Unsatisfactory conduct: Lawyer did not identify or record identity of client
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 768, 25 March 2011.
A Lawyers Standards Committee has said that lawyers have a duty to recognise for whom they are acting and to ensure that they record this in the relevant correspondence and files. They must assess who is the real client, regardless of the name under which a file might have been formally opened.
The complaint had been triggered by the lawyer refusing to provide former clients with their files and other documents. The lawyer had represented certain companies and two related individuals – a Mr A and his mother. The new lawyer for the companies and for Mr A’s mother asked the lawyer to provide the files, invoices and accounts for those former company clients and also any files in the name of the mother. The lawyer declined to provide the documents, saying the client had always been Mr A.
The Committee appointed an investigator to determine for whom the lawyer had, in fact, been acting. The investigator reported that although matters had been intermingled and conglomerated, it was clear that on some files the lawyer had been acting for one of the relevant companies and not any individual.
The Standards Committee found that the lawyer had not met his duties to recognise for whom he was acting and to record this clearly in correspondence. He should have recorded in the client files specifically who had given the instructions and by whom costs were payable.
The Committee said that lawyers must assess who in substance is the client, even if a firm’s policy is always to open files in the name of a natural person, as in this case. In particular, lawyers must establish whether they are advising directors independently of their companies.
The lawyer was found guilty of unsatisfactory conduct and fined $3,000. The Standards Committee also ordered him to pay the New Zealand Law Society $5,000 in costs.