Citation: Commissioner Determination (Breach of confidentiality, no costs disclosure) [2018] VLSC 21

1. Pursuant to section 299(1) of the Legal Profession Uniform Law (Victoria) ('the Uniform Law'), I have decided that the Respondent Lawyer has engaged in unsatisfactory professional conduct and I make the following order -
   • Pursuant to section 299(1)(b) of the Uniform Law, the Respondent Lawyer is reprimanded for the following:
     1. failing to provide a costs disclosure statement to the Complainant in breach of section 174(1)(a) of the Uniform Law;
     2. including a third party in confidential communications with the Complainant on three occasions in breach of rule 9.1 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 ('the Rules'); and
     3. engaging in an inappropriate communication with the Complainant in breach of rule 4.1.2 of the Rules.

1. 2. Pursuant to section 292 of the Uniform Law, I make a binding determination about the costs of the Law Practice's bills dated 11 July 2015, 14 September 2015 and 17 September 2015 ('the Bills'), which are the subject of the dispute and I make the following order -
   • Pursuant to section 290(2)(c) of the Uniform law, that the Law Practice reduces its fees from $4,306.00 to $2,064.20.

I consider the amount of legal costs that are fair and reasonable in all circumstances in relation to the Bills to be $2,064.20 (including GST and disbursements), which the Complainant must pay the Law Practice.

1. Pursuant to sections 290(2)(d)(i) and 299(1)(e) of the Uniform Law, I make the following order -
   • The Respondent Lawyer must attend four (4) continuing professional development ('CPD') courses within the current CPD cycle (in addition to the 10 units required). Such courses are to be approved by the Victorian Legal Services Commissioner ("the Commissioner's office") and, where possible, to be focused on:
     1. appropriate billing methods and compliance with costs disclosure requirements; and
     2. legal ethics in relation to professional communication and confidentiality requirements.

1. In or about early June 2015 the Complainant first met with the Respondent Lawyer in relation to her separation from her husband. At the request of the Respondent Lawyer, the Complainant paid $1,500.00 to the Law Practice on account of future services.
2. On or about 8 July 2015 the Complainant first instructed the Law Practice in relation to Federal Circuit Court proceeding [number] ('the Proceeding'), to which the Complainant was a party ('the Matter').
3. The Respondent Lawyer's file in respect of the Matter contains an unsigned disclosure statement (purportedly prepared under Part 3.4 of the Legal Profession Act 2004) dated 8 July 2015.
4. On 14 September 2015 consent orders were made in the Proceeding effectively concluding the matters in dispute.
5. During the course of the Matter the Law Practice issued the following lump sum invoices:
   1. invoice dated 11 July 2015, totalling $1,500.00 ('Bill 1'); and
   2. invoice dated 14 September 2015, totalling $1,500.00 ('Bill 2').
6. Upon receiving Bill 2, or otherwise being notified that a further payment of $1,500.00 was required, on 15 September 2015 the Complainant requested an itemised bill. On 16 September 2016 the Respondent Lawyer indicated he was "happy to prepare and provide an itemised account" but that it would "certinaly [sic] be more than the amount I requested previously."
7. On 17 September 2015 the Law Practice issued an itemised invoice dated 17 September 2015, totalling $4,306.00 ('Bill 3').
8. On 16 September, 17 September and 30 September 2015 the Respondent Lawyer sent emails to the Complainant, copied to a third party [Name] ('Ms K'), regarding the (allegedly) outstanding fees. In particular, on 30 September 2015, the Respondent Lawyer stated that "I haven't herd [sic] anything from you" and "I will have to write to your superior in the department and explain your conduct".
9. On 4 November 2015 the Commissioner's office received the Complainant's complaint about the Respondent Lawyer.
10. The Complainant and Respondent Lawyer were unsuccessful in their attempts to resolve the cost dispute informally.

1. The allegations that have been considered are whether:

1. the Law Practice's legal costs are fair and reasonable; 2. costs disclosure was provided to the Complainant in compliance with the Uniform Law;

1. the Respondent Lawyer breached lawyer-client confidentiality;

1. the Respondent Lawyer engaged in an inappropriate communication with the Complainant; and 2. an itemised bill was provided to the Complainant in compliance with the Uniform Law.

1. The Law Practice issued three bills in respect of the Matter, two of which were lump sum bills (Bill 1 and Bill 2, totalling $3,000.00) and a third, which covered the same work, which was an itemised bill (Bill 3, totalling $4,306.00).
2. Bill 3 was prepared by reference to the hourly rates and charges specified in the unsigned costs disclosure statement. The Complainant stated that she did not receive a costs disclosure statement from the Respondent Lawyer. The Respondent Lawyer stated that he provided the costs disclosure statement by hand to the Complainant and there was no requirement for it to be signed. While there was an unsigned costs disclosure statement dated 8 July 2015 on the Respondent Lawyer's file ('the File') in respect of the Matter, there was no evidence on the file that it had been provided to the Complainant.
3. Section 172(1) of the Uniform Law provides that a law practice must not charge legal costs in excess of what fair and reasonable in all the circumstances. Under section 172(4) of the Uniform Law, a costs agreement is prima facie evidence that legal costs disclosed in the agreement are fair and reasonable, but only if the provisions of Division 3 in relation to costs disclosure are complied with. Under section 178(1)(b), if costs disclosure is not provided, or not adequately provided, the client of the law practice is not required to pay the legal costs until they have been assessed or any costs dispute has been determined.
4. An independent costs review was undertaken on behalf of the Commissioner's office of the File. The File was assessed by reference to the Scale of Charges attached to the unsigned costs disclosure statement. The result of that costs review was that $1,321.70 (including GST) was assessed as the amount of fair and reasonable legal costs attributable to the Law Practice's work on the Matter.
5. After completion of the costs review, the Respondent Lawyer indicated that there were further documents forming part of the File which he had not previously provided. Following receipt of those documents, a further costs review was undertaken to determine if those documents altered the conclusion of the original costs review. The result of that second costs review was that $2,064.20 (including GST and disbursements) was assessed as the amount of fair and reasonable legal costs attributable to the Law Practice's work on the Matter.

Accordingly, I have determined that $2,064.20 (including GST and disbursements) represents the fair and reasonable legal costs, which amounts to a reduction of $935.80 from Bills 1 and 2 and $2,241.80 from Bill 3. On this point I note that the Complainant has already paid the sum of $1,500.00 to the Law Practice.

1. As noted above, while there was an unsigned costs disclosure statement dated 8 July 2015 on the File in respect of the Matter, there was no evidence on the file that it had been provided to the Complainant.
2. Section 174(1)(a) of the Uniform Law provides that a Law Practice must, when instructions are received or as soon as practicable thereafter, provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs.
3. On the material before me, I am not satisfied that the unsigned costs disclosure dated 8 July 2015 was provided to the Complainant. Further, even if it was, the unsigned costs disclosure did not comply with section 174(1)(a) in that it did not set out the basis on which legal costs would be calculated and an estimate of the total legal costs, and it referred to the repealed Legal Profession Act 2004.

1. On 16 September and 17 September 2015 the Respondent Lawyer sent three emails to the Complainant, copied to Ms K, regarding the (allegedly) outstanding fees.
2. In communications with the Commissioner's office, the Complainant stated that she did not consent to the Respondent Lawyer including Ms K as a recipient of those emails. In the Respondent Lawyer's written submissions to the Commissioner's office dated 23 March 2017, he stated that he copied Ms K into those emails because:
   1. the Complainant had said she would speak to the Ms K about how Ms K had paid legal fees in her family law matter; and
   2. Ms K introduced the Respondent Lawyer to the Complainant.

The Respondent Lawyer further stated that he only copied Ms K into emails regarding outstanding fees, and all three parties were aware of that issue and no further confidential information was discussed with Ms K.

1. Rule 9.1 of the Rules provides that a solicitor must not disclose a client's confidential information acquired by the solicitor during the client's engagement to any person who is not another solicitor of the same law practice or a barrister or other person employed or engaged by the law practice for the purpose of delivering or administering legal services in relation to the client.
2. I have determined that the Respondent Lawyer has breached rule 9.1 of the Rules by sending the following emails to the Complainant, copied to Ms K:
   1. 16 September 2015 at 9:05am;
   2. 16 September 2015 at 9:15am; and c. 17 September 2015 at 4:50pm.

1. On 30 September 2015, the Respondent Lawyer sent an email to the Complainant stating that "I haven't herd [sic] anything from you" and "I will have to write to your superior in the department and explain your conduct".
2. In the Respondent Lawyer's written submissions to the Commissioner's office dated 7 November 2016, he stated that he took responsibility for that email and expressed regret and remorse for writing it.
3. Rule 4.1.2 of the Rules provides that a solicitor must be honest and courteous in all dealings in the course of legal practice. Rule 4.1.2 may be breached where a lawyer makes untoward, inappropriate or threatening comments to a client.
4. The comment by the Respondent Lawyer, "I will have to write to your superior in the department and explain your conduct", in the context of a dispute regarding unpaid fees, appears designed to pressure the Complainant into paying those fees with the threat of professional consequences if she did not.
5. Accordingly, I have determined that the Respondent Lawyer breached rule 4.1.2 of the Rules by sending the 30 September 2015 email to the Complainant.

1. As noted above, on 15 September 2015, the Complainant requested an itemised bill and, on 17 September 2015, the Law Practice provided Bill 3, being an itemised bill for $4,306.00.
2. Section 187(3) of the Uniform Law provides that an itemised bill must be provided within 21 days of a request under sub-section (2). Given Bill 3 was provided within two days of the Complainant's request, I am satisfied that the Law Practice complied with section 187(3) of the Uniform Law.

1. the amount of $2,064.20 represents the fair and reasonable legal costs in respect of the Matter within the meaning of section 292 of the Uniform Law; 2. the Respondent Lawyer breached section 174(1)(a) of the Uniform Law by failing to provide a costs disclosure statement to the Complainant;

1. the Respondent Lawyer sent three emails on 16 and 17 September 2015 to the Complainant which were copied to a third party in breach of rule 9.1 of the Rules;

1. the statement "I will have to write to your superior in the department and explain your conduct", in the Respondent Lawyer's email to the Complainant on 30 September 2015, was in breach of rule 4.1.2 of the Rules; and 2. the Respondent Lawyer provided an itemised bill to the Complainant within two days following the Complainant's request and, accordingly, there was no breach of section 187(3) of the Uniform Law.

1. Section 172 of the Uniform Law states that legal costs must be fair and reasonable.
2. Section 174 of the Uniform Law outlines a law practice's costs disclosure obligations.
3. Rule 9.1 of the Rules provides that (except as permitted in Rule 9.2) a solicitor must not disclose any information which is confidential to a client and acquired by the solicitor during the client's engagement to any person who is not:
   • - 9.1.1 a solicitor who is a partner, principal, director, or employee of the solicitor's law practice, or
   • - 9.1.2 a barrister or an employee of, or person otherwise engaged by, the solicitor's law practice or by an associated entity for the purposes of delivering or administering legal services in relation to the client.
4. Rule 4.1.2 of the Rules provides that a solicitor must be honest and courteous in all dealings in the course of legal practice.
5. Section 292 of the Uniform Law states that the designated local regulatory authority may make a binding determination concerning legal costs where the designated local regulatory authority is unable to resolve a costs dispute (whether wholly or partly) and the total amount of legal costs still in dispute is less than $10,000.
6. Section 290(2)(d)(i) of the Uniform Law provides that, in determining a consumer matter, the designated local regulatory authority may order the respondent lawyer to undertake training, education, counselling or be supervised.
7. Section 296 of the Uniform Law states that unsatisfactory professional conduct includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer.
8. Section 299(1) of the Uniform Law provides that the designated local regulatory authority may, in relation to a disciplinary matter, find that the respondent lawyer has engaged in unsatisfactory professional conduct and may determine the disciplinary matter by making an order:
   1. reprimanding the respondent lawyer (sub-section (b)); and/or
   2. requiring the respondent lawyer to undertake training, education or counselling or be supervised (sub-section (e)).

1. Having considered all of the evidence and relevant law, and having made the above findings on the issues under investigation, I determine that it is fair and reasonable in all the circumstances to make the orders detailed above.
2. Further, in making a determination as to costs, I have determined that the amount is fair and reasonable in all the circumstances having regard to section 200 of the Uniform Law. I have also considered the principles in section 172 of the Uniform Law.

1. Pursuant to Section 314 of the Uniform Law, a respondent lawyer or a legal practitioner associate of a respondent law practice may, in accordance with the applicable legislation appeal to the Victorian Civil and Administrative Tribunal ("VCAT"), or seek a review by the VCAT, of this determination made under section 299 of the Uniform Law.

1. A failure to comply with a determination made under section 299 or section 290 of the Uniform Law is capable of constituting unsatisfactory professional conduct or professional misconduct pursuant to section 298(h) of the Uniform Law.

Delegate of the Victorian Legal Services Commissioner