New Zealand Law Society - Contested litigation - no negligence found

Contested litigation - no negligence found

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The High Court has upheld an appeal by Papali’i Toti Lagolago, lawyer, against the findings of the New Zealand Lawyers and Conveyancers Disciplinary Tribunal ([2016] NZHC 2867).

In [2015] NZLCDT 25, the Tribunal found Ms Lagolago had been negligent or incompetent in her professional capacity of such a degree as to bring her profession into disrepute. The Tribunal considered that if it was wrong in making that finding, an alternative charge of unsatisfactory conduct had been proven.

The charges arose when Ms Lagolago was acting for Mr and Mrs F in civil proceedings in the District Court over a debt they owed to a finance company. Mr and Mrs F ultimately faced a District Court costs order significantly greater than the original debt amount under dispute and which could have been resolved in the Disputes Tribunal.

The charges related, among other things, to the standard of her advice to the client on settlement proposals offered, the likelihood of success and risks in litigation with the finance company, and her conduct in the resulting case. The District Court Judge hearing the case was “strongly critical” of Ms Lagolago’s representation and conduct in his decisions on the merits and a later costs application. The Judge also said, however, he was satisfied that the couple and their counsel were acting in good faith.

In [2015] NZLCDT 43, the Tribunal censured Mrs Lagolago, ordered her to be mentored by a senior lawyer for 12 months, to pay the New Zealand Law Society $12,000 costs, to reimburse hearing costs of $16,514 and to reduce her legal fees to Mr and Mrs F by $14,000.

Appeal to High Court

Ms Lagolago appealed the Tribunal’s decision to the High Court, arguing that the Tribunal erred in fact and law in reaching its conclusions.

Justice Clifford said the question was whether the Tribunal was right to find that, on an objective assessment of how the public would view the lawyer’s conduct, the profession would be brought into disrepute. The rarity of a finding of negligence in the context of contested litigation was noted. The Court found that Ms Lagolago was “well aware of the difficulties with the substance of the claim Mrs F wished to bring”.

He said that given Mrs F’s determination to have her day in court, Ms Lagolago went to considerable efforts to point that out to Mrs F. “She would appear, however, to have also been sensitive to Mrs F’s right to bring the claim in Court.”

Failure of degree rather than kind

Noting that Ms Lagolago was not an experienced litigator, Justice Clifford said that any failure [on her part] was one of degree rather than kind. “I have considerable reservation as to whether or not that failure was negligence, calling for a disciplinary response.”

Also of relevance, Justice Clifford said, “is the need for lawyers to act on a hopeless case, providing such a case is not an abuse of process. Ms Lagolago was, objectively, being asked to undertake something which, if it was not a hopeless case absolutely, was certainly approaching that position.

“Unless a claim is totally groundless, the lawyer has no defensible ground for refusing to act. Otherwise the lawyer is herself acting as the judge of the case,” he said, quoting the Privy Council in Harley v McDonald [2002] 1 NZLR 1 that: “the public interest requires that the doors of the court remain open”.

Neither was the High Court satisfied that the alternative charge of unsatisfactory conduct had been made out. “I am not persuaded that, as the Tribunal appears to argue, it is self-evident that Ms Lagolago was guilty of unsatisfactory conduct.”

In allowing Ms Lagolago’s appeal, the court quashed the censure and costs orders. In relation to the order that Ms Lagolago reduce her fee to her clients by $14,000, “in the circumstances, I do not think it would be appropriate for Ms Lagolago to now claim an entitlement to pursue her full bill of costs against the Fs,” Justice Clifford said.

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