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Trust account breaches

17 May 2017

A lawyer, K, has been censured and fined $1,000 by the Legal Complaints Review Officer (LCRO) for a series of breaches relating to the operation of his trust account.

When a lawyers standards committee considered the breaches, it determined that the matter be referred to the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.

K applied to the LCRO for a review of the committee’s decision. Following that, K’s counsel and Counsel for Committee invited the LCRO to make orders by consent. Those orders included a finding of unsatisfactory conduct rather than referral to the Tribunal.

Charges faced

The charges K faced followed a report from a Law Society inspector. The report identified that K had:

  • Charged agency fees in transactions where he had not employed an agent;
  • Made payments for personal matters from his trust account ledger (no client funds were used for these payments);
  • Dormant balances in his firm’s accounts;
  • Not provided engagement letters in two matters; and
  • Paid funds into a client’s bank account without verifying the account with his client before making payments.

LCRO decision

In LCRO 267/2016, the LCRO said he had carefully considered all the available material before deciding to make the consent orders sought.

This included the fact that:

  • K’s career had been lengthy and he was soon to retire from practising law;
  • K was no longer a sole practitioner;
  • K no longer had responsibility for a trust account;
  • K’s errors were oversight and lack of attentiveness rather than deliberate or intentional; and
  • The committee had reconsidered its decision to refer the matter to the Tribunal after careful consideration and with the approval of the Law Society’s National Prosecutions Manager.

K had accepted responsibility for the deficiencies in the management of his trust account, and had accepted the appropriateness of an unsatisfactory conduct finding being made, the LCRO said.

“I accept the submissions advanced by counsel for the committee, that the outcome proposed presents as being in line with what the Tribunal may well have concluded was an appropriate finding.”

As well as the censure and fine, the LCRO made a finding of unsatisfactory conduct, ordered K to pay $2,000 standards committee costs and $1,200 LCRO costs, and ordered publication of the facts of the complaint, but not K’s name.

Last updated on the 30th June 2017