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Poisonous Practices & LPT remedies

Feature Articles

Cite as: (2004) 78(9) LIJ, p. 56

Practitioners should have an understanding of the dispute jurisdiction of the Legal Profession Tribunal and the options available to them.

By Alan Hebb

Legal practitioners who are involved in a dispute at the Legal Profession Tribunal (LPT) for the first time are often uncertain about the LPT process.[1]

In addition to that uncertainty, practitioners often feel a level of discomfort in having to refute allegations made about their professional practice as a dispute is understandably seen as a slight on their professional integrity. That discomfort is given an edge by the fact that the dispute is heard at the same tribunal that hears disciplinary matters, albeit in a different jurisdiction.

The practitioner will be conscious that the dispute arises from an initial complaint in which various allegations may have been made, the determination of which may well be pending, and the practitioner may be concerned that those same allegations will be made in the dispute hearing.

Despite these concerns, practitioners are advised to approach the dispute hearing as a simple civil claim against them, unrelated to any conduct allegations that may also have been made.

How a dispute comes to the LPT

When a client complains about a practitioner the relevant recognised professional association (RPA) will first determine whether the complaint concerns the practitioner’s professional conduct. If it does, then the RPA will investigate the allegations and either dismiss the complaint or bring proceedings at the LPT in its disciplinary jurisdiction.

If the complainant raises other allegations, usually questioning the practitioner’s costs or claiming that the practitioner caused the client some loss, the RPA classifies that as a dispute between practitioner and client. The RPA will attempt to settle the dispute but if that attempt is unsuccessful the client normally has the right to refer the dispute to the LPT.

Once a matter is referred, both practitioner and client will be contacted to attend a conciliation. If the matter remains unresolved at conciliation the LPT contacts the client to draft the dispute particulars. This done by either an LPT-employed practitioner or a barrister briefed for that purpose in conjunction with the client. Once completed, the particulars are sent to the practitioner with the notice of hearing. Practitioners may respond to the particulars but are not obliged to do so.

It is important to understand that just because the LPT drafts the particulars, it does not imply that the LPT has given its imprimatur to the complaint. It is the client’s statement, as recorded by the LPT, and for that reason the client will be asked to approve the particulars as being a proper statement of their dispute before they are sent to the practitioner.

Particulars do not have the status of either pleadings or witness statements. However, they do set the parameters of the hearing so that the practitioner will know in advance the allegations being made and the losses claimed. Even though particulars often fall short of the standard of proper court pleadings they nevertheless ensure both the LPT and practitioner are not taken by surprise at the hearing and are in a position to address the issues in dispute.

Role of counsel assisting

The LPT normally appoints counsel to assist it at the hearing if the client does not have representation. The role of counsel is to assist the LPT rather than to represent the client. As a result, counsel assisting cannot give the client legal advice concerning the running of the case, what evidence to adduce or even whether the case has merit.

At the hearing, counsel’s role is limited to leading the client through their evidence, cross-examining the practitioner if needs be and generally assisting the LPT member. Counsel’s task is to ensure that whatever evidence the client brings is properly and fully presented and if the client does have a legal argument then it is for counsel to ensure it is properly put to the LPT. Counsel will attempt to facilitate the smooth running of the hearing by focusing on the relevant issues.

Counsel’s assistance to a client is limited despite appearances sometimes to the contrary. Counsel will assist the client to present the case “as it comes” rather than construct a case for them. The significance of this for a practitioner is that an unrepresented client, without the benefit of advice, is more often than not ill-prepared to prove their case. A common situation is that even if some breach by the practitioner is found, it is difficult for a client to establish a compensable loss flowing from it.

Hearings

There are two main categories of disputes set out in the Legal Practice Act 1996 (Vic) (the Act): 1. a dispute in relation to legal costs under s122(1)(a); and 2. a claim that a person has suffered a pecuniary loss under s122(1)(b).

The conduct of a pecuniary loss dispute hearing is procedurally the same as in any court hearing. No-case submissions can be, and often are, made. The rules of evidence do not apply but obviously one cannot stray too far from those rules. If the practitioner gives evidence counsel assisting will normally cross-examine but the unrepresented client has the right to cross-examine as well.

The conduct of a costs dispute hearing is basically the same as for a pecuniary loss dispute. It is rare, however, for a costs dispute to be dismissed on a no-case submission. The client and the LPT have no knowledge of the work done by the practitioner and so it is usually necessary for the practitioner to give evidence to justify the account in dispute.

Either party can lead evidence from an independent cost assessor if they so choose, although this is unusual given the cost involved. In most costs disputes, at least those involving solicitors, an assessment would have been completed at the RPA stage by the Law Institute’s costing service and sent to the parties in an attempt to settle the complaint.

The party favoured by the assessment will invariably want to tender that assessment but will be unable to because of s126(3) of the Act which says: “Evidence of anything said or done in the course of attempting to settle a dispute is not admissible in proceedings before the Tribunal or any other proceedings relating to the subject-matter of the dispute”.

Some defensive applications

There are many potential preliminary issues, some going to defences and others going to jurisdiction, which practitioners should look at.

First, the boundary between costs disputes and pecuniary loss disputes is not clear, which can lead to a situation where a dispute falls within either or both categories. For example, a client may claim a breach of duty as a result of which the LPT should order that the practitioner’s fees be waived. It is at least arguable that this claim could be either a claim for pecuniary loss or a costs dispute or both. The distinction may be important as the jurisdiction of the LPT in costs disputes is more restrictive than it is in pecuniary loss disputes. (The LPT has no jurisdiction over costs disputes where the legal costs exceed $15,000 in respect of any one matter, where the dispute is initiated more than six months after the costs were payable, and where the costs relate to a family law matter). It may therefore be in the practitioner’s interest to apply to have the dispute classified as a costs dispute only.

Second, s128 of the Act gives the client the right to refer the dispute to the LPT. The significance of this section is that the dispute referred to the LPT must be the same as the dispute which was before the RPA. In other words, the particulars cannot expand the dispute into something broader than the original complaint made to the RPA. If the particulars set out a dispute which is substantially different from the matter referred from the RPA then the LPT has no jurisdiction to hear it and parts of the particulars can be struck out as being outside the LPT’s jurisdiction.

Third, s136A of the Act, which was introduced in 1999 at a time when the LPT list was inundated with lengthy and complex matters, says:

“At any time, the LPT constituted by the registrar or a deputy registrar or the Full Tribunal may dismiss a dispute if it considers that the subject matter of the dispute would be more appropriately dealt with by a court”.

The purpose of the amendment was to safeguard the LPT effectively as a “small claims” tribunal without the resources to deal with large and complex matters. An application can be made to have the matter dismissed under s136A at the initiation of the LPT itself or the practitioner.

The Act does not set out the factors to consider in dismissing a dispute but the LPT cases have set out the main criteria as being: the size of the claim (considering the jurisdictional limit of $15,000), the complexity of the legal and factual issues to be determined, the anticipated length of the hearing, and whether the client intends to pursue the remainder of his alleged losses elsewhere after the LPT hearing. An increasing number of disputes are dismissed under this section.

Fourth, practitioners may be able to claim advocate’s immunity and/or say the client’s claim is a collateral attack on a previous decision of a court and as such an abuse of process. These matters are currently before the High Court in an appeal from the Victorian Court of Appeal in the case of Ryan D’Orta-Ekenaike v Victoria Legal Aid and Ian Denis McIvor, (No 3779 of 2002). The decision in that appeal is pending at the time of writing. It will obviously be of great significance for practitioners in defending disputes at the LPT and generally.

Costs and appeals

The practitioner can apply for costs once a determination has been made. It is important to note, however, the LPT has no jurisdiction to award costs except under s134 of the Act. Costs can be awarded if the LPT considers that a party to a dispute has behaved unreasonably in relation to a hearing: s134(2). This has been interpreted to mean disruptive behaviour in the hearing itself or behaviour which interrupts and extends the hearing. Costs are rarely awarded under this sub-section. The usual sub-section invoked in a costs application is s134(3):

“If the Tribunal considers that the dispute is frivolous, vexatious, misconceived or lacking in substance, the Tribunal may make an order that the client pay the costs of the hearing of the practitioner or firm and of the Tribunal”.

In this sub-section, the practitioner must satisfy the LPT the dispute falls into one or more of these four categories. There is ample case law on the meaning given to each of those categories.

Either party can appeal a decision to the Full Tribunal. The appeal is by way of a rehearing: s169. However, the applicant must establish that there was an error in the decision at first instance before being entitled to a rehearing of the matter. Costs on appeal, unlike costs at first instance, as a general rule follow the event.

Conclusion

I have appeared regularly as counsel assisting in many disputes at the LPT since 1999. Despite that experience, the reasons why some disputes escalate to the stage of a LPT hearing are sometimes obscure.

Having said that, practitioners should remember the practitioner-client relationship is a human relationship with a professional “gloss”. Client-practitioner relationships, like all relationships, strike problems for a multitude of reasons invariably with faults on both sides.

It appears to me that practitioners who are adept at either first avoiding complaints or else manoeuvring their way through the complaint/dispute process are those who are conscious of not just delivering a professional service but also of maintaining a professional relationship with all the obligations of respect and common courtesy which that involves. Of course even then, with the occasional client one can do nought but prepare to defend oneself.


ALAN HEBB has been a member of the Victorian Bar since 1995 and has appeared regularly as counsel assisting in the dispute jurisdiction of the Legal Profession Tribunal since 1999.


[1] The Spring session of Parliament will see the introduction of a Bill to replace the current Legal Practice Act. That Bill is expected to introduce a new regime for resolving disputes between practitioners and clients by incorporating the resolution of disputes into the VCAT framework. This article deals with the procedure currently in place.

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