Professional Conduct and Practice Rules 2005
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- Roderick Warren
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1 LAW INSTITUTE OF VICTORIA LIMITED (commencement date 30 June 2005) Reprinted with amendments No. 1/2005 (commencing 30 September 2005)
2 i. CONTENTS INTRODUCTION Commencement Date Application of Rules Amendment of Professional Conduct and Practice (Amendment) Rules DEFINITIONS...2 GENERAL PRINCIPLES OF PROFESSIONAL CONDUCT...7 (A) Object of Rules...7 (B) Serving the interests of Justice and complying with the Law...7 (C) Reading down of rules...7 RELATIONS WITH CLIENTS Duty to Client Honesty and Confidentiality Agreeing to act for a client...8 2A. Conditional Costs Agreements Confidentiality Acting against a former client Practitioners employed otherwise than by a practitioner Termination of Engagement Ownership of clients' documents - termination of engagement Acting for more than one party Avoiding conflict of interest (where practitioner s own interest involved) Receiving a benefit under a will or other instrument Practitioner and client - borrowing transactions...15 ADVOCACY AND LITIGATION RULES Duty to a client Independence - Avoidance of personal bias Frankness in court Delinquent or guilty clients Responsible use of privilege Integrity of evidence Communications with opponent Integrity of hearings Prosecutor's duties...24 RELATIONS WITH OTHER PRACTITIONERS Communications...27
3 ii 22. Undertakings...27 [CONTENTS cont.] 23. Taking over a matter from another practitioner Transfer of a practitioner's practice Communicating with another practitioner's client...29 RELATIONS WITH THIRD PARTIES Contracting for services Undertakings Communications Debt collection or mercantile agencies A. Articled Clerks...31 LEGAL PRACTICE Standard of Conduct Disclosure Requirements Conducting another business Referral fees - Taking unfair advantage of potential clients - Commissions Client referral Advertising Hours of practice and practice names Storage of client records Request for itemised bill of costs Communication with clients Rights and Duties of Corporate Practitioners Rights and Duties of Employee Practitioners...38 SCHEDULE... Form 1 Acknowledgment in accordance with rule Form Form 3 Consent to Referral...41
4 1 INTRODUCTION These Practice Rules may be cited as the and are made by Law Institute of Victoria Limited under s72 of the Legal Practice Act Commencement Date The come into operation on 30 June Application of Rules These rules apply to all regulated practitioners of Law Institute of Victoria Limited. 3. Amendment of Professional Conduct and Practice (Amendment) Rules 2003 The Professional Conduct and Practice (Amendment) Rules 2003 are amended. (The amendments are footnoted throughout these rules.) With the exception of the rules headed "Advocacy & Litigation Rules", which have specific application to advocates, the rules which follow apply principally to practitioners practising as solicitors, or as solicitors and barristers. The term "practitioner" is used throughout to refer to persons practising as solicitors, or as barristers, or as barristers and solicitors and, where the context requires, to refer to firms. The latter is particularly relevant to solicitors because, unlike barristers, solicitors are frequently employees rather than principals. The rules headed Advocacy & Litigation Rules apply to all practitioners when engaged in advocacy, whether their predominant style of practice is that of a solicitor or a barrister. The rules are divided into eight categories under the following headings:- 1. Introduction 2. Definitions 3. General principles of professional conduct 4. Relations with clients 5. Advocacy & Litigation Rules 6. Relations with other lawyers 7. Relations with third parties 8. Legal practice Each of the last five categories is preceded by a statement of general principle, which is not intended to constitute by itself a rule, but is intended to describe the underlying principles and objectives of the rules which follow.
5 2 The Law Council of Australia model rules upon which these rules are based was intended as a set of model rules which each Constituent Body of the Law Council of Australia might adopt. These rules have followed the model rules with a view to securing uniformity with other states and territories.
6 3 DEFINITIONS In these rules unless the context requires otherwise the following terms have the following meaning: "Act" means the Legal Practice Act "associate" in reference to a practitioner means- (c) (d) (e) a partner, employee, or agent of the practitioner or, in the case of a practitioner not being a firm, of the practitioner's firm; a corporation or partnership in which the practitioner has a material beneficial interest; in the case of an incorporated practitioner, a director of the corporation or of a subsidiary of the corporation; a member of the practitioner's immediate family; or a member of the immediate family of a partner of the practitioner's firm or of the immediate family of a director of an incorporated practitioner or a subsidiary of the corporation. associate 1 in reference to a principal employer means any body corporate: (c) which is related, within the meaning of the Corporations Act to the principal employer; for which the principal employer has agreed to provide or procure legal services or general management services ( managed corporation ) and of which the principal employer, or body corporate which is related within the meaning of the Corporations Act to the principal employer, is a shareholder; or which is involved in a joint venture with: (i) (ii) the principal employer; a body corporate which is related to the principal employer; or (iii) a managed corporation, if the principal employer has agreed to provide, or procure, legal services or general management services for that joint venture. "case" means the court proceedings for which the practitioner is engaged, or 1 Amendment No. 1 30/06/05
7 4 the dispute in which the practitioner is advising. "client" "complying member" and "complying firm member" "compromise" conditional costs agreement Corporations Act 2 "corporate practising certificate" 3 "corporate practitioner" 4 costs and legal costs costs agreement "court" with respect to a practitioner or a practitioner's firm means a person (not an instructing practitioner) for whom the practitioner is engaged to provide legal services for a matter. of the Managed Mortgages Section of the RPA bear respectively their defined meanings in the Managed Mortgages Rules includes any form of settlement of a case, whether pursuant to a formal offer under the rules or procedure of a court, or otherwise. means a conditional costs agreement referred to in section 97(2) of the Act. means the Corporations Act 2001 (Cth) means a practising certificate that is subject to the condition that the holder is authorised to engage in legal practice, as referred to in section 20(2)(iii) of the Act, as a corporate practitioner. means a practitioner who is the holder of a corporate practising certificate. means all amounts that a person has been or may be charged by, or is or may become liable to pay, a practitioner for the provision of legal services including disbursements but not including interest. means an agreement about the payment of legal costs. means any body described as such; any tribunal exercising judicial, or quasi-judicial, functions; (c) a professional disciplinary tribunal; 2 Amendment No. 1 30/06/05 3 Amendment No. 1 30/06/05 4 Amendment No. 1 30/06/05
8 5 (d) an industrial tribunal; (e) an administrative tribunal; (f) an investigation or inquiry established or conducted under statute or by a Parliament; (g) a Royal Commission; (h) an arbitration or mediation or any other form of dispute resolution. "current proceedings" "employee practising certificate" 5 employee practitioner 6 employer 7 "engagement" "firm" means proceedings which have not been determined, including proceedings in which there is still the real possibility of an appeal or other challenge to a decision being filed, heard or decided. means a practising certificate that is subject to the condition that the holder is authorised to engage in legal practice, as referred to in section 20(2)(iii) of the Act, as an employee of another legal practitioner or a firm. means a practitioner who is the holder of an employee practising certificate. in relation to a corporate practitioner means a person or body (not being another legal practitioner or a firm) who or which employs the practitioner whether or not the person or body pays or contributes to the practitioner s salary. means the appointment of a practitioner or of a practitioner's firm to provide legal services for a matter. means a firm as defined in the Act and, in relation to a practitioner not being a firm, means: a partnership of which the practitioner is a partner; or a practitioner, partnership or person (including a corporation) which employs the practitioner. "forensic judgment" means a decision of a practitioner made in the course of a case, but does not include a decision as to 5 Amendment No. 1 30/06/05 6 Amendment No. 1 30/06/05 7 Amendment No. 1 30/06/05
9 6 the commencement of proceedings; the joinder of parties; (c) admissions or concessions of fact; (d) amendments of pleadings; (e) undertakings to a court; (f) a plea in criminal proceedings; but does include advice given to assist a client or an instructing practitioner to make such decisions. "immediate family" "instructing practitioner" "insurance company" "legal services" "matter" means the spouse (which expression may include a de facto spouse or partner of the same sex), or a child, grandchild, sibling, parent or grandparent of a practitioner. means a practitioner who engages another practitioner to provide legal services for a client for a matter. includes any entity, whether statutory or otherwise, which indemnifies persons against civil claims. the subject of an engagement, means all services provided or required to be provided by a practitioner or the practitioner s firm to fulfil the engagement provided that at least some of the services are legal in character or are provided, or to be provided, by the practitioner or the practitioner s firm in the capacity of a practitioner and includes all services provided or to be provided by a practitioner or the practitioner s firm incidental to or in connection with an engagement. with respect to an engagement, means any transaction, case or file to which the engagement relates and includes: (c) (d) a case; a dealing between parties, or a unilateral act, that may affect, create or be related to a status, a right or an entitlement or interest in property of any kind; advice on the law; or preparation of a document or submission "opponent" means
10 7 the practitioner appearing for a party opposed to the client of the practitioner in question; or that party, if the party is unrepresented. "order" "practitioner" "principal employer" 8 includes a judgment, decision or determination. means a person or corporation entitled to practise the profession of the law and, if the context admits or requires, a firm. in relation to a corporate practitioner means the practitioner s employer who or which pays the practitioner's salary or, if more than one person or body contributes to the practitioner's salary, the person or body who or which pays the largest part of that salary. 8 Amendment No. 1 30/06/05
11 8 principal practising certificate 9 principal practitioner 10 "prosecutor" "RPA" means a practising certificate that is subject to the condition that the holder is authorised to engage in legal practice, as referred to in section 20(2)(i) of the Act, as a principal. means a practitioner who is the holder of a principal practising certificate. means a practitioner who appears for the complainant or Crown in criminal proceedings. means Law Institute of Victoria Limited. 9 Amendment No. 1 30/06/05 10 Amendment No. 1 30/06/05
12 9 GENERAL PRINCIPLES OF PROFESSIONAL CONDUCT (A) Object of Rules The object of these rules is to ensure that each practitioner: (i) (ii) (iii) acts in accordance with the general principles of professional conduct; discharges that practitioner s obligations in relation to the administration of justice; and supplies to clients legal services of the highest standard unaffected by self interest. (B) Serving the interests of Justice and complying with the Law A practitioner must not, in the course of engaging in legal practice, engage in, or assist, conduct which is: (i) (ii) (iii) dishonest or otherwise discreditable to a practitioner; prejudicial to the administration of justice; or likely to diminish public confidence in the legal profession or in the administration of justice or otherwise bring the legal profession into disrepute. (C) Reading down of rules If, but for this rule, any provision of the foregoing rules or any other rule would be inconsistent with the general principles stated in section 64 of the Act the provision or rule shall be construed so that it is consistent with such general principles.
13 10 RELATIONS WITH CLIENTS Practitioners should serve their clients competently and diligently. They should be acutely aware of the fiduciary nature of their relationship with their clients, and always deal with their clients fairly, free of the influence of any interest which may conflict with a client's best interests. Practitioners should maintain the confidentiality of their clients' affairs, but give their clients the benefit of all information relevant to their clients' affairs of which they have knowledge. Practitioners should not, in the service of their clients, engage in, or assist, conduct that is calculated to defeat the interests of justice or that is otherwise in breach of the law. 1. Duty to Client 1.1 Honesty and Confidentiality A practitioner must, in the course of engaging in legal practice, act honestly and fairly in clients best interests and maintain clients confidences. 1.2 Expedition A practitioner must, in the course of engaging in legal practice, use the practitioner s best endeavours to complete legal work as soon as reasonably possible. 2. Agreeing to Act for a Client A practitioner should agree to act for a client in a matter only when the practitioner reasonably expects: 2.1 to serve the client honestly and fairly, and with competence and diligence; and 2.2 to attend to the work required with reasonable promptness. 2A. Conditional Costs Agreements 2A.1 In a conditional costs agreement, with respect to a matter, unless some other meaning is clearly stated and the practitioner complies with rule 2A(2)(d): successful outcome, win, success or any similar expression means that the client will receive an amount of money after payment of all liabilities (including tax) the client incurs in the matter to the practitioner and to any other person, including any opposing party; no fee, no charge or any similar expression means that the client will not be liable for costs to the practitioner unless the client achieves a successful outcome in the matter.
14 11 2A.2 A conditional costs agreement must state, in sufficient detail to a client each of the following (in separate paragraphs) to the extent that each is applicable: (c) (d) that the client may be liable to meet disbursements or third party payments with, in either case, examples of what disbursements or payments the client might be liable to meet. The practitioner will advise the client if there is any significant change in that liability; that the client may incur a liability for legal costs and disbursements payable to another party to the proceedings. that the client may incur liability in the proceedings to another party for damages in certain circumstances (such as where a counter claim is lodged).; and that if successful outcome, win, success or any similar expression or no fee, no charge or any similar expression do not bear the respective meanings attributed to them in rule 2A.1, a full statement of what the expression means and how that meaning differs from the meaning set out in rule 2A.1. 2A.3 A practitioner who enters into a conditional costs agreement in respect of an engagement must explain the conditional costs agreement to the client and ensure that the client understands the explanation. A statement in writing by the client that the client understands a conditional costs agreement is not conclusive evidence of that fact. 3. Confidentiality 3.1 A practitioner must never disclose to any person, who is not a partner proprietor director or employee of the practitioner s firm, any information which is confidential to a client and acquired by the practitioner's firm during the client's engagement, unless the client authorises disclosure; the practitioner is compelled by law to disclose; the practitioner discloses information in circumstances in which the law would probably compel its disclosure, despite a client's claim of legal professional privilege, and for the sole purpose of avoiding the probable commission or concealment of a serious criminal offence; the information has lost its confidentiality; or the practitioner obtains the information from another person who is not bound by the confidentiality owed by the practitioner to the client and who does not give the information confidentially to the practitioner.
15 12 4. Acting Against a Former Client A practitioner must not accept an engagement to act for another person in any matter against, or in opposition to, the interest of a person ("the former client"): for whom the practitioner (or, in the case of a practitioner not being a firm, the practitioner's current or former firm) or the former firm of a partner, director or employee of the practitioner or of the practitioner's firm has acted previously and has thereby acquired information personally, confidential to the former client and material to the matter; and if the former client might reasonably conclude that there is a real possibility the information will be used to the former client's detriment. 5. Practitioners Employed Otherwise than by a Practitioner A practitioner, who is employed by a corporation (not being an incorporated practitioner) or by any other person who is not a practitioner, must not, despite any contrary direction from the practitioner's employer, act as a practitioner in the performance of any legal services in breach of any of the provisions of the Act or these rules. 6. Termination of Engagement 6.1 A practitioner must complete the legal services required by the practitioner's engagement, unless the practitioner and the practitioner's client have otherwise agreed; the practitioner is discharged from the engagement by the client; the practitioner terminates the engagement for just cause, and on reasonable notice to the client; or in the case of a practitioner not being a firm, the practitioner s engagement is terminated by the practitioner s firm. 6.2 Despite rule 6.1, a practitioner, who is engaged to act for a client required to stand trial for a serious criminal offence, must not terminate the engagement and withdraw from the current proceedings on the ground that the client has failed to make arrangements satisfactory to the practitioner for payment of the practitioner's costs, unless the practitioner has, a reasonable time before the date appointed for the commencement of the trial, or the commencement of the sittings of the Court in which the trial is listed served notice in writing on the client of the practitioner's intention to terminate the engagement and withdraw from the current proceedings at the expiration of seven (7) days if the client fails, within that time, to make satisfactory arrangements for payment of the practitioner's costs, and
16 given appropriate notice to the Registrar of the Court in which the trial is listed to commence. 6.3 Without limiting the general application of rule 6.1, a practitioner who is acting for a legally assisted client in any current proceeding may terminate the practitioner s engagement, upon giving reasonable notice in writing to the client of the practitioner s intention to do so, if the client s grant of legal aid is withdrawn or otherwise terminated; and the client is unable to make any other satisfactory arrangements for payment of the practitioner s costs which would be incurred if the retainer continued.
17 14 7. Ownership of Clients' Documents - Termination of Engagement 7.1 Rule 7 applies subject to any contrary order which may be made in respect of a client's documents by any court of competent jurisdiction. 7.2 A practitioner must retain, securely and confidentially, documents relating to a particular matter and to which a client is entitled: during the practitioner's engagement for that matter and at least seven (7) years thereafter; until the practitioner gives them to the client or a person authorised by the client; or until the client instructs the practitioner to deal with them in some other lawful manner Upon completion or termination of a practitioner s engagement, a practitioner must, when requested to do so by the client or former client, give to the client or former client; or another person authorised by the client or former client any documents related to the engagement to which the client is entitled, subject to rule Rule will not apply where the practitioner claims a lien over the documents for costs due to the practitioner by the client or former client; or in the case of a practitioner not being a firm, the practitioner s firm has terminated the practitioner s engagement. 7.4 Despite rule 7.3.2, a practitioner who claims to exercise a lien for unpaid costs over a client's documents which are essential to the client's defence or prosecution of current proceedings, must: deal with the documents as provided in rule 23.4, if another practitioner is acting for the client; or upon receiving satisfactory security for the unpaid costs, deliver the documents to the client. 7.5 For the purposes of rule 7, the documents to which a client of a practitioner is entitled include: documents prepared by a practitioner for the client, or predominantly for the purposes of the client, for the purposes of the client's matter; and
18 documents received by a practitioner from a third party for or on behalf of the client or intended for the use or information of the client, for the purposes of a client s matter.
19 16 8. Acting for more than one party 8.1 For the purposes of rule 8, "party" includes each one of the persons or corporations who, or which, is jointly a party to any matter. 8.1A Nothing in rule 8 shall limit or restrict any common law, equitable or statutory duty or obligation which a practitioner owes. 8.1B Nothing in rule 8.1A shall be construed to prohibit the provision of legal services in which a conflict of interest may occur- (i) (ii) where no material conflict of interest has arisen, and where the practitioner is permitted to act as provided in rule 8.5 or in other circumstances where the practitioner reasonably believes that the likelihood of a material conflict of interest arising is unlikely. 8.2 A practitioner must avoid conflict of interest between two or more clients of the practitioner. 8.3 A practitioner who, or whose firm intends to act for a party, to any matter where the practitioner is also intending to accept instructions to act for another party to the matter must be satisfied, before accepting an engagement to act, that each party is aware that the practitioner is intending to act for the others and consents to the practitioner so acting in the knowledge that the practitioner: may, thereby, be prevented from - (i) (ii) disclosing to each party all information relevant to the matter within the practitioner's knowledge; or giving advice to one party which is contrary to the interests of another; and will cease to act for all parties if the practitioner would, otherwise, be obliged to act in a manner contrary to the interests of one or more of them. 8.4 If a practitioner who is acting for more than one party to any matter determines that the practitioner cannot continue to act for all of the parties without acting in a manner contrary to the interests of one or more of them, the practitioner must immediately cease to act for all parties. 8.5 A practitioner must not act where the practitioner is acting or intending to act: for both vendor and purchaser in connection with the contract for the sale of land or a transfer of land for value at arm's length for both vendor and purchaser in connection with the contract for the sale of a business at arm's length;
20 for both lessor and lessee in connection with the lease of land or an agreement for the lease of land for value at arm's length; for both financier and borrower in connection with the loan of money or provision of finance or an agreement to lend money or provide finance; or for both the purchaser of land and the lender of money or provider of finance intended to be secured by a mortgage of that land, unless and until the practitioner obtains the written acknowledgment and agreement of each party in or to the effect of Form 1 in the Schedule to these rules after first fully informing that party in writing concerning the potential disadvantages to that party of the practitioner so acting. 8.5A Rule 8.5 does not authorise a practitioner to act in the circumstances proscribed by rules 8.6, 8.7 or 8.8 or in breach of any common law, equitable or statutory duty or obligation referred to in rule 8.1A. 8.6 A practitioner must not act for a guarantor in connection with the loan of money or the provision of finance or an agreement to lend money or provide finance where the practitioner is also acting in the same transaction for the borrower or the financier. Rule 8.6 does not prohibit the practitioner acting for a borrower and a guarantor if in the same transaction the guarantor is: (c) (d) (e) (f) (g) (h) (i) a borrower; a director of a borrower; a shareholder of a borrower; a beneficiary in a trust of which the borrower is the trustee; a party holding a beneficial interest in the borrower; a body corporate related to a borrower within the meaning of the Corporations Act; a director of such a related body corporate; a shareholder of such a related body corporate; or a party holding a beneficial interest in such a related body corporate, nor does rule 8.6 prohibit the practitioner acting for both the financier and the guarantor in the same transaction if they are related bodies corporate within the meaning of the Corporations Act. For the purpose of rule 8.6 guarantor includes indemnifier, surety or a person or company providing security for a loan or finance.
21 A practitioner must not act in any matter relating to land for a person carrying on business as a builder, developer or subdivider where the practitioner is acting or intending to act for any other party contracting with that person or entity in the course of that business in relation to the land. 8.8 A practitioner must not act for a borrower and a financier in connection with the loan of money or provision of finance or an agreement to lend money or provide finance if the financier is held out to the public as being in the business of lending or providing finance and the financier is not- a bank; a trustee company as defined in the Trustee Companies Act 1984; (c) (d) (e) a practitioner who is a complying member or, as the case may be, a complying firm member of the Managed Mortgages Section of the RPA (or the nominee of the practitioner); a society within the meaning of Part 6 of the Financial Institutions (Vic) Act 1992; or the responsible entity or custodian for a managed investment scheme registered under chapter 5C of the Corporations Act or a person holding an Australian financial services licence under Part 7.6 of the Corporations Act Avoiding Conflict of Interest (where practitioner's own interest involved) 9.1 A practitioner must not, in any dealings with a client allow an interest of the practitioner or an associate of the practitioner to conflict with the client's interest; exercise any undue influence intended to dispose the client to benefit the practitioner or an associate of the practitioner in excess of the practitioner's fair remuneration for the legal services provided to the client; 9.2 A practitioner must not accept instructions to act or continue to act for a person in any matter when the practitioner is, or becomes, aware that the person's interest in the matter is, or would be, in conflict with the practitioner's own interest or the interest of an associate. 10. Receiving a Benefit under a Will or other Instrument 10.1 A practitioner who receives instructions from a client to draw a will appointing the practitioner or an associate of the practitioner an executor must inform the client in writing before the client signs the will of any entitlement of the practitioner, or the practitioner's firm or associate, to claim commission; 1 Amendment No. 1/2005 (30 September 2005)
22 of the inclusion in the will of any provision entitling the practitioner, or the practitioner's firm or associate, to charge legal costs in relation to the administration of the estate, and; if the practitioner or the practitioner's firm or associate has an entitlement to claim commission, that the person could appoint as executor a person who might make no claim for commission A practitioner who receives instructions from a person to draw a will under which the practitioner or the practitioner's firm or associate will, or may, receive a substantial benefit other than any proper entitlement to commission (if the practitioner is also to be appointed executor) and the reasonable professional fees of the practitioner or the practitioner's firm; or draw any other instrument under which the practitioner or the practitioner's firm or associate will, or may, receive a substantial benefit in addition to the reasonable remuneration, including that payable under a conditional costs agreement, must: decline to act on those instructions; and offer to refer the person, for advice, to another practitioner who is not an associate of the practitioner; unless the person instructing the practitioner is either: (i) (ii) a member of the practitioner's immediate family; or a practitioner, or a member of the immediate family of a practitioner, who is a partner, employer, or employee, of the practitioner For the purposes of rule 10: "substantial benefit" means a benefit which has a substantial value relative to the financial resources and assets of the person intending to bestow the benefit. 11. Practitioner and Client - Borrowing Transactions 11.1 A practitioner must not borrow any money, nor permit or assist an associate to borrow any money from: a client of the practitioner, or the practitioner's firm; a former client of the practitioner or practitioner's firm who has indicated continuing reliance upon the advice of the practitioner or the practitioner's firm in relation to the investment of money; or a person who has sought from the practitioner, or the practitioner s firm, advice in relation to the investment of money or the management of the person s financial affairs.
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