Conduct unbecoming: Breach of Conduct and Client Care Rules and trust account regulations
This is a summary of a decision by a Lawyers Standards Committee under the Lawyers and Conveyancers Act 2006.This summary was published in LawTalk 764, 28 January 2011.
A lawyer was found guilty of conduct unbecoming after the Standards Committee’s own-motion investigation found that several aspects of his practice breached the Conduct and Client Care Rules and the trust account regulations. The lawyer was ordered to undergo practical training and to take advice from the New Zealand Law Society’s Friends Panel.
The Standards Committee had investigated after a Law Society inspection raised several concerns, including whether the lawyer was properly supervising his practice and other more specific issues involving, for example, his letters of engagement.
The lawyer told the Committee he had made a number of changes, some of them specifically recommended by the Inspectorate, and all the problems had now been rectified:
- His letters of engagement now included the information required by Rule 3.4.
- The practice’s standard terms and conditions now informed clients that agency costs are included in disbursements, so that bills of costs would comply with Rule 5.9.
- The practice now complied with reg 11(3)(b) of the Lawyers and Conveyancers Act (Trust Account) Regulations 2008, which requires all entries in the client ledger accounts, and in other records that are the source of those entries, to identify the source or destination for each entry so they can be traced backward and forward. The lawyer’s accounting staff would now ensure all cheques specified the name of the client on whose behalf they were being paid, and new accounting software would assist inspectors in checking that reg 11(3)(b) was complied with.
- The lawyer had also made changes to ensure his practice would be properly supervised in accordance with Rule 11.3. Payments from the trust account would now have to be approved by two people, and his practice manager had attended a seminar for trust account administrators. Further, after being overseas for a long period, the lawyer now planned to remain in New Zealand.
The Standards Committee found the lawyer guilty of conduct unbecoming and unsatisfactory conduct. As well as ordering him to pay $500 in costs, it made several orders focusing on training and mentoring:
It ordered him to take advice on managing his practice from a member of the Law Society’s Friends Panel, and to report back to the Committee.
It ordered him to undergo practical education and training – in particular to attend the Trust Account Supervisor Refresher course referred to in the regulations, and to give the Standards Committee a brief report.
It also ordered him to make his practice available to be inspected by the New Zealand Law Society Inspectorate.