EXAM FINAL NOTES Professional Responsibility Legal Ethics Summary Notes PDF

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Week The of a is the term used to describe a contract between a lawyer and a client. A exist without agreement, proof of consideration (giving up one thing in exchange and the requisite level of Lawyers may be forbidden from accepting a retainer, may be restricted from terminating it terms may be al...

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Week 4 Ch. 3- The Lawyer-Client Relationship Creation of a lawyer-client relationship 1. 'Retainer' is the term used to describe a contract between a lawyer and a client. A retainer cannot exist without agreement, proof of consideration (giving up one thing in exchange for another) and the requisite level of certainty. 2. Lawyers may be forbidden from accepting a retainer, may be restricted from terminating it and its terms may be altered, especially where there are costs involved, to adequately protect the client. 3. A lawyer is not bound in tort to advise a client on matters outside the boundaries of a retainer. 4. It also applies duties of confidentiality and without a retainer, a lawyer has no contractual claim to costs from a client. 5. Terms of the retainer may be either express or implied: a. Express: ambiguity in these terms will likely be construed against the lawyer. Because it is the lawyer that drafts the retainer, it is viewed that they should not receive the benefit of an ambiguous term (Wilmoth Field Warne). b. Implied: it is generally implied that a lawyer does whatever he can to protect the client's interest. Also implied is the duty to remain confidential and do everything stated in the retainer. 6. Where multiple parties are involved in the retainer, it is important to be clear regarding the identity of the clients, particularly where a conflict of interest may exist.

7. In the case of joint clients, a lawyer must ensure they represent the joint will of both clients. 8. The Bar dictates that counsel must be instructed by a solicitor rather than directly by a lay client in most matters. 9. According to tradition, therefore, no retainer can be created between counsel and client or counsel and the instructing solicitor. This has been challenged by statute in NSW, where a barrister is entitled to enter into a retainer with a client even after accepting a brief from a solicitor (NSW LPA s 83 (3)).

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10. A barrister who accepts instructions directly from a client must inform the client of: a. The effect of rules that dictate the scope of the barrister's work. b. The fact that circumstances may require the client to retain a solicitor at short notice. c. The relative capacity of the barrister in performing barrister's work. 11. A retainer does not have to be in writing, although the statutory requirement that costs agreements must be in writing usually inclines lawyers to put the retainer in writing too. 12. Therefore, there are 2 ways to effect a retainer: a. Oral retainers: I. As the person alleging the existence of the contract bears the onus of proof, a lawyer must present evidence in the form of words and/or conduct to prove the retainer did in fact exist (Liesfield). II. The lawyer must overcome 4 difficulties in this regard: a) Evidence of conduct is ambiguous. b) Time passed may blur the lawyer's memory. c) Proof of an agreement itself does not serve to define its exact scope. d) In cases of 'he said, she said', the court usually sides with the client (Griffiths v Evans). b. Implied retainers: I. When trying to recover fees from an alleged client, the onus of proof rests with the lawyer (Coshott). II. Proof of an implied retainer rests on proof of facts and circumstances sufficient to establish a retainer (Pegrum v Fatharly, where W was unable to repay a loan but the respondent had acted as a solicitor since he consulted with W and prepared legal documents). III. A more recent example is McGeoch v Hendriks, where a solicitor (the defendant) changed the plaintiff's mind on a course of action after D told P of the negative effect it would have on his mother's pension. IV. This does not mean that a lawyer must accept 2 parties as clients just because that is what the parties want. Lawyers can choose to act for one party only. V. The issue of implied retainers may arise in the context of prospective clients who see out the lawyer for advice. The lawyer must make it explicit to these prospective clients the duties he is assuming (Bridge products Inc.).

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Authority of lawyers under the retainer 1. There are 2 main forms of lawyer's authority: a. Actual (express or implied): the weightier the legal consequence for the client of the lawyer's action, the readier the court is to find that the lawyer acted beyond authority (Flanagan). There are 6 examples that illustrate the boundaries of implied authority: I. Implied authority to incur costs & disbursements: implied authority to incur fees (Schiliro). II. Implied authority to receive money on a client's behalf: a lawyer who acts in a transaction where a client is to receive money from a third party may have implied authority to accept money on his behalf (Williams v Gibbons). III. No general implied authority to institute proceedings: merely acting as a lawyer does not give authority to begin legal proceedings on a client's behalf (Briscoe). IV. No general implied authority to contract: a lawyer cannot make contracts on behalf of a client (Pianta). V. No general implied authority to receive notices: lawyers cannot receive notices on behalf of their clients (Singer). VI. Implied authority to compromise: while all good lawyers will seek client instructions before effecting a compromise, they have implied authority to compromise on such terms they think are best for the client unless the client says otherwise (Little v Spreadbury). b. Ostensible/ apparent: if a client who has restricted the lawyer's actual authority then places the lawyer in a position that usually carries with it a broader authority, the client is said to be 'holding out' the lawyer, which gives the lawyer ostensible authority. There are 2 examples that illustrate the boundaries of ostensible authority: I. Ostensible authority to act as 'medium of communication': a client who has previously authorised lawyers to make offers and communications on his behalf may be held to hold out the lawyer (Magripilis). II. Ostensible authority to compromise: a lawyer retained in action has ostensible authority to compromise (Kontvanis).

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Lawyers' acceptance of work 1. Lawyers who practise solely as barristers are professionally bound to accept a brief in any court in which they practise. This is known as the 'cab rank' principle (Rondel).

2. Lawyers who practise other than solely as counsel, though, are not bound to accept work. 3. There are 3 grounds upon which counsel may decline a brief: a. Interdependence and disinterestedness: barristers may refuse a brief if doing so would compromise their independence, put them in a conflict of interest or otherwise be detrimental to the administration of justice. However, simply holding strong personal views against the subject matter of a case is not grounds to decline it. b. Competence: counsel should not accept briefs outside their realm of expertise (Steindl Nominees Pty Ltd). c. Practicality: barristers may decline a brief where there is doubt that the fee will be paid according to the terms of the costs agreement, the barrister won't be able to devote enough time to the matter or where the instructing solicitor does not agree to requests by counsel regarding his attendance.

4. There are 2 grounds upon which lawyers acting as other than counsel may refuse work: a. Competence: a solicitor should not accept a retainer unless he can expect to serve the client with fairness, honesty and promptness. b. Conflicting interests: solicitors have a duty to avoid situations that give rise to a conflict of interest between parties.

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Termination of lawyer-client relationship 1. Termination of a retainer typically coincides with the lawyer completing the work for which he was retained. Generally speaking, lawyers should not terminate the retainer without first completing the work set out by it. 2. Duty of confidentiality to clients survives even after the retainer is terminated. 3. The professional rules in most jurisdictions state that a practitioner must complete the work set out by the retainer unless there is mutual agreement between lawyer and client, the practitioner is discharged from the retainer by the client or the practitioner terminates the retainer with just cause or reasonable notice to the client. 4. A lawyer's excessive workload, better paying cases, lack of interest in the case or a client's offensive behaviour are not considered just cause. 5. Just cause may include, among others, the following scenarios: a. The client commits a serious breach of a written agreement regarding fees and expenses (Warmingtons). b. The client is legally aided and the grant of legal aid is withdrawn. c. Continuing engagement in the matter is likely to harm the lawyer's health (Forney). 6. Furthermore, lawyers are professionally required to shun hopeless cases, at the risk of personal liability for costs and/or being found guilty of misconduct. 7. Lawyers who terminate a retainer before the work set out has been completed, and without just cause, forfeit a claim for costs. 8. In practice, though, most lawyers don't charge full costs in one hit, but rather give interim bills to cover parts of the service. 9. The courts have construed a retainer for work of a general nature as unlikely to be an entire contract, but as severable (Caldwell v Treloar). 10. Naturally, the most preferred course of action is for lawyers to include express terms in the retainer that deal with payment of fees. 11. Where a lawyer terminates a retainer for just cause, the prevailing ideal remains that the client not be disadvantaged by the termination.

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12. A lawyer who terminates the contract must take reasonable care to avoid foreseeable harm to the client. In the case of the client appointing a new lawyer, for example, the former lawyer must cooperate and hand over all documents of the client. 13. Barristers are entitled to return a brief, thereby terminating their retainer, in the following circumstances: a. Counsel's fees have not been paid promptly or in accordance with the costs agreement. b. A family relative of the counsel is part of the tribunal before which counsel is to appear. c. The barrister considers on reasonable grounds that the client has rejected a reasonable offer of compromise contrary to given advice. d. Where appearing for the client is a logistical impossibility (e.g. counsel holds other briefs at the same time). 14. There are 3 important observations to be made regarding the ownership of documents upon termination of the retainer: a. The client cannot call for the delivery of documents that are the lawyer's property. b. Not all documents a lawyer holds relating to the affairs of a client necessarily belong to the client (Wentworth). c. Even if a document is the property of a client, its delivery may be subject to the former solicitor's general lien where costs are owed by the client to that lawyer.

15. The professional rules state that the documents available to a client after termination include documents prepared for the client and for which the client has been, or will be, charged.

16. Basically, any documents prepared by the lawyer for the client's benefit (Wentworth) and documents prepared by a third party and sent to the lawyer other than at the lawyer's expense, are the property of the client.

17. Conversely, documents prepared by a lawyer for his own benefit and for which no charge is made (Wentworth) and documents sent by the client to the lawyer (Zeus Chemical Products Pty Ltd) are the lawyer's property.

18. Professional rules provide that a lawyer must retain documents to which a client is entitled for the duration of the retainer and at least 6 or 7 years after proceedings have ended, or until the lawyer gives them to the client or deals with them in some other way, although this can be changed by a court. 6

Ch. 4: Duties to the client and their enforcement Introduction 1. Lawyers are expected to treat their clients fairly and in good faith, and give due regard to the client's position of dependence. 2. Lawyers are required to give undivided fidelity to client's interests, unaffected by their own interests or those of anyone else. 3. Lawyers should give clients a candid opinion on any professional matter relevant to the representation, not just what the client wants to hear. 4. The lawyer's main legal duties to the client include competence, loyalty, confidentiality, promoting access to access and encouraging out-of-court settlements if possible.

Duty to be competent 1. Competence is measured by the extent to which an attorney: a. Is knowledgeable about his field of law. b. Performs the techniques of his practice with skill. c. Manages such practices efficiently. d. Identifies issues beyond his competence relevant to the matter. e. Properly prepares and carries through the matter. f. Is intellectually, emotionally and physically capable. 2. The professional rules prevent lawyers from accepting work they cannot competently perform. 3. The possibility of being liable for incompetence may motivate lawyers to maintain competence in their chosen fields, but the real motivation should be one of professional duty. 4. Continuing legal education (CLE) has been put forth as a means of ensuring a lawyer's competence is maintained. 5. However, CLE is still only optional, putting it low on the list of most lawyers' priorities. 6. Hence the push towards mandatory CLE. Its advantages include increased competency, promotion of an educational habit and improved public confidence in the profession.

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Duty of loyalty and trust 1. The central fiduciary (a relationship built on trust) duty is one of loyalty 'unequalled elsewhere in the law' (Moffat). 2. There are 2 principal fiduciary duties that exemplify this standard of loyalty (Moss v Moss [No 2]): a. A person must not, without consent, place himself in a position where there may be a conflict. b. A person cannot without consent, profit from a relationship giving rise to fiduciary duties. 3. Lawyers have such onerous duties imposed on them because they can, by way of the retainer, affect the legal status of the client given the client's utter dependence on their skill and knowledge (Hospital Products Ltd). 4. A lawyer must shun situations involving a conflict between his personal interest and professional duty to the client, and must not profit from the relationship apart from a reasonable fee. 5. Because these duties exist to protect the client, they are permitted to give consent for a lawyer's actions contrary to the duties. 6. Duties of confidentiality often outlast fiduciary duties; because the former lasts even after proceedings have concluded while the latter ceases to exist once the relationship has been terminated. Hence the action restraining lawyers from acting against former clients. 7. While it is often viewed as a fiduciary duty, a lawyer's duty to disclose and use all material information coming into his possession concerning the client's affairs is actually part of tortious duty of care (McKaskell). 8. Another fiduciary duty includes the lawyer's duty to account for money received on behalf of others, whether from clients or third parties.

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Duties of confidence 1. Confidentiality: a lawyer must maintain, at all times, a policy of confidentiality regarding the client's affairs (West-Walker). This is an implied term in the retainer. 2. Undue influence: this aims to rectify abuses of relationships involving special confidence by giving the person whose confidence has been abused the ability to rescind that transaction.

Duty to promote quality and client care 1. Quality assurance: quality assurance certification may provide a means to reduce the incidence of claims from clients against their lawyers. It also serves as a means of risk management and as a USP for some firms. 2. Client care rules- communicating with the client: a. A lack of common understanding between lawyer and client is best addressed by clear channels of communication. b. It is perhaps at the outset of the retainer that there is the greatest opportunity to reduce expectation gaps, by having lawyer and client sit down and discuss the basic expectations and responsibilities of each party.

Duty to promote access to justice 1. Duty tied closely to the quantum of legal costs: a. A lawyer must not inhibit his client's access to justice. E.g. restrictions on unreasonable costs agreements and the client's rights to have their costs assessed by an independent body. b. Promoting access to justice is the reason for courts and legislature recognising the appropriateness of lawyers taking on cases on a 'no win-no fee' basis. 2. Performance of cut-price legal work: a. Concerns with cut-price legal work include the link between time devoted to work and its quality, as this sub-duty implies lawyers must allocate their resources and time amongst different jobs for different reasons. b. Undue pressure on prices of legal services, and continual price undercutting, could in turn motivate poor attitudes to professionalism.

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3. Performance of pro bono publico ('for the public good') work: a. The term 'pro bono' covers instances where a lawyer: I. Without fee or with a reduced fee, advises or represents a client. II. Gives free community legal education . III. Gives free legal advice to charitable or community organisations. b. Some argue that the legal profession should play a part in fostering the availability of legal services to those members of the public who cannot otherwise access justice. c. They argue that pro bono work should be mandatory, but the profession is generally against this idea. d. Entry barriers to legal practice, they note, are designed to serve the community, and so should not be used to justify additional obligations. e. No Australian jurisdiction do professional rules directly address the issue of pro bono service. f. Those who favour setting an aspirational/personal target of pro bono work contend it should be viewed in the context of professional values, and not as a burden. Duty to encourage settlement 1. It is the lawyer's responsibility to actively seek and encourage the effective resolution of disputes, preferably out-of-court (Marriage of Anderson), and without concern over which process is the most profitable. 2. Failure to do so (e.g. discouraging mediation when it is actually beneficial to dispute resolution) may be taken into account by the courts when determining costs. 3. Lawyers should not unduly fear liability in negligence should their advice to compromise prove inaccurate. This advice is not considered negligent merely because a court later considers that a more favourable outcome might have prevailed in litigation.

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Enforcement of duties- remedies for breach of duty 1. Breach of competence: a. This is usually remedied via a damages award, which seeks to place a client back in the position he was in had the breach not been committed in the first place. b. Where the client's own negligence has contributed to his loss, the court may reduce damages awarded. c. A further difference between remedies in contract and in tort is that in contract, damages are available upon proving a breach. In tort damages require proof that the breach of duty caused the client's loss. d. This test of causation is not only a 'but for' test; the lawyer's breach of duty must be a legally effective cause of the client's loss.

e. The concern here relates to client attempts to cast complete liability on lawyers for loss generated by external factors (Cridlands). f. A judge must therefore make a comparison of the culpability and of the acts of the parties causing damage and, thus, to the comparative negligence of each party (Vella). g. Civil liability legislation states that a determination that negligence caused particular harm requires proof that the lawyer's negligence was a necessary condition of the harm (factual causation) and that it is appropriate for the scope of the negligent lawyer's liability to extend to the harm so caused. h. NSW statutes add that the matter must be determined subjectively on the basis of each unique case. i...