Unsatisfactory conduct. Paying client funds into personal account
This is a summary of a decision by a Lawyers Standards Committee under the Law Practitioners Act 1982. This summary was published in LawTalk 761, 1 November 2010.
A barrister was found guilty of unsatisfactory conduct after he deposited part of a client’s payment into his own account rather than a solicitor’s trust account. He was censured and ordered to pay costs.
The barrister had asked the client to pay him $10,000 to cover the cost of previous criminal work and as a retainer for work likely to be done in relation to new criminal charges. When the money had been delivered to his chambers, the barrister placed approximately $8,000 in his instructing solicitor’s trust account, and then deposited $2,000 into his own bank account, as part-payment for work he had already done for the client. However, the barrister had not rendered an invoice for the work. The funds were received by him on 27 June 2008 and only refunded to the client on 4 September 2008.
The case was decided under section 89(1) of the Law Practitioners Act 1982 (see now section 110 of the Lawyers and Conveyancers Act 2006). The Standards Committee said that, as a barrister, the lawyer was required by section 89(1) to pay the client funds he had received directly into his instructing solicitor’s account, and he was not entitled to pay the money to himself.
The Standards Committee said his conduct was unacceptable, measured against the standards of “competent, ethical and reasonable practitioners” (B v Medical Council [2005] 3 NZLR 810 at 811). The committee censured the barrister and ordered him to pay $750 in costs to the New Zealand Law Society.