New Zealand Law Society - Lawyer billed clients for work done after termination

Lawyer billed clients for work done after termination

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[Names used in this article are ficticious]

A lawyer who charged and deducted fees for work she did after her retainer was terminated engaged in unsatisfactory conduct, the Legal Complaints Review Officer (LCRO) has found.

In May 2015 the clients instructed the lawyer, Bertram, to act for them in the sale and purchase of properties.

By December 2015 the clients were committed to an unconditional agreement to sell their property, with settlement scheduled for 26 February 2016, but had not yet committed to a purchase.

The clients paid a deposit, via the real estate agent, into Bertram’s trust account.

On 29 January the clients phoned Bertram, and they arranged to meet on 4 February to discuss the next steps towards purchasing another property. The clients did not tell the lawyer whether they had lined up another property to buy.

On 3 February 2016 the clients terminated Bertram’s instructions , and instructed a new lawyer, Mr Jourdain.

On 22 February Bertram sent an email to Mr Jourdain’s office, attaching invoices for her fees. Bertram also attached a statement setting out the fees she had deducted from the clients’ money held in her trust account, before she had forwarded the balance to Mr Jourdain’s office on 17 February.

In its decision LCRO189/2016, the LCRO noted that a lawyers standards committee had found unsatisfactory conduct on Bertram’s part, because it had been unreasonable for her to charge a fee for work done after the clients had terminated the retainer.

Bertram had charged “in circumstances where her terms of engagement expressly stated that she would charge fees for work done prior to the termination of the retainer,” the LCRO said.

“In the circumstances, although [Bertram] had to undo the work she had done, setting up the e-dealing and giving undertakings to the bank, presumably on 4 February, she was contractually bound only to charge fees for work she did prior to the termination of the retainer.

“Her terms of engagement did not allow her to charge fees for anything after the retainer was terminated.”

The standards committee had calculated a reduction of $622 was appropriate, and certified a fair and reasonable fee for the services was $500.

“There is no good reason to depart from that view. The fee of $500 is confirmed as fair and reasonable for the services provided during the course of the retainer under that account. Bertram’s fees are otherwise confirmed as fair and reasonable,” the LCRO said.

The LCRO also ordered Bertram to pay $1,200 costs.

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