New Zealand Law Society

Navigation menu

Censured for failing to confirm instructions

05 March 2018

[Names used in this article are ficticious]

A lawyer who failed to ensure that he was doing what his clients had in mind has been censured by a lawyers standards committee.

The Legal Complaints Review Officer (LCRO), in LCRO 234/2014, said he agreed with the committee’s finding of unsatisfactory conduct by the lawyer, Glansdale, and that the finding must stand.

Glansdale met the clients, Mr and Mrs Seacoal, for one hour in June 2012.

Mr and Mrs Seacoal both had previous marriages and had – before they married – established trusts with a view to ensuring their assets would be protected for the children of those marriages.

During their relationship, Mr and Mrs Seacoal acquired further assets. They instructed a solicitor to form a third trust as a vehicle for managing their jointly acquired assets. It was anticipated that the couple’s five children would share equally in the assets of this third trust when it was wound up.

The couple’s instructions to form this third trust were not carried out by their former lawyer. At the June 2012 meeting, Glansdale and Mr and Mrs Seacoal discussed ways to resolve the problem.

Documentation forwarded

The following month, Glansdale forwarded a substantial amount of documentation to Mr and Mrs Seacoal. He said he understood his instructions to be a complete overhaul of the couple’s financial arrangements, with a view to transferring the assets of the existing trusts into a newly-created trust.

More correspondence followed, and no concern was raised until Mr and Mrs Seacoal wrote to Glansdale in November 2012, saying they were unhappy with the proposed arrangements. Mrs Seacoal said they considered their financial positions could be properly protected by preservation of the existing trusts and the creation of a viable third trust.

Glansdale replied, addressing the points raised, and raising the issue of fees. Glansdale said his normal fee for the work to date would be $15,000 plus GST, but an invoice did not accompany the letter.

Further correspondence followed, including a letter in March 2013, attaching an account for $17,489 plus GST and a disbursement of $20 – a total of $20,132.

In April 2013, in a letter headed “Complaint”, Mr and Mrs Seacoal identified two issues:

  • Fees “which [are] significantly in excess of our expectation”, and
  • That “we do not have anything that we instructed, wanted, or in a form we are likely to use”.

The complaint arose because Mr and Mrs [Seacoal] asserted that [Glansdale] did not carry out their instructions, the LCRO said.

“That issue is more properly framed as whether [Glansdale] took steps to confirm his instructions and Mr and Mrs [Seacoal]’s understanding of those instructions.”

Breach of rule 7.1

Glansdale had not done this, breaching rule 7.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (RCCC) the LCRO said.

Rule 7.1 reads: “A lawyer must take reasonable steps to ensure that a client understands the nature of the retainer and must keep the client informed about progress on the retainer. A lawyer must also consult the client ... about the steps to be taken to implement the client’s instructions.”

Rule 3.4 of the RCCC requires lawyers to “in advance, provide a client with information in writing on the principal aspects of client service ...”

“I conclude that [Glansdale] breached both rule 3.4 and 7.1 by his failure to provide sufficiently detailed information about the nature of his retainer, ensuring that Mr and Mrs [Seacoal] understood what he was proposing to do on their behalf,” the LCRO said.

The issue of whether Glansdale’s fees were fair and reasonable was “directly linked to the issue of his instructions”.

He did not provide an estimate, despite being asked for one on 28 June 2012. Glansdale’s failure to properly explain the steps he was taking also affected the issue of whether his fees were fair and reasonable. This was a breach of r 9.4 of the RCCC.

Fair and reasonable fee

The standards committee determined that a fair and reasonable fee was $646 plus GST and disbursements (of $20).

“I have come to the same conclusion as the committee about the scope of [Glansdale]’s retainer.

“[Glansdale]’s work was undoubtedly competent, thorough and comprehensive. He was efficient and prompt. However, by his enthusiasm and diligence [Glansdale] omitted the key step of ensuring that he was doing what Mr and Mrs [Seacoal] had in mind, and that they understood what he was doing.

“It was optimistic for [Glansdale] to expect that he could embark upon this sophisticated restructuring exercise on the back of a single one-hour meeting.

“The committee’s basis for reducing the fee to the amount that it did is principled and I can find no fault with it,” the LCRO said.

Last updated on the 5th March 2018