolution
On the facts before the Ethics Committee, legal firm A may continue to act for B and D as executors of the estate of client A, but should advise D to seek independent legal advice in relation to the alleged debt owed by her to the estate.

CLIENT INSTRUCTIONS CONTRARY TO AGREEMENT

Solicitor A acted on behalf of client A in relation to family law matters.

Client A’s property was sold and the net proceeds were put into a joint interest-bearing account on behalf of both client A and her estranged husband. This was done on the condition that the husband would provide a withdrawal of caveat to allow the settlement to proceed.

The husband did not provide the withdrawal of caveat and client A instructed solicitor A to write to the husband’s solicitors advising that unless solicitor A received an order within a set period restraining release of the funds, the funds would be released to client A.

Solicitor A sought a ruling from the Ethics Committee as to whether she could act on her client’s instructions.

Resolution
As the practitioner is holding monies on behalf of both parties pending finalisation of matrimonial proceedings, she requires written consent of both parties or an order of the court to release any of the monies.

Consequently, the practitioner should not act on her client’s instructions in sending the letter threatening a course of action which she is not entitled to take.


The Ethics Committee is drawn from experienced present and past members of the COUNCIL OF VICTORIAN LAWYERS RPA LTD. Committee members serve in an honorary capacity, meeting monthly to consider requests for rulings. Those seeking a ruling should write to the Secretary, Ethics Committee, Victorian Lawyers RPA Ltd, 470 Bourke Street, Melbourne 3000.

ethics@liv.asn.au

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