Unsatisfactory conduct: Misleading use of lawyer’s letterhead
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 782, 7 October 2011.
A lawyer allowed his company client to issue a letter of demand using his letterhead and facsimile signature, despite the lawyer having no specific knowledge of the particular case. A Lawyers Standards Committee found the lawyer guilty of unsatisfactory conduct, fined him $1,500 and ordered him to pay $500 costs to the Law Society.
The complainant had received a letter stating that an outstanding debt had been referred to the lawyer for advice on whether to begin legal proceedings. The letter was on the lawyer’s letterhead and signed over the lawyer’s typed name.
According to the complainant, a bar code on the letter indicated that it had in fact been prepared by the lawyer’s debt-collector client, not by the lawyer himself.
The complainant suggested that the client be included as a party to the complaint proceedings, but the committee explained that this was not possible as the client was not a lawyer or incorporated law firm.
The lawyer told the committee the signature on this letter of demand was an electronic facsimile and that he permitted the client to use the signature only when certain criteria were met. Those criteria had been met in this instance, he said. His client had now stopped this practice after an internal procedural review.
The lawyer said he was a on a general retainer from the debt-collection company and was at their office regularly. He was responsible for training and overseeing their staff in preparing documents for court proceedings, and documents were prepared using templates that he had drafted and checked.
The committee said these letters of demand were clearly prepared by the client but that a reasonable person would have assumed they had originated from a lawyer who was acting on specific instructions about the particular dispute and with full knowledge of it.
The letters implied the lawyer had reviewed the relevant file and had formed a considered opinion as to whether court proceedings were advisable. In reality, however, it was unlikely the lawyer had given the files extensive scrutiny before the letters were sent, and therefore the letters amounted to misleading or deceptive conduct, in breach of Rule 11.1 of the Conduct and Client Care Rules.
The committee said that, by contrast, it would have been appropriate had the letters been issued by legal executives working in the lawyer’s own office and under his direct supervision.
The committee also noted a similar standards committee decision from October 2009 (see LawTalk 755, 2 August 2010, page 18).
That case had also involved a letter of demand sent by a debt-collection company on its lawyer’s letterhead without the lawyer having specific instructions and knowledge. In that case the lawyer had been ordered to stop the practice, and to pay $1,500 towards the complainant’s costs and $500 in costs to the Law Society.