ACT Civil and Administrative Tribunal|2014-05-13

The ACT Civil and Administrative Tribunal has been sitting today in matter number OR13/31, which is an application brought by the Council of the Law Society of the ACT in relation to two Legal Practitioners. Up until now, we have been sitting in a section 33 conference, which is a confidential conference, however, the matters have been resolved by agreement between the parties subject to those agreements being put to the tribunal for consideration under section 55 of the ACT Civil and Administrative Tribunal Act 2008.

I indicated to the parties that I thought it was appropriate to make some comments about this matter, particularly as part of the tribunal's role is to enable the community to be satisfied that the tribunal is through its proceedings protecting the public and enforcing appropriate professional standards. Comment should also be made for the guidance of other practitioners that they may be aware of the unfortunate circumstances that have arisen in this matter.

The issues in this case arose originally from the employment of a practitioner of longstanding and experience, on a basis that he be remunerated by payment of a fixed percentage of the costs that he brought into his employer's practice. There are dangers and difficulties in adopting this practice.

I am certainly not against remunerating employees appropriately where they work hard and develop a practice for the benefit of their employer. However, operating on the basis of a fixed percentage remuneration gives the employee an inducement to generate as much work as possible, whatever the quality and whatever prospects, when the employer is ultimately responsible for any problems that arise. To engage in such a practice requires very detailed supervision and control of work that is taken into the practice. That does not appear to have happened in this case. It may be that the employer practitioner considered that the employee didn't require much supervision unless requested, but that doesn't remove from him the responsibility to supervise all aspects of the practice.

The second issue about which I want to make comment relates to the way in which the employee was paid his agreed share of the costs by direct payment from the trust account. Notwithstanding the able submissions of counsel for Mr Giles, in my view, that is an unsatisfactory practice. It brings into play issues of mingling the practitioner's own money with that of the client's, particularly bearing in mind that the liability of the employer is a personal liability of himself to the employee. It is most unsatisfactory to attempt to discharge that liability by payment out of moneys in the trust account, even in circumstances in which the employer considers that he has an entitlement to those moneys. In my view, the proper course is to bring those moneys back into the general account and then disburse payment to the employee in the same way as to any other creditor of the practice.

The outcome of these matters, and it would appear the lack of strict supervision in the earlier days by the employer over the trust account affairs, has brought this unfortunate situation about. I note that a previous partner of the employer had the principal responsibility for administration of the trust account, but that cannot overcome the obligation of every partner to be responsible for the conduct of the trust account. If a fellow partner fails in some way that does not remove responsibility from the ongoing partner.

Having said that, I acknowledge that the agreed terms, which I have approved, impose a substantial penalty on the employer in terms of suspension from the practice. That is regrettable for a practitioner who has been of longstanding in this town.

Civil and Administrative Tribunal Act 2008

COUNCIL OF THE LAW SOCIETY OF THE ACT v TIIRIKAINEN & ANOR (Occupational Discipline) [2014] ACAT 29 (13 May 2014)

COUNCIL OF THE LAW SOCIETY OF THE ACT v TIIRIKAINEN & ANOR