Unsatisfactory conduct: Terminating retainer without good cause
This is a summary of a decision by a Standards Committee under the Lawyers and Conveyancers Act 2006. This summary was published in LawTalk 764, 28 January 2011.
A lawyer was censured for terminating her retainer with a client without good cause and for failing to help him find another lawyer.
The client was buying shares in a company. After the agreement had been signed with the seller, the lawyer and the client had a disagreement about whether it was advisable to try to enforce a particular term of the agreement. As a result, the lawyer told the client she would no longer act for him.
The client complained that the lawyer had abandoned him at a critical time in breach of her duty of care, and she had failed to complete the services for which she was retained. In response, the lawyer said the client had been extremely rude to her, telling her she did not know the law and accusing her of trying to “push him into a corner.” She said that communication with the client had broken down at this point.
The Standards Committee found that the lawyer’s conduct had breached Rules 4.1 and 4.2 of the Conduct and Client Care Rules. Rule 4.1 deals with when a lawyer will have “good cause” to refuse instructions from a client or prospective client. “Good cause” includes: “a lack of available time, the instructions falling outside the lawyer’s normal field of practice, instructions that could require the lawyer to breach any professional obligation, and the unwillingness or inability of the prospective client to pay the normal fee of the lawyer concerned for the relevant work.”
Rule 4.2(c) permits a lawyer to terminate a retainer without completing the services in question if the lawyer has good cause and gives reasonable notice to the client specifying the reasons.
The Standards Committee noted that the lawyer had also done nothing to help the client find a new lawyer. This was a breach of Rule 4.2.4, which required her to give the client reasonable assistance in this.
The Standards Committee found the lawyer guilty of unsatisfactory conduct. It censured her and ordered her to pay $500 in costs to the New Zealand Law Society.