Tag Archives: overarching obligation

Client complaints – a tool kit for solicitors

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Some lawyers have never received a complaint from a client.

Or so they say.

Such prodigies, liars and recent arrivals to the profession are vastly outnumbered by the rest of us.

This might explain the big audience of solicitors who turned out this week at a seminar Gordon & Jackson hosted on the twin topics of client complaints and recent cases dealing with the Civil Procedure Act.

I delivered a paper on the first topic. The paper’s section headings will give you the flavour of its content:

  1. Complaints are inevitable;
  2. Try not to take complaints personally (and get help, of whatever variety);
  3. Categories of complaint under the Uniform Law;
  4. Categories of complaint beyond the Uniform Law;
  5. Your LPLC insurance – the good news and the bad;
  6. Avoiding complaints in the first place; and
  7. Professional standards scheme – you are a participant, aren’t you?

My colleague Monika Paszkiewicz spoke on the Civil Procedure Act. Her paper includes reference to Judd J’s recent observations (in ACN 005 490 540 Pty Ltd v Robert Frederick James Pty Ltd [2016] VSC 217 at paras 18 -19) that solicitors who threaten each other too willingly with personal costs applications under the Civil Procedure Act might themselves be breaching the very statute they are invoking.

Client complaints and the Civil Procedure Act have obvious potential overlap for litigation solicitors. Download the two papers (combined as a single document) here and file them away with your Civil Procedure Act resources.

More overblown than overarching: Court of Appeal smacks solis with costs orders and disallows fees

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The Victorian Court of Appeal last week thumped three large law firms for work which was not “reasonable and proportionate” within the meaning of the Civil Procedure Act 2010.

What’s more, it effectively invited other Victorian courts to do likewise more often.

The case is Yara Australia Pty Ltd v Oswal [2013] VSCA 337.

Expect to hear a lot more about it. It is the first detailed appellate consideration of the Civil Procedure Act obligations on parties and their lawyers.

Many civil litigators will find it confronting reading.

The case

In Yara, three applicants sought leave to appeal against their failure to obtain security for costs. Although they were later able to point to a wider strategic purpose, the amount of security sought between the three of them ostensibly totalled about $141,000, (relatively small beer for the Court of Appeal.)

The applicants had separate but similar interests. Between them, they were represented by solicitors Clayton Utz, Herbert Smith Freehills and K & L Gates, 3 silks and 3 junior counsel.

Their application went down after a single day’s hearing. And worse was to come for the lawyers.

After refusing the application, the Court of Appeal of its own motion invited submissions on the question of whether anyone had breached their overarching obligations under the Civil Procedure Act 2010 in the conduct of the leave to appeal application.

The resulting judgment starts with two factual questions. “First, whether there was any over- representation of a party by counsel, and second, whether the material produced on the hearing of the application for leave to appeal was unnecessary or excessive.”

The Court was ultimately persuaded that the abundance of barristers did not constitute “over-representation” but it was less forgiving about the documentation filed in support of the application.

Why? Because even excluding the notices of appeal and written cases, the application book exceeded 2700 pages and 6 lever arch folders.

In their joint judgment Redlich and Priest JJA and Macaulay AJA were scathing. They variously described parts of it as “entirely otiose”, “not directly relevant”, “excessive”, “superfluous”, “entirely unnecessary” , “repetitious” and containing “a substantial amount of duplicated material”.

The Court concluded by ordering each applicant to pay the respondents’ costs of the application.

Each applicant’s solicitor was then hit with a double whammy. First, each solicitor was ordered to indemnify its client for half of the respondent’s costs “incurred as a consequence of the excessive or unnecessary content of the application books.” Secondly, each applicant’s solicitor was “disallowed recovery from the applicant of 50% of the costs relating to the application books, and costs incidental thereto.”

Some cherries from the judgment

The Court of Appeal is clearly hoping this approach will catch on.

And judges are being invited to act on their own initiative where the parties themselves are bashful.

Here are some extracts from the judgment (citations omitted) to give you its flavour.

5       The statutory regime and the obligations that are imposed by the [Civil Procedure Act] have not previously been considered in any detail at an appellate level. As the enforcement of the overarching obligations under the Act has been so little traversed, there is presently little to guide judicial officers as to the extent of the Court’s powers and the means by which parties or their legal representatives can be penalised for any contravention. We have thus addressed some of these issues at greater length than would ordinarily be necessary when a contravention of the Act is under consideration.

….

14     Each party and their solicitor and counsel have an obligation to comply with the overarching obligation. Whether any of them have breached that overarching obligation is to be determined by an objective evaluation of their conduct having regard to the issues and the amount in dispute in the proceeding. The legal practitioners’ duty is non-delegable. The obligation will override their duty to their client where the discharge of that duty would be inconsistent with the overarching obligation. The legal practitioner will not be relieved of this overarching responsibility because of the instructions of their client.

15     Legal practitioners, whether solicitor or counsel, involved in the preparation of pleadings, affidavits or other materials that are to be used in the proceeding or who provide advice as to such matters, have individual responsibilities to comply with the overarching obligation. Both solicitor and counsel also have an overarching responsibility with respect to the extent and level of their client’s representation. Each must ensure that, having regard to the issues, the extent and level of representation proposed is reasonable and proportionate. Advice or instructions given or received by legal practitioners, and instructions given by the client, may inform but will not be determinative of the question whether, viewed objectively, there has been a breach of the obligation.

         ….

18     Section 29 of the Act provides the Court with broader and more flexible powers than under the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’) or under its inherent jurisdiction. Rule 63.23(1) enables the Court to make orders for costs against a legal practitioner who has caused costs to be incurred improperly by a failure to act with reasonable competence and expedition. However, the primary object of r ? 63.23(1) is not punitive or disciplinary but compensatory, enabling reimbursement of a party’s costs incurred because of the default of the solicitor. The primary object of the Rule is not to punish the solicitor, but to protect the client who has suffered and to indemnify the party who has been injured. Rule 63.23(1) also protects solicitors from the negligence or incompetence of counsel.

20     The Court’s powers under s 29 of the Act include the power to sanction legal practitioners and parties for a contravention of their obligations …. Moreover, the power to sanction is not confined to cases of incompetence or improper conduct by a legal practitioner. Where there is a failure by the practitioner, whether solicitor or counsel, to use reasonable endeavours to comply with the overarching obligations, it will be no answer that the practitioner acted upon the explicit and informed instructions of the client. A sanction may be imposed where, contrary to s 13(3)(b), the legal practitioner acts on the instruction of his or her client in breach of the overarching obligations.

21     …. In our view, the enactment of s 29 together with s 28(2) imbues the Court with broad disciplinary powers that may be reflected in the costs orders that are made. The Court is given a powerful mechanism to exert greater control over the conduct of parties and their legal representatives, and thus over the process of civil litigation and the use of its own limited resources.

22     The Act does not merely reaffirm the existing inherent powers of the court but provides a powerful indication of the will of the Parliament about the values sought to be achieved by the way in which cases are managed in the courts and the balances that have to be struck….

23     It is therefore somewhat surprising that despite the length of time the Act has been in force, the scope of the sanction provisions in the Act for a failure to comply with the overarching obligations has been under-utilised.

….

25     The explanation for the under-utilisation of the provisions of the Act lies in part in a false perception that these provisions and the overarching obligations do not effect any material change to the Rules and the inherent jurisdiction of the Court…. The Act creates obligations which extend beyond those in the Rules and confers upon the courts a panoply of powers not found in the Rules.

26     The Act prescribes that parties to a civil proceeding are under a strict, positive duty to ensure that they comply with each of the overarching obligations and the court is obliged to enforce these duties. The statutory sanctions provide a valuable tool for improving case management, reducing waste and delay and enhancing the accessibility and proportionality of civil litigation. Judicial officers must actively hold the parties to account.

27     Yet as we have observed, sanctions imposed for a breach of any overarching provisions have been a rarity at first instance. When no party invites the court to determine whether there has been a breach of the Act, there may be a judicial disinclination to embark upon such an own-motion inquiry for fear that inquiry as to a potential breach may be time consuming and may require the introduction of material that was not before the court as part of the proceeding. Such fears cannot relieve judges of their responsibilities….

You can probably still hear this judgment causing a hush in mega-firms the length of Collins Street (starting with their photocopying departments).

How Edelsten’s costs application against solis backfired

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Last October I posted about Dr Edelsten’s adventures in the Supreme Court of Victoria against a lady friend in (Mainly) keeping a sugar daddy’s confidences.

A quick reminder. In an entertaining but unflattering judgment Dr Edelsten won an order for $US5000 plus certain limited suppression orders against a Ms da Silva.

Among other things, Beach J found that “most of the evidence given by the defendant was demonstrably false and could not be believed. However, Dr Edelsten was no more an impressive witness than Ms da Silva.”

Now the aftermath (which escaped me among the distractions of the summer holidays).

The week before Christmas Dr Edelsten went back to court and sought his costs of the litigation against the defendant’s solicitors – on an indemnity basis.

Among other things, he relied upon the Civil Procedure Act.

He argued that swathes of the defendant’s case had no proper basis, her solicitors must have known this and therefore they should not have persisted with key aspects of the defendants’ case.

Beach J was not swayed.

“I am satisfied that at all times … the defendant’s solicitors were acting on the instructions of the defendant. Indeed, when the defence was eventually abandoned, it was abandoned in the face of the defendant’s evidence to the contrary.

… Having regard to the instructions the defendant’s solicitors then possessed, I see nothing improper, or in breach of any rule of conduct, or in breach of any overarching obligation or other provision of the Civil Procedure Act, in the drawing, settling and filing of the defendant’s defence. …

It is always possible to say that an issue, upon which it becomes clear that a party will ultimately be unsuccessful, could have been abandoned earlier if greater diligence had been exercised. However, the mere failure to abandon a point at the earliest possible time does not mandate a conclusion that an overarching obligation of the Civil Procedure Act has been breached.

…. In the end, I have come to the conclusion that while a counsel of perfection would have suggested that the concession made on the afternoon of the third day of the trial could (and possibly should) have been made 24 hours earlier, the failure to take this step at that time did not involve the contravention of any of the overarching obligations in the Civil Procedure Act.

And the ordeal was not yet over.  Beach J concluded with an order that Dr Edelsten pay the solicitors’ costs of his failed application on a solicitor /client basis (apparently because the judge considered the application had been sufficiently hopeless to warrant costs on more than the usual party/party basis).

The costs decision is here.