Unsatisfactory conduct: Long delay providing terms of engagement

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 783, 21 October 2011.

A three-month delay in providing a letter of engagement resulted in a $1,000 fine for an Auckland lawyer when a Lawyers Standards Committee found her guilty of unsatisfactory conduct.

The lawyer had carried out a range of significant work on the case before providing the necessary information.

The client first contacted the lawyer on 21 May 2009, asking the lawyer to look over some material relating to the client’s relationship property case. The client said the lawyer agreed to review the material for a $600 flat fee, and the charges after that were to be $350 per hour, plus GST and disbursements. 

They met in person six days later, with the client signing an authority for her files to be uplifted from her previous lawyer. Over the next few weeks, the lawyer progressed the case, including drafting a settlement offer.

It was not until 27 August, three months after she began acting for the client, that the lawyer provided her terms of engagement, attaching it to her first invoice. The client told the committee it was only at this point that she became aware the lawyer was charging an hourly rate of $375 plus GST, not $350 plus GST. 

The lawyer acknowledged not having provided her terms of engagement immediately, but said she had rectified this as soon as she realised it had not been done. She also told the committee she couldn’t recall the initial discussions about her charge-out rate, but said the terms of engagement set out her standard rate. 

The committee found that the lawyer’s delay was unacceptable.

Lawyers have a general obligation to their clients under the Conduct and Client Care Rules to always act in a timely manner (Rule 3). More specifically, they must provide clients in advance with written information on the principal aspects of client service, including the basis on which fees will be charged (Rule 3.4). 

Before carrying out significant work a lawyer must also provide the client with a copy of the client care and service information set out in the Preface to the Rules, along with other specified information (Rule 3.5). 

As well as finding the lawyer guilty and fining her $1,000, the committee ordered her to pay $500 costs to the Law Society. 

© New Zealand Law Society 2008