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Lawyers Complaints Service: Censured for failing to achieve enforceable agreement

22 November 2013

A lawyer, B, who failed to achieve either an enforceable agreement or file an application to make an order for costs that could be enforced, has been censured by a lawyers standards committee.

B assumed responsibility for civil proceedings issued by his client against another party. The client was partially successful with her claim and was awarded $8,000 damages.

In commenting on costs, the judge took the view the plaintiff (B’s client) would be entitled to some costs, but encouraged the parties to come to an agreement because of the amount involved. If that was not possible, leave was granted for the plaintiff to file and serve an application within 28 days.

B had discussions with the other party’s lawyer and considered he had reached an agreement that $8,000 would be paid, but the other party never confirmed that. The other party subsequently denied that an agreement on costs had been reached.

B’s client instructed a new solicitor to make an application to the court for a costs award, in accordance with the judgment. This was declined because it was too far out of time.

In the meantime, the client also applied to the Disputes Tribunal for a costs order on the basis that agreement had been reached. The referee found in the client’s favour and ordered the other party to pay $8,000 costs.

The other party successfully appealed that decision and the matter was referred back to the District Court for consideration. The judge declined to make any order for costs, on the basis the matter was res judicata and there was no basis to grant a re-hearing.

The standards committee found unsatisfactory conduct on B’s part for four reasons:

  • B failed, within the relevant time period, to either achieve an enforceable agreement or to file an application with the court to make an order for costs that could be enforced;
  • B, in providing regulated services to the client, had not always acted competently consistent with the terms of his retainer and the duty to take reasonable care, and was in breach of Conduct and Client Care Rule 3;
  • B’s conduct fell short of the standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent lawyer; and
  • B’s assertion that both the decision of the District Court allowing the appeal of the Disputes Tribunal decision and the decision not to grant costs were appealable were not relevant for the purposes of the committee’s determination of this complaint. Had B protected his client’s position in respect of costs by filing an application to the court within time, the complainant would not have needed to consider appealing.

As well as the censure, the standards committee ordered B to pay $750 costs.

The client unsuccessfully sought compensation in three areas: the costs allegedly agreed between B and opposing counsel; interest on the judgment of $8,000 and cost of instructing alternative counsel.

On the first area, the standards committee found that because B rendered a reduced fee, the client had not incurred any costs or suffered any loss as a result of B’s unsatisfactory conduct.

On the question of interest, the committee said it did not have any evidence which showed the client instructed D to enforce the judgment when payment was not made in full within 30 days of the decision date.

The committee also said it would be inappropriate to visit on B alternative counsel’s legal fees in circumstances where the client would have incurred additional costs to try to obtain a contribution towards her costs despite B’s actions.

The client applied to the Legal Complaints Review Officer (LCRO) for a review of the standards committee decision.

The LCRO upheld the committee’s determination that there had been unsatisfactory conduct, the censure order and the order that B pay the Law Society $70 costs.

However, it also ordered B to pay the client $1,257.20.

Part of this, $257.20, related to a fee payable to another firm the client had instructed. The total fees charged by this firm were $1,032.35.

“It needs to be remembered that if [B] had applied to the court for an order for costs, he too would have rendered accounts for those attendances,” the LCRO said. The bill relating to that should therefore be disregarded.

After the Disputes Tribunal award had been overturned, a second application was made to the court assisted by an application from B. The LCRO said that the client should be reimbursed for that amount of $257.20.

Although the client had not sought compensation for personal stress and anguish, she should not be deprived of payment because of that, the LCRO said.

“There is no doubt that [the client] had been put through additional stress and anguish by having to conduct a Disputes Tribunal hearing, and then by having that decision reviewed and overturned by a District Court and a second application to the court declined.

“In all of the circumstances, I consider that she should receive some payment in recognition of this, and consider that the sum of $1,000 is an appropriate amount,” the LCRO said.

Last updated on the 17th March 2016