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Instructing solicitors have obligations to the court

An instructing solicitor, A, who was party to filing a claim alleging deceit without satisfying himself of the propriety and viability of the pleaded claims has been censured and fined $2,500 by a lawyers standards committee.

Before the investigation of the complaint, the standards committee asked A, as instructing solicitor, for an explanation of the factual basis of the tort pleaded. A replied that he had “deferred to the expertise” of the barrister.

After receiving this reply, the standards committee decided to commence an own motion investigation to determine whether A had breached rule 13.8.

Rule 13.8 provides that a lawyer engaged in litigation must not attack a person’s reputation without good cause in court or in documents filed in the proceedings. Rule 13.8.1 specifies that a lawyer must not be a party to the filing of any document in court alleging fraud, dishonesty, undue influence, duress, or other reprehensible conduct, unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist.

In finding A guilty of unsatisfactory conduct, the standards committee considered he had breached his obligation to the court (Rule 13) by contravening rules 13.8 and 13.8.1 of the RCCC.

The committee noted that according to the commentary on pleading claims in McGechan on Procedure (High Court Rules 5.26.08 (1)), the requirement to plead fraud with clarity and particularity is a “well-recognised rule of practice” and that “advancing a plea of fraud imposes a heavy ethical responsibility that is discharged only if the practitioner is in possession of material that establishes a prima facie case of fraud”.

A submitted, however, that acting as a solicitor bystander was sufficient to satisfy his ethical obligations: “The instructing of counsel and, as a corollary, our reliance on the expertise of counsel to advise both us and our clients on the appropriate course of action is, we believe, consistent with our obligations towards our clients and New Zealand Law Society in acting only in matters in which we have sufficient expertise.”

The committee said it disagreed.

Commentary to the High Court Rules “emphasises the responsibility of the solicitor on the record to the court for the pleading; the solicitor on the record must satisfy himself or herself about the propriety and viability of the pleaded claims”.

“By his own admission, [A] did not review the Notice of Claim prior to it being filed with his authority. The failure to do so meant that [A] did not discharge his obligations as the solicitor on the record.

“His responsibility to the court for the pleading and his obligations under rule 13.8 of the RCCC meant that he was required to do so.

“At a minimum, a solicitor on the record must review the claim to be filed to satisfy himself there is a proper basis for each pleading,” the committee said.

A also submitted that the contract spoke for itself and that the defendant made a fraudulent representation that the work could be completed by a certain date, knowing it could not, to induce the plaintiff to enter into the contract.

The committee said that what was missing were reasonable grounds for alleging prior impossibility of performance and prior knowledge of that impossibility.

A further submitted that the deceit plea was made on client instruction. “A lawyer is expected to test a client’s subjective beliefs and advance an allegation of deceit only if there are reasonable grounds to support it,” the committee said.

As well as the censure and fine, the committee ordered A to pay $1,000 costs.

Last updated on the 3rd June 2015