New Zealand Law Society - Billing client after pro bono arrangement agreed

Billing client after pro bono arrangement agreed

A Standards Committee has found that a lawyer engaged in unsatisfactory conduct when he invoiced his client despite an agreement to work pro bono.  The Committee fined him $1,000 and ordered him to pay $500 in costs.

The client sought assistance from the lawyer in relation to her divorce proceedings and, because the lawyer thought she had been referred to him by a charitable trust, he agreed to act without charging. Despite the letter of engagement at the start of the retainer referring to fees being payable, separate communications between the lawyer and client confirmed the intention was that the work be done “free of cost”.

The lawyer subsequently found out that the client had not in fact been referred by the charitable trust. Further, relations between the lawyer and client deteriorated in other respects. The lawyer then withdrew from acting for the client and issued an invoice for what he described as a “highly discounted fee” of $1,500 “in order to stop her harassing him”.  

The Committee concluded that the lawyer had agreed to provide legal services to the client on a pro bono basis and that the client understood that was the case. It said that, if the lawyer then sought to alter that arrangement, he should have done so before undertaking further work and “certainly before issuing any invoices for those services”.

The Committee found that the lawyer had issued an invoice to the complainant for an improper purpose and in a context where there was a reasonable expectation that his legal services were being provided on a pro bono basis. It determined that his issuing of the invoice in those circumstances constituted unsatisfactory conduct under s 12(b) of the Lawyers and Conveyancers Act 2006. That subsection provides that unsatisfactory conduct includes conduct that (occurring at a time when the lawyer is providing regulated services) would be regarded by lawyers of good standing as being unacceptable (including conduct unbecoming a lawyer or unprofessional conduct).

When considering what orders to make, the Committee said it was “aware of the particular circumstances and challenges of the lawyer-client relationship in this case”. It said it “therefore did not consider that the conduct required the most serious penalty available to it”.  However, it did consider a penalty of some sort was required “to clearly show that the conduct…was unacceptable”. It then fined the lawyer $1,000 and ordered him to pay $500 towards costs.

The Committee also directed anonymised publication of a summary of its determination “to remind practitioners of their obligation to invoice clients appropriately”.

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