A Standards Committee has determined that a lawyer’s conduct was unsatisfactory when he filed submissions alleging his client had causes of action in fraud and deceit, later accepting that he should have tested and reviewed the information provided by his client. The lawyer had breached one of his duties as an officer of the court. The Committee censured the lawyer and fined him $3,000.
The lawyer, Mr L, filed and served a statement of claim in the District Court on behalf of his client against the complainant, Mr W, and a limited company. The defendants applied to have the claim struck out.
Mr L’s submissions in relation to the strikeout application alleged that his client had causes of action in “fraud, deceit, fiduciary relations, breaches of duty of care, breaches by failure to account among others”.
The Court struck out the claim, on the bases that no reasonable cause of action was disclosed and that it was time-barred. Further, the Court subsequently awarded costs to the defendants on an indemnity basis.
Mr W complained that the allegations were “highly distressing” and that it was inappropriate for an “unsubstantiated allegation” to be made in that way.
In response to the complaint, Mr L conceded that he had made an error (in not testing and assessing the information his client provided) and that he had breached Rules 13.8 and 13.8.1 of the Conduct and Client Rules. The duties set out in those particular Rules form part of the set of duties lawyers owe as officers of the court. In particular, Rule 13.8.1 provides that a lawyer must not be party to the filing of any document in court alleging "fraud, dishonesty…or other reprehensible conduct” unless the lawyer has taken appropriate steps to ensure that reasonable grounds for making the allegation exist.
The Committee agreed that Mr L had breached Rules 13.8 and 13.8.1.
In its determination it stated:
“The integrity of the adversarial judicial system depends on counsel advancing their client’s case fearlessly. However, this is not an absolute concept and counsel is not entitled to make scandalous allegations against others without any proper evidential foundation [referencing Orlov v New Zealand Law Society  3 NZLR 562 at ]. The emphasis of these Rules are not on the suppression of fearless advocacy, but on the need for a proper evidential foundation before harmful allegations are made about others. It applies equally to courtroom advocacy as it does to the content of documents in court proceedings.”
Rule 13.8 sets out the duty of a lawyer engaged in litigation to refrain from attacking the reputation of another person without good cause. The Committee said that duty has been explained by courts in terms of abuse of the lawyer’s professional status and the privileges associated with that status.
The Committee said:
“A lawyer who is acutely aware of their professional obligations must necessarily satisfy themselves that reasonable grounds exist before making an allegation of deceit and/or fraud.”
The Committee determined that Mr L’s breaches of the Rules amounted to unsatisfactory conduct. The Committee ordered the lawyer to be censured, fined $3,000 and to pay costs of $1,500.