PROFESSIONAL STANDARDS 2016 ANNUAL REPORT...Introduction 2 President’s Message 3 The Professional Standards Department 4 Key Statistics 2015-2016 6 Complaints 9 Litigation and Intervention

PROFESSIONAL STANDARDS2016 ANNUAL REPORT

© 2016 The Law Society of New South Wales, ACN 000 000 699, ABN 98 696 304 966. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced without the specific written permission of The Law Society of New South Wales.

President: G. Ulman Senior Vice President: P. Wright Junior Vice President: D. Humphreys Treasurer: C. Kenny Immediate Past President: J. Eades

Councillors: C. Banks, A. Boog, D. Browne, J. Dowd, E. Espinosa, J. Glowrey, R. Harvey, Z. Kekeff, A. Lumsden, B. Moss, D. Porter, T. Stern, P. Suttor, J. Thurgood, J. Warner, M. Warton, E. Yamine

Professional Conduct Committee (at 30 June 2016): G. Ulman (President and Chairperson), J. Glowrey (Councillor and Deputy Chairperson), C. Banks, G. Bates, A. Bilias, G. Briot, J. Dobson, D. Garnsey, N. Hadad, J. Howard, A. Iuliano, J. King, C. Lioumis, J. Lowbeer, J. Mann, J.McPhie, D. Miller, K. Osborne, J. Pope, D. Porter, M. Sindler, W. Steenson, A. Storr, R. Thomson, J. Van der Plaat, P. Warn, J. Warner, M. Warton

Ethics Committee (at 30 June 2016): D. Browne (Chairperson), R. Anderson, G. Bates, S.Crellin, P.Driessen, R. Fletcher, J. Gallagher, J. Glowrey (Deputy Chairperson), A. Iuliano, H. Macken, G.Maher, A. Mcgarrigle, E. McKenzie, D. Miller, B. Moss, J. Robb, T. Spohr, M. Tiyce

Costs Committee (at 30 June 2016): T. Stern (Chairperson), S. Akerman, R. Amon, A. Ashe, G. Daley, J. Dobson, P. Ferguson, J. Hedge, V. Higinbotham, D. Nicholas, K. Rosati, P. Rosier, R. Walker, M.Whelan.

Disclosure Committee (at 30 June 2016): Z. Kekeff (Chairperson), D. Humphreys (Deputy Chairperson), M. Brogan, K. Henderson, M. Hodges, J. Mann, K. Osborne, J. Patterson, J. Sutton, R.Thomson, P. Warn, P. Wright

CEO: Michael Tidball

Professional Standards Department Director: Anne-Marie Foord Phone (02) 9926 0307 Fax (02) 9221 5804 DX 362 Sydney

Annual Report Production: PSD Administration Annual Report Design: The Law Society of NSW

Introduction 2

President’s Message 3

The Professional Standards Department 4

Key Statistics 2015-2016 6

Complaints 9

Litigation and Intervention 19

Orders of the Tribunal and Supreme Court 20

Compliance and Disclosure 26

Ethics 28

Legal Costs 30

Regulatory Compliance Support 32

2016 Appendix 35

Table 1 Complaints opened, by type of complaint 36

Table 2 Complaints opened, by type of complainant 37

Table 3 Complaints opened - by solicitor type 37

Table 4 Complaints opened - by practice region 38

Table 5 Complaints closed - by result 39

Table 6 Complaints opened and closed within the same period 40

Table 7 Detailed breakdown of closures for key complaint categories 41

Table 8 Number and type of proceedings instituted at the NSW Civil and Administrative Tribunal andTribunal orders given in disciplinary proceedings 42

Table 9 Active solicitor statistics at 30 June 2016 45

Table 10 Amounts expended by the Public Purpose Fund and Fidelity Fund on Regulation, 2015-2016 45

CONTENTS

2 | PROFESSIONAL STANDARDS | ANNUAL REPORT 2015 – 2016

INTRODUCTION

The Annual Report of the Professional Standards Department (PSD) of the Law Society of New South Wales

(the Society) summarises work of the Society in performing its statutory obligations, to maintain and improve the professional standards of solicitors of this State. Through its co-regulatory role with the Office of the Legal Services Commissioner (the OLSC), the Society not only endeavors to uphold high professional standards within the profession, but is also committed to protecting the public, thus ensuring it receives the highest possible standard of legal services.

Using its powers under the legal profession legislation, PSD investigates complaints made against solicitors and associates of law practices and investigates allegations of unqualified practice. Many of the complaints dealt with by PSD involve serious and complex conduct issues and necessitate thorough, detailed investigation and reporting to the Professional Conduct Committee (the PCC) of the Society. PSD also performs an important litigation role should a solicitor be referred to the NSW Civil and Administrative Tribunal (NCAT) or the Supreme Court of New South Wales. In undertaking these tasks, PSD adheres to the essential elements of investigation: that it is fair, open, impartial, expeditious and thorough.

The work of PSD is much wider than just investigation and litigation of complaints; it also provides guidance, assistance and education to the profession through its ethics, costs and regulatory compliance sections. It deals with show-cause events, external intervention and the recovery of regulatory costs, and has a role in monitoring compliance. Under the co-regulatory regime, PSD works closely with the OLSC on complaints, reviews, policy development and streamlining the internal administrative processes of both offices to ensure compatibility.

This Annual Report is an overview of the work undertaken by PSD from 1 July 2015 to 30 June 2016. The statistical analysis relates to data maintained by PSD and it addresses the criteria outlined in the legal profession legislation in relation to the reporting requirements of each council. The Annual Report of the Council of the Society (the Council) provides the financial information required.

The legal profession legislation in its current form was introduced and took effect from 1 July 2015. Over the 12 months prior to the introduction of the Legal Profession Uniform Law (NSW), PSD reviewed all its precedents and policies to ensure a seamless transition to the new statutory regime.

Our missionThe mission of the Professional Standards Department is to:

Promote and improve professional standards

Regulate solicitors

Implement the law relating to professional standards

Conduct timely and impartial investigations

Resolve conflict

Protect the public

Provide timely and practical guidance to the profession

Our valuesThe values embodied in the work we do are:

Integrity

Personal and professional effectiveness

Teamwork

Motivation to achieve

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PRESIDENT’S MESSAGE

Guidance in professional standardsThe Law Society continues to provide information, leadership and guidance for the legal profession with comprehensive programs in ethics education, professional development and clear leadership on the required professional standards, as well as registration and licensing of solicitors in New South Wales.

Assistance to the legal profession in key areas of costs, ethics and compliance are provided by the Professional Support Unit of the Law Society.

These activities continue to address the current and future needs of the legal profession during a period of law reform and transition to a national and international profession.

The role of the Law Society in maintaining the professional standards of the legal profession owes much to the tireless work of the Director, Professional Standards, Anne-Marie Foord and her staff, and to the members of the Professional Conduct Committee. To each of them I extend my congratulations and sincere thanks for their efforts throughout the year.

In conclusion, I submit this Annual Report and invite the reader to be reassured of the ongoing role of the Law Society in upholding the professional standards of solicitors and service to the community.

Gary Ulman President

Professional Standards for the legal professionAs President of a vibrant and progressive organization, I am pleased to present the 2016 Annual Report of the Professional Standards Department of the New South Wales Law Society. In doing so, I combine the formality of the office of President with a much larger role of supervision, education and leadership of the legal profession.

I invite the community to review the professional standards report for 2015/16, which provides information and case studies describing the role of the Law Society.

The Law Society’s role in maintaining professional standards has been preserved and enhanced with the introduction of the Legal Profession Uniform Law in 2015 and the adoption of national solicitors’ rules.

Maintaining Professional Standards Professional standards are rigorously upheld by inquiry, investigation and, when necessary, disciplinary action of the legal profession. This formal process of supervision is in response to complaints received by the Office of Legal Services Commissioner and referred to the Law Society.

The co-regulation with the Legal Service Commissioner and activities of the Law Society demonstrate our ongoing commitment to maintaining professional standards within the legal profession, now and in the future. Our continued active role to maintain public confidence will be ensured by maintaining the cornerstones expected of our profession; integrity, transparency, diligence and ethical standards.


THE PROFESSIONAL STANDARDS DEPARTMENT

Litigation• Preparation and conduct of

proceedings before NCAT and the courts including drafting, settling and filing of disciplinary applications and other originating processes

• Responding to various applications both before NCAT and the courts generally

• Provide timely and informative reports to the PCC and the Council

Costs• Provide accurate and

comprehensive information and guidance to solicitors in relation to costs issues

• Provide assistance in obtaining settlement of costs disputes

• Address policy issues associated with legislation including the effectiveness of the Costs Assessment Scheme and issues associated with legal costs

• Consult in relation to costs provisions of the legal profession legislation

• Educate the profession in relation to changes to the legal profession legislation

Ethics• Provide prompt and reasoned

information and guidance to solicitors in line with established ethical and legal principles

• Research and keep abreast of relevant ethical and legal developments including involvement in ethics policy development

• Submit timely and informative reports to the Ethics Committee

• Maintain accurate records of enquiries

• Provide ethics education including the publication of articles in the Law Society Journal and addresses to the profession and interested groups.

Regulatory Compliance Support• Assist practitioners in dealing

with issues of a regulatory nature required for compliance with the legal profession legislation

• Educate the profession with respect to changes introduced by new regulatory initiatives including preparation of online material, factsheets and toolkits

• Undertake research into appropriate compliance standards

• Review and advise on practice structures permitted under the legal profession legislation

Administration• Maintain accurate and functional

databases which enable the provision of sound information and statistics for practice review, management reporting and publication of the Annual Report.

• Regularly review and update management systems and processes to ensure efficient work flow, data management and performance management.

• Daily communication and liaison with the OLSC.

• Provide administrative management and support to ensure the efficient running of PSD including paralegal support, committee agenda preparation, high level document and file management, and financial records administration.

• Assist PSD Director in daily operations and functions of administration and support

The Society has a statutory obligation to maintain and improve the professional standards of the legal profession

in New South Wales. PSD, together with the OLSC, fulfills this obligation through a number of key activities.

The work of the department encompasses six major areas: complaints, prosecution, litigation, intervention, compliance and disclosure, education and support.

Key ActivitiesManagement• Discharge responsibilities and

accountabilities within resources and statutory requirements

• Develop and meet budget targets in a cost-effective manner

• Make submissions in relation to legal profession legislation, including changes and national uniformity

• Supervise and manage staff to ensure productive outcomes

• Identify and take action on aged files

• Regularly review the functions and operations of the department

• Meet complainant and solicitor expectations through education, effective communication and effective processes.

Investigations• Conduct timely and impartial

investigations in relation to solicitors, unqualified practitioners and associates of legal practices

• Make sound recommendations on conduct to the PCC or Council

• Be involved in alternative dispute resolution

• Disclosures

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Regulatory compliance enquiries 5,179

3,531

2,749

688

1,150

408

118

23

20

Ethics enquiries 3,117

General enquiries/e-mails 1,273

Costs enquiries 1,849

Complaints 449

Disclosure files 92

Litigation/intervention matters 63

Unqualified practitioner matters 52

Work undertaken by PSD2015–16 2014–15

1000 30002000 4000 5000 6000


449complaint files opened

17% more than last year

KEY STATISTICS 2015 – 2016

226 complaints

related to issues of conduct (50.3%)

398 complaints

were referred from the LSC (88.6%)

398 written complaints were referred to the Law Society for investigation or resolution (14.6%)

60 complaints were made by the Law Society 13.3% less than last year

2,709written complaints received by the LSC 7.5% more than last year

PCC Professional Conduct CommitteePM Professional MisconductUPC Unsatisfactory Professional ConducNCAT NSW Civil and Administrative TribunalLSC Legal Services Commissioner

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531complaints were finalised

5.2% less than last year

216 complaints closed

were dealt with by the PCC

130 complaints were dismissed

by the PCC on the basis that there was no finding of PM or UPC (24%)

33% less than last year

58 complaints

resulted in a finding of PM or UPC for which the solicitor was cautioned,

reprimanded or referred to NCAT (30%) 47% less than last year

8solicitors had their names removed from the Local Roll by order of NCAT

23solicitors were reprimanded by NCAT

14solicitors had their practising certificates suspended

5,179solicitor enquiries received by the Regulatory Compliance Unit

1,849solicitor enquiries received by the Legal Costs Unit

3,117solicitor enquiries received by the Ethics Unit


Complaints investigation process

PCC Professional Conduct CommitteePM Professional MisconductUPC Unsatisfactory Professional ConducNCAT NSW Civil and Administrative TribunalLSC Legal Services Commissioner

COMPLAINT (referred by the OLSC/made by Council of the Law Society or its delegate)

SECTION 276 PRELIMINARY ASSESSMENT

SECTION 272 OUT OF TIME Request for Submissions

SECTION 277 Department recommendation that no

further consideration of merits required

SECTION 277 CLOSURE

SECTION 276 REQUEST FOR INFORMATION

PCC

PCC OPINION: PM or UPC (Tribunal) Tribunal letter to solicitor

SECTION 300 NCAT REFERRAL SECTION 300 PM OR UPC (follow “PCC Opinion: PM or UPC

(Tribunal)” process)

NCAT PROCEEDINGS

SOLICITOR MAY APPEAL TO NCAT (SECTION 314)

SECTION 299 UPC (follow “PCC Opinion: UPC” process)

SECTION 299 DETERMINATION

NO PM OR UPC CLOSURE NO PM OR UPC CLOSURE

SECTION 277 CLOSURE

PCC OPINION: UPC Submissions letter to solicitor & complainant

PCC OPINION: No PM or UPC

SECTION 277 CLOSURE

CLOSURE

LSC MAY CONDUCT INTERNAL REVIEW (SECTION 313)

PCC

PCC

INFORMATION NOT PROVIDED

WAIVE

COMPLAINT INVESTIGATION

COMPLAINT INVESTIGATION

INFORMATION PROVIDED

REFUSE TO WAIVE

SECTION 277(1)(b) CLOSURE

SECTION 277 CLOSURE

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COMPLAINTS

for a more involved investigation. Consumer matters generally do not involve serious conduct issues and can often be resolved to the satisfaction of both parties.

The PSD balances expeditious investigation, impartiality and thoroughness in its investigation of complaints.

Referrals from the Legal Services Commissioner The LSC receives all complaints regarding the conduct of practitioners. The majority of complaints referred from the LSC to the Society are those involving the more complex conduct issues requiring investigation under Chapter 5 of LPUL.

• 398 (88.6%) of the 449 complaints opened were referred from the LSC. There were no consumer disputes.

• Between 1 July 2015 and 30 June 2016 the LSC received a total of 2,709 written complaints about solicitors, an increase of 8% on last year.

• Of the complaints referred to it by the LSC, the Law Society returned 6. These included complaints for which it had no jurisdiction or complaints deemed to be out of time.

Law Society initiated complaintsThe Society may make a complaint under s266 of LPUL when possible issues of conduct, which may not have been raised in the original complaint, appear in the course of an investigation.

When matters are referred to the PSD by the Society’s Registry, which usually involve practising certificate issues, the Society initiates its own complaint under s266 of LPUL. Issues raised by judicial officers or court registrars regarding the conduct of a practitioner are usually dealt with by the Society making a complaint.

A number of matters referred from the Society’s Trust Account Department are also investigated as Society complaints. Most commonly these arise from a failure to account or failure to comply with the accounting requirements of the LUPL.

60, or 13.3%, of total complaints opened in 2015/2016 were those made by the Society. The number of Society complaints decreased by 17% compared to 2014/2015. 8.9% were trust account complaints and 9.3% were non-compliance. The figures decreased by 2.6% and 1.72% respectively from last year’s statistics.

The complaints processThe investigation and resolution of complaints is a major activity of PSD. The department investigates and attempts to resolve those complaints referred to it by the Legal Services Commissioner (LSC). The Society can also make its own complaint under s266 of the Legal Profession Uniform Law (NSW) (LPUL).

The PSD continued to investigate matters under the Legal Profession Act 2004 and received new complaints under the LPUL.

The LUPL provides the mechanism for making and determining complaints. Complaints involving more serious issues of conduct are subject to a thorough investigation, meeting the department’s objectives of timeliness and impartiality. Recommendations on the conduct are made to the Professional Conduct Committee (PCC) which considers and makes determinations on the reports put before it. The determination of a complaint or matter by the PCC is final. Under the LPUL the LSC may, at his absolute discretion, conduct a review of a decision of the PCC.

Active steps are taken early on to determine whether a complaint can be resolved without the need


and made up 15% (68) of total complaints. Matters of non-compliance (including not complying with an undertaking, and failing to comply with legal profession provisions) accounted for 9% (42) of complaints opened, a slight decrease from the 45 complaints the previous year.

• Trust account matters (breach of provisions in relation to trust money, failure to account and misappropriation) accounted for 8% (40) of complaints, the second least common complaints. The number of complaints investigated by the Society that involve trust matters has decreased, from 47 complaints in 2015. There were 13 misappropriation matters in 2015 and 13 misappropriation matters in 2016.

• The areas that showed the greatest increase within non-compliance

were complaints arising out of not complying with the legal profession legislation, up from 15 complaints to 20 complaints in 2016. Complaints arising out of discourtesy decreased from 13 in 2015 to 6 in 2016.

• Costs and payment issues, which include failing to pay a third party and overcharging clients, made up 13% (59) of total complaints. Such complaints increased from last year’s 48 complaints.

• The number of files opened relating to consumer disputes significantly decreased from 30 to 1 matter, accounting for 6.6% of the total complaints and contributing to the overall drop in complaints for the year.

Types of complaints• Complaints categorised as

“personal conduct”, such as unethical conduct, negligence and misleading behaviour, continue to be the most common grounds for complaint, making up 226 of the complaints opened in the 2015/2016. Complaints of unethical conduct increased substantially from 77 in 2015 to 113 complaints in 2015/2016. There was a slight increase in complaints regarding communicating with a client of another solicitor. Overall, personal conduct complaints have increased by 36 complaints.

• Communication and service issues, for example acting contrary to instructions, failing to carry out instructions and no communication were the second most common complaints

COMPLAINTS

Major complaints categories2015–16 2014–15

Personal Conduct 226

165

Non-Compliance 42

45

Cost/Payment Issues 59

Communication/Services 68

67

48

Other 13

6

Trust Account Matters 40

47

50 150100 200 250

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Areas of law with the most complaintsFrom the identification of conduct issues, several areas of practice emerge as the key areas which give rise to the most complaints. Purchase of Real Estate, Property Law/Conveyance and Commercial Law show a significant drop in complaints. Estate/Wills, Criminal Law and Workers Comp have stayed relatively stable. Family Law and Purchase of Business have shown a noticeable increase in the number of complaints received.

COMPLAINTS

Complaints by subject matter

Family Law 26

15

Estate/Wills 13

Commercial Law 7

Property Law/Conveyancing 30

Criminal Law 4

Employment Law 2

Workers Compensation 51

Purchase Real Estate Property 1

14

1

21

5

6

54

26

2015–16 2014–15

10 30 5020 40 60


40-65. This group accounted for 81% of complaints. Correspondingly, most of the complaints received were against solicitors who had been practising for at least 30 years.

• Male solicitors generated 71.3% of complaints, and female solicitors attracted 28.7% of the complaints. 9% of complaints were made against law practices generally. The profession’s overall make-up is 50.1% male and 49.9% female. The number of female solicitors as a proportion of the profession slightly increased.

• A total of 398 individual solicitors were the subject of a complaint, which represents one in every 72 solicitors or 1.3% of the profession (at 30 June 2016 there were 30,631 practising solicitors in NSW). This is the same as last year’s figure of 1 complaint for every 72 solicitors.

Note: Percentages quoted are based on all complaints received but one solicitor may generate several complaints, either separately or in the same matter.

Solicitors the subject of complaint • 66.1% of complaints received in

the period 2015/2016 were against principals of a law practice, who constitute 28.1% of the practising profession.19.8% of complaints were against employees of a law practice, who account for 36.9% of the practising profession.

• 27.6% of complaints were about solicitors practising in suburban Sydney. These solicitors constitute 34.2% of the profession. Sydney CBD solicitors attracted 34% of the complaints despite making up 47.6% of the practising profession. Rural and regional solicitors, while making up only 12.4% of the profession, generated 11% of the complaints.

• Most of the solicitors complained about were within the age group

COMPLAINTS

Employee of a law practice 89

Principal of a law practice 297

Complaints against firms 42

Corporate legal practitioner 4

Government legal practitioner 8

55

255

8

5

2

Complaints by solicitors type

1. For 2016 Sole principal and principal have been amalgamated2. This is a new reporting field for 2016

2015–16 2014–15

30025020015010050

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for 36.5% of the complaints investigated. More than a quarter of these complaints were about unethical conduct.

• Under the legal profession legislation, the Society can make its own complaint if information is referred from other areas within the Society (particularly in relation to non-compliance) or if new issues of conduct arise in the course of an investigation. Such complaints accounted for 13.3% of the total complaints opened this year, a slight decrease from last financial year.

• 15.5% of the complaints investigated came from other solicitors, while 1.5 % of complaints were made by a solicitor on behalf of a client.

• 4.4% of all complaints received were those made by barristers. The majority of these related to non-payment of fees.

Type of Complainant• Clients or former clients of a

solicitor are the most highly represented group of complainants and this year they accounted for 25.6% of total complaints, decreasing from last year’s figure of 28.4%. Approximately ¼ of complaints made are from solicitors and third parties, such as barristers, doctors or other experts involved in a legal case.

• Third parties and third parties (other side) collectively account

COMPLAINTS

Type of Complainant

Client/former client 115

116

Third party (other side) 94

35

The Law Society 60

73

Solicitor for client 7

11

Solicitor 70

73

Barrister 20

22

Other 6

5

Third party 70

69

Legal Services Commissioner 7

4

2015–16 2014–15

20 60 10040 80 120


COMPLAINTS

Number of complaints closed, part 1

REPRIMAND (TRIBUNAL) 5COMPLAINT WITHDRAWN 21MANAGER APPOINTED 2APPLICATION APPROVED 2SOL REF TO ADT 35APPEAL DISMISSED 1REF BACK TO LSC 6DISMISSED 155A 1UNDERTAKING GIVEN 6INVEST COMPLETED 2CAUTION 7S.511 SUMM DISMISS 43CD NFA s515(3)(b) 7APPLIC DISMISSED 1STRUCK OFF 8COMPLAINT WITHDRAWN - s273(1) 29MISCONCEIVED/LACKING IN SUBSTANCE - s277(1)(a) 30TIME LIMIT NOT WAIVED UNDER s272(1) - s277(1)(b) 5FAILURE/INADEQUATE RESPONSE TO REQUEST FOR INFO - s277(1)(c) 5COMPLAINT BETTER DEALT WITH BY LAW ENFORCEMENT/INVESTIGATORY BODY - s277(1)(e) 3COMPLAINT SUBJECT TO CIVIL PROCEEDINGS - s277(1)(g) 1

20 6040 80 100

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COMPLAINTS

Resolution and Investigation of ComplaintsThe Department finalised 531 complaints over the 2015/2016 period, 20.9% less than the previous year. Though closures were down, the Department opened 41 more complaints then it opened last year, resulting in an increase in currently opened complaints.

At 30 June 2016 there were 449 open complaint files, an increase of 41 matters on the same time last year (9.1%).

• There are three main determinators which decide complaint outcome:

• PSD – determined 2% of complaints, predominantly being those capable of resolution

• PCC – determined the bulk of the complaints 56%

• The Council – Does not make any major determinations that contribute to the closure of any complaints or major closure categories and matters.

• Complaints closed as “resolved” or “withdrawn” generally indicate that some form of resolution of the complaint, to the satisfaction of

both parties, has occurred. These do not always have to be confined to a consumer dispute. This year 71 complaints 15% were dealt with by way of dispute resolution resulting in the complaint being resolved or withdrawn. Over recent years there have been less complaints finalised in this manner as a greater proportion of complaints have involved more multi-faceted conduct issues that have been investigated and determined by PCC.

• There was 1 consumer dispute closed over the year which was later withdrawn. No matters were referred back to the OLSC.

Number of complaints closed, part 2

RESOLVED FOLLOWING INFORMAL RESOLUTION - s287 3D REPRIMAND - s299(1)(b) 5D INITIATE TRIBUNAL PROCEEDINGS - s300(1) 5REFERRED BACK TO LSC 2CLOSED AWAITING ADVICE 9CLOSED ENQUIRY 44CLOSURE - NO UPC/PM 20NO FURTHER ACTION 23s139 NO FURTHER PART 2REPRIMAND 13DISS/NO P.MC./U.P.C. 87SUSPENDED 1RESOLVED 14WITHDRAW [R] 1APPLICATION REF. [R] 1PC REFUSED 3NO ACTION [R] 1APPEAL WITHDRAWN 1CLOSED SUBPOENA 2APPEAL ALLOWED 1CLOSED AWAIT ADVICE 40CLOSED ENQUIRY 32FINALISED 1

20 6040 80 100


Decisions of the Professional Conduct CommitteeThe Council of the Society, in accordance with its powers under the LUPL, delegates certain of its functions under Chapter 5 (Dispute resolution and professional discipline) to the Professional Conduct Committee (PCC). The PCC is one of the Society’s larger committees and plays an integral role in relation to the regulatory functions of the Society. Members of the PCC contribute many hours on a voluntary basis and are chosen to represent a broad range of legal expertise, while lay members bring to the PCC insights and experience from the public’s point of view. The PCC usually meets fortnightly to consider the reports relating to the

complaints investigated by the PSD. This year there were 28 members of the Committee, comprising six Councillors of the Law Society, sixteen solicitors and six lay members.

The PCC’s role is to form a view as to whether there is a “reasonable likelihood” that the practitioner will be found by NCAT to have engaged in unsatisfactory professional conduct or professional misconduct. The Committee must dismiss an allegation of professional misconduct if it is not so satisfied or it must refer the solicitor to the NCAT if it is. Where the alleged conduct is considered to be unsatisfactory professional conduct, PCC has the additional powers of giving a reprimand, a caution and/or an order for the payment of compensation.

COMPLAINTS

Decisions of the Professional Conduct Committee

Dismissed - No PM/UPC 107

193

Dismissed - s.511 43

66

Dismissed 155A 43

74

Reprimand 27

13

Caution 7

23

1

Closed on the basis of solicitor 35 referred to NCAT

2015–16 2014–15

TOTAL 216 20 10060 140 18040 12080 160 200

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COMPLAINTS

• Of the 531 complaints closed, 40.6% had been referred to PCC for determination. Of these, 107 (20.1%) were dismissed on the basis that there was no finding of professional misconduct or unsatisfactory professional conduct, a decrease from last year where 49.6% were dismissed by PCC.

• 43 (8.1%) of the complaints reported to PCC were dismissed summarily. These are complaints that are deemed vexatious or frivolous, those that are considered not in the public interest to pursue (for example, the solicitor may already have been struck off) or where further particulars of the complaint are not forthcoming from the complainant.

• 107 (49.54%) of the matters reported to PCC had a finding of professional misconduct or unsatisfactory professional conduct compared to 28.2% last year. Of these, 35 were finalised on the basis that the solicitor had been referred to the Tribunal, 23 were closed as reprimands, and 7 cautions were recorded.

Complaints ManagementThere has been continued effort by PSD to expedite the investigation of the complaints it receives. Conducting investigations expeditiously is one of the key objectives of the Department. Staff practices are regularly monitored and the LSC also monitors the investigations undertaken by the Society.

Current Tribunal proceedings against the solicitor complained of can necessarily defer an investigation as can waiting for the results of court proceedings that the complainant and the solicitor are involved in. Also, a costs assessment will adjourn investigation.

A total of 338 complaints remain open at 30 June 2016, 17% less than the same time last year. Complaints remaining open which are between one and two years old increased by 16 to 112. Complaints greater than two years old increased by 5, to a total of 101 matters.

The Society’s performance criteria for complaint handling (as set out below) assesses both the turn-around time for complaints and the decisions given after investigation (via the review system).

Turn-around time

Indicator: 30% of complaints closed within six months of opening

2016 assessment: 37% closed within six months

Indicator: 70% of complaints closed within 12 months of opening

2016 assessment: 58% closed within 12 months

Indicator: 95% of complaints closed within two years of opening

2016 assessment: 81% closed within two years

Reviews check

Indicator: 90% of reviewed decisions upheld

2016 assessment: 71% of those completed were upheld


COMPLAINTS

Reviews by the Legal Services CommissionerUnder the Legal Profession Act 2004 the decisions of PCC were subject to an independent review process. The LPUL provides for a review of a decision of the PCC at the Legal Services Commissioner’s discretion. Complainants have the option to request the OLSC review the Committee’s decision to dismiss a complaint, caution or reprimand a practitioner. The review process takes into account both the investigation and the outcome. Very few of the decisions made by the PCC are overturned. Reviews undertaken by the Commissioner are one of the criteria used by the Department to measure its key complaint handling objectives.

The small number of reviews requested and the results of those reviews provide verification that the

Department and PCC are properly performing their statutory role and that the complainants are generally satisfied with the outcome of the investigations.

• This year 32 reviews were requested, three less than last year. As a proportion, this constitutes 13% of matters closed with a reviewable decision made by PCC (i.e. matters finalised as dismissed, cautions and reprimands).

• Over the 12 months, the LSC completed 32 reviews (including reviews requested before the reporting period). 32 completed reviews resulted in the Society’s original decision of dismissal of the complaint being upheld. One review was re-investigated by the LSC.

• At 30 June 2016, there were 32 current reviews.

Reviews by the Legal Services Commissioner

2011/12 36

2012/13 34

2013/14 29

2014/15 35

2015/16 32

35

33

27

35

32

No. of reviews completed No. of reviews confirmed as at 30 June 2016

10 20 30 40 50

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Typical allegations heard vary from matters of misappropriation and trust account breaches, misleading and gross delay through to forgery, fraud and false witnessing.

• Over the 2015/2016 period, 28 solicitors were referred to NCAT. At 30 June 2016, 33 disciplinary applications relating to 31 solicitors had been filed.

• In total there were 33 separate proceedings instituted in NCAT over the reporting year. See Table 8 in the Appendix for details of these matters.

• In the reporting period, NCAT handed down 28 determinations relating to matters referred by the

Council. A summary of the orders can be found at Table 9 in the Appendix.

NSW Civil and Administrative TribunalIf PCC is of the opinion that it is reasonably likely that a solicitor will be found guilty of professional misconduct, it must refer that solicitor to NCAT. After the decision to refer a solicitor to the Tribunal, proceedings are instituted via the filing of a disciplinary application which outlines the allegations made against the solicitor, with supporting evidence and affidavits.

Many of the matters referred to the Tribunal are quite complex and often involve multiple issues of conduct and even activities of a criminal nature.

LITIGATION AND INTERVENTION

NCAT Orders for Reprimands, Fines or Strike-off 2011-2016Reprimand Fined Struck Off

2011-12 9

2012-13 15

2013-14 8

2014-15 4

2015-16 15

10

9

4

3

3

7

12

4

6

9

5 10 15 20


ORDERS OF THE TRIBUNAL AND SUPREME COURTCurrent as at 01/07/2016

Solicitor Conduct Orders Date of OrdersGINGES, Hal Jon

• Breach of Legal Profession Act, 2004 Regulation

• Breach Professional Conduct and Practice Rules

• Transfer costs without authority

• Professional Misconduct

• Reprimand

• Costs

19 January 2016

GREENSTEIN, David

• Misappropriation

• Contravened condition on Practising Certificate

• Failure to respond to Law Society correspondence

• Breach Legal Profession Act, 2004


• Removed from Roll

• Costs

29 October 2015

SELIM, Sahar

• False Statutory Declaration

• Propounding false Statutory Declaration

• Submitting documents for the purposes of obtaining a loan which Solicitor signed but which falsely purported to have been witnessed by a person that she knew had not witnessed them

• Attempting to mislead the Law Society



• Costs

16 March 2016

COOMBES, Gregory Hunter

• Breaches Legal Profession Act, 2004 • Professional Misconduct

• Reprimand

• Costs

8 October 2015

GRIFFIN, Michael Anthony

• The solicitor engaged in grossly discourteous behaviour to a judicial officer by letter


• Reprimand

• Course

• Costs

8 April 2016 Currently on appeal by solicitor

LIEPINS, Juris

Numerous, including:

• Delay in administering Estates


• Practising without Practising Certificate

• Failure to comply with Notice

• Breaches Legal Profession Act, 2004



• Costs

3 May 2016

CUMMINS, Paul Bernard

• Acting contrary to the conditions of his practising certificate


• Reprimand

• Course

• Fine

• Costs

21 September 2015

ETHERINGTON, Paul Martin

• Failure to pay superannuation entitlements • Professional Misconduct

• Reprimand

• Costs

30 May 2016

DENNIS, Bruce Vernon



• Transferring costs prior to issuing any account.

• Delay in preparing final bill

• Failure to account




• Costs

21 September 2015 and 6 May 2016

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Solicitor Conduct Orders Date of OrdersTRUONG, Albert Edris

• Failure to comply with Notice pursuant to Section 660, Legal Profession Act 2004


• Reprimand

• Costs

3 August 2015

FULHAM, Matthew John

• Misappropriation • Professional Misconduct


• Costs

25 September 2015

BYRNES, Kevin Patrick

• Communicating with client of another Solicitor • Unsatisfactory Professional Conduct

• Costs

23 May 2016

BOLSTER, Mark Desmond

Instrument of Consent

• Delay in providing an itemised account to the complainant

• Failure to provide updated estimate of costs

• Unsatisfactory Professional Conduct

• Caution

• Costs

20 March 2016

VAUGHAN, Michael John

• Borrowing from client

• Attempting to mislead Law Society

• Breach of Legal Profession Act 2004


• Reprimand

• Fine

• Courses

• Costs

23 December 2015

SAMAAN, Rabie





• Costs

20 July 2015

WILSON, Sonny



• False certifications in claims to Legal Aid Commission



• Costs

7 September 2015

NASR, Joe

• Various • Professional misconduct

• Unsatisfactory professional conduct

• Reprimand

• Restrictions on right to practice

10 July 2015

BRAHAM, Roger Hardinge

• Instrument of Consent

• Failure to supervise


• Professional misconduct

• Reprimand

21 September 2015

BRAHAM, Berkeley (clerk)

• Misappropriation of trust funds • Lay Associate – conduct warranting an order under s 119 of the Legal Profession Uniform Law (NSW)

21 September 2015


Solicitor Conduct Orders Date of OrdersGATES, Rebekah Joan

• Misleading employer as to destination of superannuation funds for the Solicitor’s benefit


• Reprimand

• Course

• Costs

30 March 2016

SHEHADIE, Michael John

• Misappropriation • Professional misconduct

• Further orders to be made

20 April 2016

HENDY, Loris

• Substantial debt incurred by incorporated practice

• Inadequate supervision of an employee


• Reprimand

• Costs

23 February 2016

NARAYANASAMY, Jayram

• Solicitor attempted to mislead the Administrative Decisions Tribunal

• Solicitor attempted to mislead the Law Society of New South Wales

• Solicitor swore two affidavits knowing the contents of those affidavits to be false



• Costs

17 August 2015

MORGAN, Catherine Jane

• Failure to comply with undertaking • Professional Misconduct

• Reprimand

• Costs

13 July 2015

McENCROE, John Reginald

• Borrowing funds from client - Rule 12 Professional Conduct and Practice Rules 1995


• Reprimand

• Costs

9 October 2015

METLEG, Amina Raafat





• Costs

15 December 2015

DOUGHTY, Ralph

• Failure to comply with requirement section 660 Legal Profession Act, 2004


• Reprimand

• Costs

10 May 2016

GATHERCOLE, Leslie William

• Falsely purported to witness signatures of person not met on mortgage documents, on other documents related thereto, on Statutory Declarations, on certificates of identification and on certificates that he had attended that person in conference


• Reprimand

• Fine

• Costs

9 March 2016


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InterventionReceiversThe Council of the Society may resolve to apply to the Supreme Court, by summons, for the appointment of a receiver where there are grounds such as a failure to account; where a solicitor has ceased to hold a practising certificate, is mentally or physically infirm, has abandoned his or her practice or has died; or when a client cannot obtain trust property. A receiver’s powers under the legal profession legislation are extensive and include taking possession of all trust property held by the solicitor in question.

• Four receivers were appointed between 1 July 2015 and 30 June 2016.

ManagersManagers may be appointed by the Council under the legal profession legislation in identical situations to receivers but are usually appointed to ensure the orderly conduct of clients’ and practice affairs. A manager must hold a principal’s practising certificate and will take over all of the duties and responsibilities of the solicitor’s practice and disposing of any practice property. Managers are more usually appointed upon the death or ill health of a sole practitioner or where a receiver’s powers of collecting or tracing trust property are not required.

• A total of 22 managers were appointed between 1 July 2015 and 30 June 2016, 23 less than last year

SupervisorsThe legal profession legislation provides for the appointment, by the Council, of an external intervener described as a supervisor. A supervisor of the trust money of a law practice has the powers and duties of the practice in relation to all trust money, that is to receive trust money into the practice, to open and close trust accounts and to make payments to those entitled.

• Six supervisors were appointed between 1 July 2015 and 30 June 2016, two more than last year.

InvestigatorsIf there is a suspicion of improper conduct or irregularity in relation to a solicitor’s practice or general affairs, the Council may resolve to appoint an investigator (who may be either a solicitor or accountant) to examine the affairs of the solicitor. PSD works closely with the inspectors/accountants in the Society’s Trust Account Department.

• 2 investigators were appointed between 1 July 2015 and 30 June 2016, 6 less than last year.

2015-2016 Tribunal • 28 matters (individual Solicitor)

were referred to NCAT (some persons more than once) during the period

• 33 Applications (31 Solicitors) filed

• Hammond – PC appeal

• McCafrey – application for employment

Matters finalisedHigh Court• Special leave application by

Solicitor dismissed (Donaghy)

Supreme Court:• Saunders – appeal against LPAB –

LS as contradictor

• Najjar – appeal against suspension

• Montenegro – appeal against refusal

AppealsThree appeals were heard by the Supreme Court of NSW. In one case, Montenegro the solicitor appealed the decision of the Council to refuse the issue of his practising certificates for the period 1 July 2015 to 30 June 2016. The Court allowed the appeal. In another matter, the solicitor, Nancy Therese Najjarin appealed against the suspension of her practising certificate and later withdrew the appeal. In the 3rd matter, Saunders, the Society acted as contradictor in an appeal against the decision of the Legal Profession Admission Board. The court allowed the appeal.


The number of enquiries undertaken by the Law Society has increased this year.

• 33 enquiries about unqualified practitioners were dealt with in the reporting period, 13 more enquiry files than last year.

• In only one matter was there sufficient evidence to proceed to prosecution.

• In all matters, communication was attempted or made with the relevant party. In most cases the response requested was complied with and no further action was taken.

• In the remaining cases the alleged offender could not be contacted and their whereabouts remained unknown for the purposes of proceeding further.

Cost RecoveryOver the 2015/2016 period, the Department successfully recovered

• $51,145 for the Public Purpose Fund and Fidelity Fund. Money was recovered for court costs, fines imposed, and investigator, receiver, supervisor and manager fees.

• Manager’s fees made up a substantial amount of the recovered money (approx. $31,000). Money recovered also related to court costs owed to the Society (approx. $20,000).

• No new deeds were entered into over the 2015/2016 year, with 19 deeds currently in place.

Unqualified PracticePart of the functions of the litigation section is to make enquiries into the activities of “unqualified persons”, initiating proceedings either in the Local Court or the Supreme Court if necessary. Unqualified persons are those who engage in legal practice, or hold out that they are entitled to do so, when they are not the holders of a current solicitor’s practising certificate. Not only does the Society have a role to play in protecting the public against the inappropriate conduct of solicitors, it also has an obligation to protect both the public and the profession against persons purporting to be qualified when they are not.

Part 2.1 of LPUL, in particular section 10, prohibits unqualified persons from engaging in legal practice or holding out that they are qualified to do so.

There are two remedies available for breaches of the provisions: summary proceedings before a magistrate which may be brought within 12 months after the date of the alleged offence and/or proceedings in the Supreme Court seeking an injunction restraining a person from contravening Part 2.1.


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Professional standards are rigorously upheld by inquiry, investigation and, when necessary, disciplinary action of the legal profession. This formal

process of supervision is in response to complaints received by the Office

of Legal Services Commissioner and referred to the Law Society.

– gary ulman, president


COMPLIANCE AND DISCLOSURE

Pursuant to s 47 of LPUL, as a regulator, the Council may refuse to issue, or may cancel, suspend or attach conditions

to, a practising certificate if there has been evidence of non-compliance.

Non-compliance can take the form of failing to provide a report or comply with the law relating to money received on behalf of another; contravention of a provision of the legal profession legislation; or failure to explain specified conduct which may indicate “unfitness”, including acts of bankruptcy, indictable offences or tax offences.

Practising Certificates• Fourteen solicitors had their

practising certificate suspended between 1 July 2015 and 30 June 2016.

• The suspensions arose out of breaches including misappropriation, fraud, breach of trust provisions and obstruction /misleading. Investigations continue.

• In 2 of the cases where a solicitor was suspended from practice, receivers were appointed.

UndertakingsThere were twenty three undertakings provided in this reporting year, a decrease in comparison to the last reporting year. All undertakings arose out of determinations from the Disclosure Committee, PCC, the Council, and NCAT. These undertakings included agreeing to meet ATO reporting and payment obligations, accountant supervision of financial affairs, discharging all obligations in regards to the bankruptcy, and medical and psychiatric reporting.

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members. Over the period 2015/2016 the Committee met ten times to make determinations on the reports before it.

• Between 1 July 2015 and 30 June 2016, a total of 92 disclosures were made to the Law Society. This included 29 pre-admission disclosures.

• Of the 92 disclosures received, 31 involved summary offences, predominantly driving offences such as drink-driving, negligent driving, driving whilst disqualified etc.

• 1 was a tax offence disclosure.

• 8 were notifications of bankruptcy, 12 less than the previous reporting year.

• 23 were notifications of a serious offence, an increase of 2 from the previous year. This year such offences included indecent assault, common assault, and drug possession, perverting the course of justice and dishonestly obtaining a financial advantage by deception.

• The majority of disclosures, particularly those relating to summary offences, were dealt with by way of no further action being

taken, on the basis that the offence did not impact upon the solicitor’s fitness to practice.

• 9 disclosures resulted in undertakings given by the solicitors. The majority of the undertakings resulted out of a disclosure of bankruptcy, drug charges and indecent acts. The undertakings included medical reporting as to fitness to continue to practice, the solicitor agreeing to meet medical appointments and to provide medical reports to the Society, the solicitor agreeing to meet ATO financial lodgment and reporting and payment obligations, and the solicitor undertaking to have an accountant supervise financial affairs and discharging all obligations in regards to the bankruptcy.

• 4 disclosures were referred to the PCC, 2 of which were bankruptcy disclosures and 2 were serious offences.

• 50 disclosures resulted in no further action, being 3 bankruptcy, 16 serious offence and 31 summary offence.

DisclosureUnder the legal profession legislation, solicitors must disclose to the Society “show cause events”. Show cause events include bankruptcy, serious offences (indictable offences) and tax offences.

Solicitors are also required to disclose convictions and other incidents affecting fitness that would otherwise be required to be disclosed at admission to the Legal Professional Admission Board. Full disclosure is required upon being charged with a serious offence.

The Disclosure Committee of the Society has been delegated the responsibility of making determinations under the legal profession legislation on behalf of the Council. The Committee does not have the power to make a determination adversely affecting a solicitor’s right to practice. Any such determination is reserved for the Council.

This year, the Committee comprised three Councillors of the Law Society seven solicitor members and two lay

No futher action 5

Undertaking given 3

Referred to PCC 1

19

6

2

33

1

Disclosures receivedBankruptcy Serious Offence Summary Offence Tax Offence

5 15 3010 2520 35 40


The Ethics Committee and its functions:The function of the Ethics Committee originates from the directives of the Council. The general delegation of powers, authorities and discretions to the Committee by the Council are designed to enhance and maintain the high ethical standards of the profession.

The service provided by the Ethics Committee includes:

• detailed and timely provision of information on ethical issues for the legal profession. These requests may be from solicitor enquiries, departments within the Society or any of the committees of the Society. This promotes the integrity and independence of the legal profession and the confidence that provides to the Courts, clients and the general public about the ethical reliability of the profession.

• Maintaining high ethical standards, identifying and preventing undesirable practices, and using an education program, guidance as required and the publication of materials to assist the legal profession.

• Inquiry, research and submissions on legal policy and regulation affecting the profession.

The Ethics Committee is comprised of a broad section of the legal profession, with diverse and specialist skills from a variety of practice types, law firm structure and geographic locality. The members of the Committee provide a diverse range of skills, with practitioners from government departments, private practice (large, medium and small) and in-house departments. This provides a wide and diverse base of experience, which greatly benefits the profession in providing expert guidance on ethical issues.

There are currently 18 members of the legal profession on the Committee. These include 3 Councillors of the Law Society. The Committee receives support, in the form of administrative and legal resources, from the Ethics Department of PSD.

The Committee meets monthly and also deals with matters on an ad hoc basis, reflecting the demand for services from the legal profession.

Highlights of the Year – Specific Tasks for 2015/16• Providing resources on ethical

issues for the legal profession to enhance desirable practices within the profession.

• Conducting an education program on ethics for the legal profession that fulfills the continuing professional development requirements, and promotes and maintains the high ethical standards within the legal profession. The education program uses material published in both electronic and periodic journals, seminars, workshops and conferences.

• Participating in public fora and other seminars to promote the ethical obligations of the legal profession.

• Liaison and monitoring of ethical issues that may arise from the Courts, providing an education program and information to the profession as required.

• Providing assistance to the Society, including other committees, on all ethical issues.

• Providing ethics guidance to members of the legal profession so they may comply with their ethical obligations in a timely and prudent manner.

A Statistical overview• The Ethics Department and

Committee continued to provide services on a broad range of ethical issues that concern the legal profession.

• This was achieved by providing timely and practical information and guidance to assist the legal profession. Guidance and assistance was provided by using telephone, e-mail, web site information and personal attendances for delivering these services to the legal profession.

• Requests for guidance were delivered from the Ethics Department and by regular meetings of the Ethics Committee.

• Enquiries received for the 2015/16 year totaled 3122, a 13.57% increase on the previous year, reflecting the continuing value placed by the profession on the Department’s services.

• The enquiries covered a broad range of ethical issues, including a high frequency of enquires that refer to conflicts, confidentiality issues, and duties to the Court, the client and the profession.

PROFESSIONAL SUPPORT:

ETHICS UNIT

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Ethics enquiriesPerson Telephone Written

Conflict of interest 5 712

Advertising 47

Confidentiality/privilege 2 351

Assist fraudulent activity 71

Client’s instructions 5 547

9

3

2

34

9

18

62

3

12

44

9

1

2

6Trust monies 48

Undertakings 10Unqualified 7

Miscellaneous 3 777

Misleading 2Practice-general 1 173

Sol leaving firm 8

Sol material 7Termination of retainer 78

Costs 2 77

Lien/documents 1 229

Disclosure 1 48

Letters of demand 1

Communications 1 307

Client lacking capacity 94

100 500300 700 900200 600400 800 1000


HighlightsThe year was dominated by significant interest and requests for seminar presentations on the changes in costs arising from the Uniform Law, Regulations and Rules, reviewing and promoting the Society’s amended precedent cost agreements, reviewing and advising on the “alternative costs disclosure form” produced by the Legal Services Council, drafting detailed fact sheets for the profession and providing feedback on the success of the introduction.

The most common problems faced by practitioners requiring assistance included:

• Changes to costs under the Uniform Law,

• Changes to the precedent cost agreements and notification of client’s rights to accompany bills,

• Withdrawal of costs and disbursements from money held in trust,

• Recovery of legal costs and assessment, and

• Recovery of party/party costs.

Education Once again there was an increased number of practitioners attending seminars on legal costs. Practitioners continue to express concern about the strict disclosure obligations contained in the Uniform Law. There are a number of areas where practitioners could benefit from further guidance such as scoping legal costs for the purposes of providing a single figure estimate of total legal costs. The Unit is striving to develop practically oriented “workshop” presentations addressing problem areas such as communication, file transfers, disclosure and billing which will be rolled out late 2016.

A number of mid-tier and large law practices in the Sydney CBD and Parramatta requested speakers for their in-house Continuing Professional Development (CPD) sessions during the year.

Seminars organised by the Law Society and held at its office again attracted large audiences of over one hundred practitioners. These were mainly from small to medium firms with a number of sole practitioners.

Although travelling to regional areas to provide CLE seminars is time consuming the Society is committed to providing CPD to the regions. The suburban and regional areas attended by solicitors of the Unit included;

• Maitland

• Newcastle

• Wollongong

• Coffs Harbour

• Parramatta

• Gosford

• Manly

• St. George Sutherland

• Campbelltown & Macarthur

• Nowra

• Forster

• Grafton

In addition the Unit also provided speakers for government, community and educational organisations such as the Crown Solicitors Office, the Department of Finance (NSW), Community Legal Centres and the University of NSW. Papers presented to these organisations required planning conferences to tailor the seminar to the different needs and sphere in which they operate.

The Legal Costs Unit (“the Unit”) provides specialist costs advice and education to all legal practitioners in New South

Wales, regardless of their membership status, as a means of ensuring their compliance with the legislation. It promotes this service in the Law Society Journal and the Law Society Members’ Services Guide. The Unit had a very busy and productive year dealing with the introduction of the Legal Profession Uniform Law (NSW) (“the Uniform Law”) in July 2015 and the resultant changes to costs as well as assisting members of the profession with their cost related inquiries.

PROFESSIONAL SUPPORT:

LEGAL COSTS UNIT

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The Unit continues to provide a responsible legal officer to assist the Law Society’s Costs Committee. The Costs Unit is committed to facilitating communication between the legal profession and the Costs Committee

The Unit researched and wrote articles relating to costs for the Law Society Journal with new costs issues highlighted by reference in Monday Briefs.

Costs RecoveryThe Professional Standards Department recovers the Law Society’s legal costs incurred during the course of its disciplinary or investigative functions. The Law Society attempts to recover costs pursuant to costs orders; and costs incurred by the appointment of Managers, Receivers and Investigators and recovery of fines imposed.

Fines and lump sum costs payments ordered by the NSW Civil & Administrative Tribunal (“NCAT”) are enforced by applying to the NCAT under section 78 of the Civil & Administrative Tribunal Act 2013 for a certificate which can then be registered as a judgment.

The Council of the Law Society has power under section 271 of the LPA to specify Investigators’ fees making those fees a debt payable by the law practice it has investigated.

Other WorkThe Unit researched, reported and provided seminars on;

• Costs Disclosure, Costs Agreements and Billing under the Uniform Law,

• Costs Assessments, Costs Disputes, Determinations by the Legal Services Commissioner and Compensation Orders under the Uniform Law;

• The various forms of security available to a practitioner with respect to protection of their fees including possessory liens, equitable liens, caveats and mortgages together with what constitutes reasonable prospects of success;

• Regulated costs and withdrawing money from trust to pay professional fees.

Cost enquiries

Costs Agreements 398

Costs Assessments 157

Cost Billing 371

Cost Recovery 172

Cost Trust Account 63

Disclosure 305

File Transfers 79

Liens 48

Party Party Costs 71

Regulated Costs 152

Third Party Payers 42

100 500300 700 900200 600400 800 1000


calls received. The statistics reveal a massive increase of 75% in the number of telephone calls received when compared to the previous financial year.

In terms of number of enquiries by topic, a total of 5,179 enquiries were received. Practice management, practising certificate and business development remained the 3 most popular areas.

In the current reporting period, the fourth and fifth most popular areas increased by 41.1%, 44.8% and 72.3% respectively. Common areas were employment, followed by establishment of an incorporated legal practice. Employment related queries increased by 97.3% when compared to the last reporting period. The increase in employment related queries reflects the increasingly flexible and mobile workforce within the legal services market.

Interstate and foreign legal practice questions saw an increase of almost 71.8% evidencing that lawyers work in an increasingly international and dynamic legal services

The demands associated with legal practice also saw a dramatic increase from 82 to 189, an increase of 130%. In these circumstances the RCSU often provided assistance by referring callers to Law Care, the Lawyers Assistance Program, or Lifeline for Lawyers.

EducationEducation remained one of the primary focuses of the RCSU over the financial year. The solicitors in the RCSU researched and drafted factsheets, updated existing toolkits, checklists and website materials, drafted newsletters and journal articles, and undertook a significant number of seminars.

The legal profession legislation marks significant changes for many government and corporate lawyers. The RCSU is acutely aware of the issues faced by this segment of the profession and, in anticipation of the impact these changes will have in 2017/2018, the RCSU has focused on creating awareness amongst this group. Calls relating to in-house practice totalled 177 in the reporting year, up from 29 the previous year, an increase of 510%.

A total of 57 presentations were provided to the profession by solicitors in the RCSU over the reporting period, up from 32 presentations in the previous year, an increase of 78%.

The Regulatory Compliance Support Unit (RCSU) sits within PSD. There are two full time experienced solicitors

employed within the RCSU.

Legal Profession LegislationThe commencement of the 2015/2016 financial year was a landmark day for the legal profession in New South Wales as it marked the commencement of the legal profession legislation. As foreshadowed in last year’s financial report, the commencement of this new regulatory framework resulted in a dramatic increase in the number of calls to the RCSU.

The primary focus of the RCSU in the earlier part of the financial year was to provide as much practical guidance to the profession as possible outlining the substantial changes introduced from a regulatory perspective.

Assistance to the legal professionAs part of normal business, the RCSU continued to assist members of the legal profession with their queries relating to areas such as establishment of law practices including law practice structures under the legal profession legislation, transfer of a practice to a new entity, closing or selling a practice, disclosure obligations/show cause events, practising certificates and practice management. As always, queries were received on a confidential basis over the telephone and also via email, written correspondence and face to face meetings.

General StatisticsThe statistics generated by the RCSU in the 2015/2016 financial year showed an increase in the number and breadth of telephone

REGULATORY COMPLIANCE SUPPORT UNIT

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Regulatory compliance enquiries

Business Development 685

Business Name 10

Car Review 1

Closing/Selling a practice 102

Consultants 25

Employment 441

Establishment of AN ILP 423

Establishment of an ULP 87

Establishment of Practice - Non ILP 189

In house legal services 14

In house practice 180

Interstate and foreign Legal 179

Law Practice Demands 189

Letterheads/Business Names 18

Miscellaneous 137

Multi-disciplinary partnerships 1

Practice Management 942

Practising Certificate 1,076

Referral fees 1

Show Cause Event /Disclosure 59

Transfer of a practice 60

Trust Accounts 178

Unqualified Practitioners 58

100 500300 700 900200 600400 800 1000


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2016 APPENDIX


TABLE 1Number of complaints opened, by type of complaint

Investigations 09/10 10/11 11/12 12/13 13/14 14/15 15/16Personal Conduct 195 165 226 Unethical Conduct 165 128 150 118 71 77 113 Negligence 40 40 25 48 29 24 20 Misleading 46 24 22 29 32 23 58 Conflict of Interest 25 15 17 22 16 16 12 Failure to Transfer Documents 7 10 7 4 6 3 2 Communicating with a Client of Another Solicitor 5 9 3 4 10 8 9 Breach Confidentiality 8 4 6 7 4 2 5 False Swearing of Documents 6 4 1 7 11 3 2 Undue Pressure 2 3 2 1 3 0 0 Threatening Behaviour 1 3 4 7 9 7 4 Failure to Assist Law Society 0 1 0 0 0 2 0 Borrowing from Client 2 0 5 6 4 0 1 Cost / Payment Issues 52 48 59 Failure to Pay Third Party 40 37 31 42 35 29 43 Overcharging 14 14 11 9 8 5 8 No Costs Disclosure 10 9 13 6 6 12 6 Failure to Provide a Detailed Account 12 3 0 0 2 1 0 Transfer Costs Without Authority 0 2 3 5 1 1 2Communication / Service 65 67 68 No Communication 16 17 24 8 9 10 11 Failure to Carry Out Instructions 39 12 13 10 14 18 11 No Client Advice 6 12 5 1 5 3 6 Discourtesy 4 11 7 1 10 13 6 Act Without/Contrary to Instructions 9 7 10 6 15 13 19 Delay 11 4 7 7 9 7 11 Lack of Supervision 8 4 2 7 2 3 3 No Advice on Progress 1 1 4 0 1 0 1Non-Compliance 53 45 42 Not Complying with Undertaking 20 15 11 18 13 8 8 Practising without a Practising Certificate 12 12 1 8 11 11 7 Not Complying with a s.660 Notice 16 11 1 5 2 4 3 Not Comply with Legal Profession Act/Regulations 15 9 19 19 19 15 20 Not Complying with Fiscal Obligations 1 6 8 11 14 8 7 4Trust Account matters 76 47 40 Breach of Sections of Act / Regs relating to Trust Moneys 31 22 19 41 40 23 17 Failure to Account 11 14 13 14 10 11 10 Misappropriation 17 7 8 5 26 13 13Other 0 6 13 Review Re-Investigation 3 5 27 3 0 1 2 Act on Subpoenta 1 1 Liens 3 5 237 NON COMPLY SECTION 371 NOTICE 1 241 MANAGER APPOINTED - NO CONDUCT 4 Rulings Enquiries 1 0Total number of investigations 608 477 482 482 441 378 448 Consumer disputes 72 68 68 64 39 30 1 Total number of complaints opened 2 680 545 550 546 480 408 449 Notes: 1 New category of complaint introduced in 2010 2 Includes complaints made by The Law Society

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TABLE 2Number of complaints opened - by type of complainant

TABLE 3Number of complaints opened - by solicitor type

Solicitor type Number of Complaints

Complaints as % of total active sols1,2

% of total complaints

Principal of a law practice 297 0.970% 66.15%

Employee of a law practice 89 0.291% 19.82%

Government legal practitioner 8 0.026% 1.78%

Corporate legal practitioner 4 0.013% 0.89%

Complaints against firms 42 0.137% 9.35%

Total number of complaints opened 449 Notes: 1 At 30 June 2016 total active solicitors 30,631 (Source: Law Society of NSW, Policy & Research) 2 Includes multiple complaints against individual solicitors.

Complainant type 09/10 10/11 11/12 12/13 13/14 14/15 15/16

Client/Former Client 222 159 174 124 141 116 115

Law Society 110 87 72 94 84 73 60

Solicitor 91 87 88 98 81 73 70

Third Party 82 85 78 104 84 69 70

Third Party (Other Side) 95 63 76 68 56 35 94

Barrister 43 37 40 32 11 22 20

Solicitor for Client 27 22 18 16 12 11 7

Legal Services Commissioner 4 3 2 7 5 4 7

Other1 6 2 2 3 6 2 6

Executor 2 0

Attorney General 1 0

Total number of complaints opened 680 545 550 546 480 408 449 Notes: 1 Other includes Judge, Court Registrar, Government Department and Beneficiary


TABLE 4Number of complaints opened - by practice region1

Sydney City 116 Active City Solicitors 13,902

Suburban 124 Active Suburban Solicitors 10,111

Bankstown & District 7

City of Sydney 4

Eastern Suburbs 10

Inner West 14

Liverpool & District 9

Macarthur 4

Nepean Hawkesbury 3

North Metropolitan 23

Northern Beaches 9

Parramatta District 22

St George – Sutherland 19

Regional 23

Newcastle 10

Hunter/Central Coast 6

Wollongong 7

Blue Mountains/Nepean 0

Rural 49 Active Rural Solicitors 3,639

Interstate 1 Active Interstate/Other Solicitors 1,564

Other2 24 Active Overseas Solicitors 1,415

Total complaints opened 337 Total active solicitors 30,631Notes: 1 Refers to individual solicitor complaints 2 Refers to Overseas or Unknown place of practice.Solicitor statistics: Law Society of NSW, Policy & Research

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TABLE 5Number of complaints closed - by result

Result type 09/10 10/11 11/12 12/13 13/14 14/15 15/16

Professional Conduct Committee Decisions 378 374 216

Dismissed - No PMC/UPC 271 285 249 262 200 193 107

s.511 Summary Dismissal 57 62 41 55 81 66 43

Closed on basis of Sol. Referred to the ADT 74 46 66 40 52 73 35

Caution 23 15 17 14 14 23 7

Reprimand 10 8 14 10 14 11 23

Dismissed 155A 1 0 0 0 0 1 1

Duplication 0 0 0 0 17 7 0

Council Decisions 0 0 6

Receiver Appointed (1) 3 2 0 0 0 0 0

Investigator Appointed (1) 24 1 0 0 0 0 0

Solicitor Suspended/ PC Refused 1 0 0 0 0 0 4

Supervisor Appointed (1) 0 0 0 0 0 0 0

Manager Appointed (1) 0 0 0 0 0 0 2

Department Closures 158 115 152

Complaint Resolved 86 71 56 50 46 37 20

Complaint Withdrawn 72 62 64 70 60 53 51

No Further Action 23 26 29 28 24 5 26

Closed Awaiting Advice 18 26 24 8 28 17 49

Consumer Dispute Unresolved 0 12 0 1 0 0 0

Undertaking Given 2 4 0 0 0 3 6

Other Closures 18 115 99

Complaint Finalised by LSC 48 20 25 27 17 17 8

Supreme Court Proceedings Initiated 0 0 1 1 1 0 0

Appointment Terminated 2 0

CD NFA s515(3)(b) 13 7

Closed Enquiry 73 76

DISS S.511(LSC) 5 0

P.C. Conditions 1 0

Struck Off 4 8

Total number of closures 713 640 586 566 554 473* For the purpose of consistency with the OLSC’s statistics, the items marked with an asterisk can be grouped as “suspended” file closures. These are grouped below.

Result type 09/10 10/11 11/12 12/13 13/14 14/15 15/16

Closed on basis of Sol. Referred to the ADT 74 46 66 40 52 73 35

Investigator Appointed 24 1 0 0 0 0 0

Closed Awaiting Advice 18 26 24 8 28 17 49

Receiver Appointed 3 2 0 0 0 0 0

Supervisor Appointed 0 0 0 0 0 0 0

Manager Appointed 0 0 0 0 0 0 2

Total suspended closures 119 75 90 48 80 90 86Notes: 1. These figures refer to the number of complaint files closed on the basis that an external intervener was appointed to the practice of the solicitor the subject of the complaint. All sections (s.) are references to the Legal Profession Act. PMC = Professional Misconduct. UPC = Unsatisfactory Professional Conduct


TABLE 6Number of complaints opened and closed within same period

Complaint type Number opened Number closed % of openedAct Without/Contrary to Instructions 19 5 26%Borrowing from Client 1 1 100%Breach Confidentiality 5 0 0%Communicating with a Client of Another Solicitor 9 4 44%Conflict of Interest 12 5 42%Consumer Dispute 1 1 100%Delay 11 1 9%Discourtesy 6 5 83%Failure to Carry Out Instructions 11 2 18%Failure to Pay Third Party 43 15 35%Failure to Provide a Detailed Account 0 0 0%Failure to Transfer Documents 2 2 100%Failure to Account 10 2 20%False Swearing of Documents 2 0 0%Lack of Supervision 3 1 33%Misappropriation 13 3 23%Misleading 58 9 16%Negligence 20 4 20%No Advice on Progress 1 0 0%No Client Advice 6 2 33%No Communication 11 3 27%Not Complying with Fiscal Obligations 4 2 50%Not Complying with Undertaking 8 3 38%No Costs Disclosure 6 0 0%No Statement Available 0 0 0%Not Complying with a s.660 Notice 3 2 67%Not Complying with Legal Profession Act/Regulations 20 8 40%Other Trust Breaches 9 1 11%Overcharging 8 0 0%Practising without a Practising Certificate 7 3 43%Review Re-Investigation 2 0 0%Section 255 Breach Trust Money 8 0 0%Section 264 Breach Trust Records 0 0 0%Transfer Costs Without Authority 2 1 50%Threatening Behaviour 4 1 25%Undue Pressure 0 0 0%Unethical Conduct 113 39 35%Act on Subpoena 1 1 100%Liens 5 2 40%237 NON COMPLY SECTION 371 NOTICE 1 0 0%241 MANAGER APPOINTED - NO CONDUCT 4 0 0%Rulings Enquiries 0 0 0%Failure to Assist LS 0 0 0%Total 449 128 29%

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TABLE 7Detailed breakdown of closures for key complaint categories

Complaint type No. opened No. closed - by result 2015 2016

Unethical Conduct 113 Dismissed - No PM/UPC 7 5

s.511 Summary Dismissal 8 0

Complaint Withdrawn 4 11

Complaint Finalised by LSC 3 2

Complaint Resolved 2 0

Closed Awaiting Advice 1 1

Total 25 19

Consumer Disputes 1 Complaint Resolved 8 0

No Further Action s.515 (3)(b) 6 0



Total 20 1

Negligence 20 s.511 Summary Dismissal 9 0


Dismissed - No PM/UPC 0 0

Total 15 1

Failure to Pay Third Party 43 Complaint Withdrawn 10 10

Dismissed - No PM/UPC 2 2


Complaint Resolved 6 1


Total 20 13

Misleading 58 Dismissed - No PM/UPC 2 1



Solicitor referred to the Tribunal 0 0


Duplication 1 1

Total 6 6

Breach of Sections of Act/Regs relating to trust money

17 Solicitor referred to the Tribunal 4 0

Duplication 1 0



TOTAL 6 0


TABLE 8Number and type of proceedings instituted at NCAT

Solicitor Conduct Orders Date of OrdersGINGES, Hal Jon

• Breach of Legal Profession Act, 2004 Regulation

• Breach Professional Conduct and Practice Rules

• Transfer costs without authority


• Reprimand

• Costs

19 January 2016

GREENSTEIN, David


• Contravened condition on Practising Certificate

• Failure to respond to Law Society correspondence

• Breach Legal Profession Act, 2004



• Costs

29 October 2015

SELIM, Sahar

• False Statutory Declaration

• Propounding false Statutory Declaration

• Submitting documents for the purposes of obtaining a loan which Solicitor signed but which falsely purported to have been witnessed by a person that she knew had not witnessed them

• Attempting to mislead the Law Society



• Costs

16 March 2016

COOMBES, Gregory Hunter

• Breaches Legal Profession Act, 2004 • Professional Misconduct

• Reprimand

• Costs

8 October 2015

GRIFFIN, Michael Anthony

• The solicitor engaged in grossly discourteous behaviour to a judicial officer by letter


• Reprimand

• Course

• Costs

8 April 2016 Currently on appeal by solicitor

LIEPINS, Juris


• Delay in administering Estates


• Practising without Practising Certificate

• Failure to comply with Notice




• Costs

3 May 2016

CUMMINS, Paul Bernard

• Acting contrary to the conditions of his practising certificate


• Reprimand

• Course

• Fine

• Costs

21 September 2015

ETHERINGTON, Paul Martin

• Failure to pay superannuation entitlements • Professional Misconduct

• Reprimand

• Costs

30 May 2016

DENNIS, Bruce Vernon



• Transferring costs prior to issuing any account.

• Delay in preparing final bill

• Failure to account




• Costs

21 September 2015 and 6 May 2016

TRUONG, Albert Edris

• Failure to comply with Notice pursuant to Section 660, Legal Profession Act 2004


• Reprimand

• Costs

3 August 2015

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Solicitor Conduct Orders Date of OrdersFULHAM, Matthew John

• Misappropriation • Professional Misconduct


• Costs

25 September 2015

BYRNES, Kevin Patrick

• Communicating with client of another Solicitor • Unsatisfactory Professional Conduct

• Costs

23 May 2016

BOLSTER, Mark Desmond

Instrument of Consent

• Delay in providing an itemized account to the complainant

• Failure to provide updated estimate of costs


• Caution

• Costs

20 March 2016

VAUGHAN, Michael John

• Borrowing from client

• Attempting to mislead Law Society



• Reprimand

• Fine

• Courses

• Costs

23 December 2015

SAMAAN, Rabie





• Costs

20 July 2015

WILSON, Sonny



• False certifications in claims to Legal Aid Commission



• Costs

7 September 2015

NASR, Joe

• Various • Professional misconduct

• Unsatisfactory professional conduct

• Reprimand

• Restrictions on right to practice

10 July 2015

BRAHAM, Roger Hardinge

• Instrument of Consent

• Failure to supervise


• Professional misconduct

• Reprimand

21 September 2015

BRAHAM, Berkeley (clerk)

• Misappropriation of trust funds • Lay Associate – conduct warranting an order under s 119 of the Legal Profession Uniform Law (NSW)

21 September 2015

GATES, Rebekah Joan

• Misleading employer as to destination of superannuation funds for the Solicitor’s benefit


• Reprimand

• Course

• Costs

30 March 2016

SHEHADIE, Michael John

• Misappropriation • Professional misconduct

• Further orders to be made

20 April 2016

HENDY, Loris

• Substantial debt incurred by incorporated practice

• Inadequate supervision of an employee


• Reprimand

• Costs

23 February 2016


TABLE 8 (CONTINUED)Number and type of proceedings instituted at NCAT

Solicitor Conduct Orders Date of OrdersNARAYANASAMY, Jayram

• Solicitor attempted to mislead the Administrative Decisions Tribunal

• Solicitor attempted to mislead the Law Society of New South Wales

• Solicitor swore two affidavits [knowing the contents of those Affidavits to be false



• Costs

17 August 2015

MORGAN, Catherine Jane

• Failure to comply with undertaking • Professional Misconduct

• Reprimand

• Costs

13 July 2015

McENCROE, John Reginald

• Borrowing funds from client - Rule 12 Professional Conduct and Practice Rules 1995


• Reprimand

• Costs

9 October 2015

METLEG, Amina Raafat





• Costs

15 December 2015

DOUGHTY, Ralph

• Failure to comply with requirement section 660 Legal profession act, 2004


• Reprimand

• Costs

10 May 2016

GATHERCOLE, Leslie William

• Falsely purported to witness signatures of person not met on mortgage documents, on other documents related thereto, on Statutory Declarations, on certificates of identification and on certificates that he had attended that person in conference


• Reprimand

• Fine

• Costs

9 March 2016

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TABLE 9Active solicitor statistics at 30 June 2016

Employment type City Interstate Overseas Rural Suburban Total Female Male

Corporate Legal Practitioner 2,414 47 749 169 2,239 5,618 3248 2,370

Employee of a law practice 7,026 32 520 1338 2,390 11,306 6489 4,817

Government Legal Practitioner 1,775 31 13 414 972 3,205 2068 1,137

Partner 2,832 32 50 924 1,624 5,462 1,517 3,945

Sole Principal 520 8 15 722 1,895 3,160 907 2,253

Unemployed 33 72 148 238 1,364 1,855 1,042 813

Volunteer 3 0 0 3 15 21 16 5

Total 14,603 222 1,495 3,808 10,499 30,627 15,287 15,340

TABLE 10Total amounts expended by the Public Purpose Fund and Fidelity Fund on Regulation

Expense Description Recoverable from Total

Professional Standards/General Regulatory Expenses Public Purpose Fund 3,932,833

External Interventions Public Purpose Fund 1,056,229

Trust Account Inspections/Investigations Public Purpose Fund 2,250,938

Fidelity Fund Administration Fidelity Fund 821,780

Total regulatory costs 8,061,780

Total paid from Public Purpose Fund 7,240,000

Total paid from Fidelity Fund 821,780

Total 8,061,780