Dolan, Michael --- "Communication and undertakings" [2014] PrecedentAULA 35; (2014) 123 Precedent 31

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Communication and undertakings

By Michael Dolan

The heart of every legal practice is communication, and keeping promises, or undertakings, is its backbone. Everything a solicitor does revolves around communication, while, as officers of the court, practitioners have a professional duty to honour an undertaking once given.

COMMUNICATION

The first part of this article explores some common areas of communication in legal practice in respect of which a solicitor must be careful to ensure that no breach of their ethical obligations occurs.

Taking instructions from a client or prospective client, conducting a client matter, giving legal advice (oral and written), preparing contracts and other legal documents, briefing counsel, drafting statements of claim, defences, and other pleadings, making submissions, and appearing in courts and tribunals on behalf of clients all involve communication.

Communication can be good, bad, poor, or non-existent. It is at the centre of the solicitor–client relationship. Many complaints to regulators about solicitors’ conduct are made because of poor or unclear communication.

Ethical practice is the bedrock for every solicitor. As the President of the Victorian Court of Appeal, Justice Chris Maxwell, has said about legal practice: ‘If it can’t be done ethically, then it can’t be done.’^[1]

Therefore, all of a solicitor’s communications must be ethical. For example, a solicitor must never knowingly mislead a court or another solicitor. A solicitor must never communicate directly with the client of another solicitor except in certain tightly regulated circumstances.

Civility and courteousness

Solicitors’ professional conduct and practice rules require them to be courteous.^[2] It may seem surprising that solicitors need a professional conduct rule requiring them to be courteous in the course of legal practice. However, on 6 November 2013 the Victorian Legal Services Commissioner, Michael McGarvie, felt he needed to remind solicitors to ‘Play the ball, not your opponent!’^[3]

He pointed out that his office had been receiving an increasing number of complaints about solicitors using aggressive language when communicating with other solicitors. He wrote:

‘The aggressive and personal tone of interactions between lawyers evident in these complaints demonstrates professional conduct which falls far short of the standard expected of members of our profession, and is of significant concern to the regulator.’^[4]

On the other side of the Pacific, a United States law firm described what it saw as some causes of discourtesy or incivility in the legal profession:

• increased competition due to the growth of the profession;

• adversarial legal system;

• poorly prepared law school graduates;

• a client’s desire for a combative lawyer;

• the misperception that courtesy shows weakness;

• pressures caused by ‘the billable hour’; and

• the growing impression that Law is a business rather than a profession.^[5]

A lack of courtesy in correspondence last year caught out a firm of solicitors in the Federal Court of Australia.^[6] In the course of vigorous winding-up litigation the firm wrote to the other side in these terms:

‘First, the first paragraph of your letter is a false assertion... Secondly, such a ground of defence to the winding-up application would be absurd... Fourthly, the attack on [the liquidator’s] independence is equally absurd... The proposition in your letter [is] as specious as the proposition... The attack on [the liquidator’s] reputation is as egregious as the unfounded allegations of fraud and perjury you and your Counsel instructed by you have made against Mr N... Fifthly, the vast bulk of the evidence... is nothing short of a gross abuse of process...’^[7]

The trial judge remarked that the manner and tone of the letter were wholly inappropriate for the conduct of civil litigation in any court. After citing NSW professional conduct and practice rules requiring lawyers to be courteous with each other, the judge remarked that:

‘The professional conduct rules reflect the need for litigation to be conducted by officers of the Court in an adult fashion. It is not adult for grown lawyers to accuse each other of lying in correspondence and it is not edifying for anyone involved. Correspondence of this kind ought not to be tolerated... I should say for the benefit of the solicitor for Mr K that I have detected not the slightest behavior on her part to deserve the opprobrium poured upon her.’^[8]

These judicial remarks are a timely reminder of all lawyers’ ethical obligations as officers of the court to be courteous in all of their professional dealings, especially with other lawyers.

A few years ago in Queensland there was an example of poor correspondence by a solicitor which resulted in a formal reprimand.^[9] An experienced solicitor who had been practising for more than 30 years was acting for a husband in a bitterly contested family law matter. In a letter to his opponent the solicitor wrote:

‘I have advised my client to instruct me not to respond to any more of your correspondence. It just seems to me that every time you have got no work to do you return to [the wife’s] file because there is plenty of money there to pay your legal fees...

The children’s issues are never going to be resolved at the mediation. The likelihood is that your client and her family have done so much damage to [the child] that my client will never have a meaningful relationship with his daughter. Your client will live to regret that in the future, when [the child] grows up and becomes as dysfunctional as your client is.’^[10]

The solicitor had subsequently expressed regret for the language used, and had written letters of apology both to his opponent and her client, but in convicting the solicitor of unsatisfactory professional conduct, the Queensland Civil and Administrative Tribunal described the language used as ‘intemperate, inappropriate, and discourteous, and in some respects offensive.’^[11]

The lesson to be learnt from this and similar cases is that whenever a solicitor feels tempted to write a fiery letter or engage in any kind of communication of that nature, the best thing to do is not to send the letter or despatch the communication on the same day, and preferably have it peer-reviewed by a trusted colleague before sending it.

Failure to communicate

Communication can land a solicitor in disciplinary hot water, but failure to communicate can do so too. Professional conduct and practice rules require legal work to be carried out with expedition.^[12]

Early last year, a solicitor incurred disciplinary sanction because he had missed a crucial date for a client, and then prevaricated for some years while he decided what to do about it.^[13] It is an example of a solicitor placing a task in the ‘too hard basket.’

In 2002, the solicitor had been instructed to effect a subdivision of a suburban lot into two, and then transfer one of those lots to other members of the transferor’s family – a simple and then non-dutiable transaction, as the transfer was to be made in consideration of marriage.

By the middle of 2008 (some six years later) the solicitor had still not effected the transfer. This was because he had, through his various delays, failed to do so prior to the repeal of s43(1) of the Duties Act 2000 (Vic), which meant that the parties had become liable for stamp duty on the transfer.

The solicitor pleaded guilty to two charges of professional misconduct for failing to use his best endeavours to effect a transfer of the property, and failing to communicate effectively and promptly with his clients concerning the transfer of land, in breach of the conduct rules referred to above.

The solicitor accepted that his conduct had involved ‘a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence’.^[14]

Ethical use of social media

The ever-increasing use of social media by society at large has brought about a new set of communication and ethical challenges for all lawyers.

In 2011, the International Bar Association (IBA) surveyed its members, asking whether they thought they needed ethical guidance in the area of social media. More than 80 per cent of respondents gave a positive answer to this question, and more than 90 per cent said they wanted to receive such guidance from either the IBA or their local law society.

At the end of 2012, the Law Institute of Victoria published guidelines on the ethical use of social media.^[15] The introduction to the guideline document reads:

‘Social media presents both opportunities and challenges for legal practitioners. Various articles have discussed some of those opportunities. The purpose of this guideline is to assist practitioners in addressing some of these challenges.’^[16]

Some of the ethical challenges for lawyers in social media include the dangers of breaching the duty of confidentiality, inadvertently establishing a solicitor and client retainer, breaching the solicitor’s duty to the administration of justice, and breaching the no contact rule.

Similar guidelines on social media have been published by the Law Society of England and Wales^[17] and the Law Society of Scotland.^[18]

The no contact rule

There has long been an ethical prohibition on a solicitor contacting the client of another solicitor directly without the express permission of that solicitor or the existence of very urgent circumstances. Such a prohibition is now contained in professional conduct and practice rules.^[19]

Last year, the Victorian Legal Services Commissioner prosecuted a solicitor successfully for a glaring breach of the no contact rule.^[20]

The solicitor was a respected leader in his ethnic community. Other community leaders often sought advice from him. However, the solicitor fell into the trap of succumbing to pressure from community leaders to meet with them and a child in a protection matter at the solicitor’s office without the child’s court-appointed solicitor being present.

The Children’s Court made a complaint to the Legal Services Commissioner and the solicitor was convicted of professional misconduct. As a result, his practising certificate was cancelled for a year. The Supreme Court of Victoria refused the solicitor leave to appeal from the disciplinary tribunal’s decision.^[21]

This was a sad case because the solicitor was well respected in his community, and was a person to whom members of his community could approach for advice and assistance. However, the solicitor’s conduct was a serious breach of the no contact rule.

Media contact by solicitors

In the 24/7 media cycle of the 21^st century, considerable interest is often shown by the media in proceedings in the courts, or in legal matters generally.

In terms of communication, what ethical restrictions are there on what solicitors may or may not do in dealings with the media?

In Victoria, there is no general prohibition against solicitors speaking with, or being interviewed by, representatives of the media. However, there are professional conduct rules for solicitors dealing with some aspects of the issue.^[22]

A leading Australian legal academic has written on the topic in these terms:

‘The extent to which lawyers’ freedom of speech should be curtailed in making out-of-court media communications, or in conference addresses, remains the subject of debate. Restrictions on those communications... seek to balance... three interests: the interest of the public and the media in accessing facts and opinions about litigation; the interest of litigants in placing a legal dispute before the public or in countering adverse publicity about the matter; and the interest of the public and opposing parties in ensuring that the process of adjudication is not distorted by statements carried in the media. It is in the context of lawyers commenting on cases in which they are, or have been, involved that the balancing of these interests has proven most challenging of late...

Ultimately, lawyers must appreciate the dangers of making public and media comment on cases. Blanket prohibitions leave little scope for professional judgement on occasions where comment is legitimate. The consequences of public comment may not all be negative.’ ^[23]

It goes without saying that any public comments made by a solicitor to the media or in any public forum must not breach client confidentiality, be inaccurate or misleading, or be in breach of the solicitor’s duty to the court and to the administration of justice. At all times, extreme care should be exercised by solicitors when dealing with the media.

UNDERTAKINGS

‘An undertaking is a promise to do something, or not do something, and the recipient is entitled to rely on it. As officers of the court, practitioners have a professional duty to honour an undertaking once given. Breach of an undertaking by a solicitor is regarded by courts and tribunals as an extremely serious matter, and in some instances may result in a civil contempt of court, or a finding of professional misconduct or unsatisfactory professional conduct.’^[24]

Undertakings and the professional conduct rules

Professional conduct and practice rules deal with undertakings.^[25]

The Victorian rule has been described judicially in these terms:

‘An undertaking is not something given lightly. It is a personal promise by a legal practitioner and it is a mechanism whereby practical courses of action can be taken based upon the reliance by one legal practitioner upon the undertaking of another that the contents of that undertaking will be observed... strictly. If there was not such a requirement there would be a breakdown in what is a very important mechanism employed by members of the legal profession. The breach of an undertaking strikes at the heart of such a system.’^[26]

In that case, a client changed solicitors. The new solicitor provided a client authority to hand over documents. The former solicitor was owed professional fees. The new solicitor wrote to the former solicitor and said: ‘In return of the documents we undertake to pay your costs and we will be sending a courier to collect the documents at 3:00pm’ (emphasis added).^[27] The documents were handed over to the new solicitor in reliance upon the undertaking. The fees remained unpaid for seven months. The new solicitor was prosecuted and the disciplinary tribunal made a finding of professional misconduct, with a reprimand and costs order.

Important points to note about undertakings

Both the Victorian conduct rules and the Australian Solicitors’ Conduct Rules provide that a solicitor must not give to another solicitor an undertaking, compliance with which requires the co-operation of a third party who is not a party to the undertaking and whose co-operation cannot be guaranteed by the solicitor giving the undertaking.

‘There is no question that undertakings between solicitors are sacrosanct. They facilitate efficient dealings between parties where the interests of one party may be advanced without prejudice to the interests of another party. Rule 22.1 is worded in uncompromising terms. An undertaking must be honoured strictly in accordance with its terms. Rule 22.1 reinforces the integrity of an undertaking by directing a practitioner not to give another practitioner an undertaking where compliance may rely upon a third party whose cooperation cannot be guaranteed.’^[28]

For example, if a solicitor attends a settlement and a bank document is missing, the solicitor should not undertake to provide to another solicitor or third party the missing document when the solicitor has obtained it from the bank. It may be that the bank will fail or refuse to provide the document to the solicitor who will then be in breach of the undertaking. On the other hand, if the missing document is in the solicitor’s possession and control, for instance at their office, then the solicitor would be able to give such an undertaking in order to enable the settlement to proceed.

Similarly, a solicitor should never give a personal undertaking that their client will do or refrain from doing something. Clients can and do change their minds for good or bad reasons. In the case of an undertaking given on behalf of a client, it must be made very clear to the person receiving the undertaking that it is the client’s undertaking and not that of the solicitor. In that regard, such an undertaking should only ever be given in writing in clear and unambiguous terms.

The Victorian conduct rules further provide that an undertaking given by an employee of a solicitor is deemed to be a personal undertaking by the solicitor unless the employee, if a solicitor, makes expressly clear that the undertaking is the employee solicitor’s personal undertaking and not that of the employer. For this reason many firms of solicitors will only allow undertakings to be given by a partner of the firm.

An undertaking given by one partner in a law firm will bind all partners in the firm. It is wise, therefore, for law firms to have in place written policies dealing with the giving of undertakings.

If a personal undertaking is given by a solicitor, it should be expressed in clear and unambiguous terms and it is advisable to keep within the firm a central record of all undertakings given, as well as keeping a record on the individual client file.

The Victorian conduct rules also provide that a solicitor must not seek from another solicitor (or his or her employee) an undertaking, compliance with which would require the co-operation of a third party who is not a party to the undertaking and whose co-operation cannot be guaranteed.

‘Traditionally the courts have exercised jurisdiction to enforce undertakings given by lawyers as part of the inherent jurisdiction to ensure that lawyers, as officers of the court, observe a high standard of conduct. For this reason it is very important when giving an undertaking to be clear as to whether it is the lawyer’s personal undertaking or is given on behalf of the client. Unless it is abundantly clear that the undertaking is not given as a personal undertaking it is likely to be construed as a personal undertaking. Strict compliance with a personal undertaking is insisted upon.’^[29]

The Victorian conduct rules also provide for the same strict compliance principles outlined above in relation to undertakings being given to solicitors to apply to undertakings given to third parties.

Finally, the word ‘undertaking’ does not have to be used for a promise made by a solicitor to be enforced as an undertaking.^[30]

The key message is that solicitors and their staff should be extremely careful when asking for, and giving undertakings to, other solicitors and third parties. The law expects strict compliance with undertakings by solicitors and members of their staff and any breach of an undertaking can have extremely serious consequences including adverse disciplinary findings for a solicitor.

Undertakings are an extremely important part of legal practice. They should never be sought or given lightly. They should always be expressed in clear and unambiguous terms. Any breach of an undertaking can have extremely serious consequences for a solicitor or a law firm.

The Law Institute of Victoria has recently published an ethics guideline about undertakings.^[31]

Michael Dolan is Acting Manager, Ethics Department of the Law Institute of Victoria. He is an experienced litigation solicitor who has practised in the city and country and as in-house counsel. PHONE [phone] EMAIL [e-mail].

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^[1] Address to Law Institute of Victoria Ethics Liaison Group on 25^th July 2012

^[2] In Victoria, Rule 21.1 of the Professional Conduct and Practice Rules 2005 provides: ‘A practitioner, in all of the practitioner’s dealings with other practitioners, must take all reasonable care to maintain the integrity and reputation of the legal profession by ensuring that the practitioner’s communications are courteous and that the practitioner avoids offensive or provocative language or conduct.’ Rule 4.1.2 of the Australian Solicitors’ Conduct Rules which now apply in South Australia, Queensland, and NSW and are expected to be promulgated in Victoria by the Legal Services Board at some time within the next year provides: ‘A solicitor must be honest and courteous in all dealings in the course of legal practice.’

^[3] Michael McGarvie ,Victorian Legal Services Commissioner, RPA Alert 6, November 2013.

^[4] Ibid.

^[5] Transactional Lawyers Behaving Badly – Ethics, Civility and the Modern Day Lawyer, Nixon Peabody, October 2013.

^[6] Ren Nominees Pty Ltd v MS Cognosis Pty Limited (No. 1) (2013) FCA 916 (11 September 2013) per Perram J

^[7] Ibid at [52].

^[8] Ibid at [55].

^[9] Legal Services Commissioner v Cooper (2011) QCAT 209

^[10] Ibid at [4]–[5].

^[11] Ibid at [19].

^[12] In Victoria, Rule 1.2 of the Professional Conduct and Practice Rules 2005 provides: ‘Expedition: A practitioner must, in the course of engaging in legal practice, use the practitioner’s best endeavours to complete legal work as soon as reasonably possible.’ Rule 39.1 provides: ‘Communication with clients: A practitioner, in the course of engaging in legal practice, must communicate effectively and promptly with clients of the practitioner.’ Rule 4.1.3 of the Australian Solicitors’ Conduct Rules provides: ‘A solicitor must deliver legal services competently, diligently, and as promptly as reasonably possible.’

^[13] Legal Services Commissioner v Galatas (Legal Practice) [2013] VCAT 214

^[14] Ibid at [11].

^[15] Guidelines on the Ethical Use of Social Media, Law Institute of Victoria, 29^th November 2012, <www.liv.asn.au/PDF/For-Lawyers/Ethics/2012Guidelines-on-the-Ethical-Use-of-Social-Media.aspx>.

^[16] Ibid, p1.

^[17] Practice Note on Social Media, Law Society of England and Wales, 20^th December 2011, <www.lawsociety.org.uk/advice/practice-notes/social-media>.

^[18] Social Media – Advice and Information for the Legal Profession, Law Society of Scotland, <www.lawscot.org.uk/rules-and-guidance>, search for ‘social media’.

^[19] For example, Rule 33 of the Australian Solicitors’ Conduct Rules provides: ‘33 Communication with another solicitor’s client 33.1 A solicitor must not deal directly with the client or clients of another practitioner unless: 33.1.1 the other practitioner has previously consented; 33.1.2 the solicitor believes on reasonable grounds that:(i) the circumstances are so urgent as to require the solicitor to do so; and (ii) the dealing would not be unfair to the opponent’s client; 33.1.3 the substance of the dealing is solely to enquire whether the other party or parties to a matter are represented and, if so, by whom; or 33.1.4 there is notice of the solicitor’s intention to communicate with the other party or parties, but the other practitioner has failed, after a reasonable time, to reply and there is a reasonable basis for proceeding with contact.’ In Victoria, Rule 18.4 of the Professional Conduct and Practice Rules 2005 provides: ‘A practitioner must not deal directly with the opponent’s client in relation to the case for which the opponent is instructed unless: 18.4.1 the opponent has previously consented; 18.4.2 the practitioner believes on reasonable grounds that: (a) the circumstances are so urgent as to require the practitioner to do so; and (b) the dealing would not be unfair to the opponent’s client; or 18.4.3 the substance of the dealing is solely to enquire whether the person is represented and, if so, by whom.’

^[20] Legal Services Commissioner v Tuferu (Legal Practice) (2013) VCAT 1438.

^[21] Tuferu v Legal Services Commissioner (2013) VSC 645.

^[22] In Victoria, Rule 19.1 of the Professional Conduct and Practice Rules 2005 provides): ‘A practitioner must not publish or take steps towards the publication of any material concerning current proceedings for which the practitioner is engaged which may prejudice a fair trial of those proceedings or prejudice the administration of justice.’ Rule 28 of the Australian Solicitors’ Conduct Rules provides: ‘28 Public comment during current proceedings 28.1 A solicitor must not publish or take steps towards the publication of any material concerning current proceedings which may prejudice a fair trial or the administration of justice.’

^[23] Gino Dal Pont, Lawyers’ Professional Responsibility, (5^th edition) Thomson Reuters, 2013 at paras. 17.190 and 17.200.

^[24] Law Institute of Victoria, Undertakings Guideline, 30^th January 2014, <ww.liv.asn.au/PDF/For-Lawyers/Ethics/2014-Guidelines-on-Undertakings>.

^[25] In Victoria, the Professional Conduct and Practice Rules 2005 provide: ‘22.1 A practitioner who, in the course of the practitioner’s practice, communicates with another practitioner orally, or in writing, in terms which, expressly, or by necessary implication, constitute an undertaking on the part of the practitioner personally to ensure the performance of some action or obligation, must honour the undertaking so given strictly in accordance with its terms, and within the time promised (if any) or within a reasonable time.’ Rule 6 of the Australian Solicitors’ Conduct Rules provides: ‘6 Undertakings 6.1 A solicitor who has given an undertaking in the course of legal practice must honour that undertaking and ensure the timely and effective performance of the undertaking, unless released by the recipient or by a court of competent jurisdiction.6.2 A solicitor must not seek from another solicitor, or that solicitor’s employee, associate, or agent, undertakings in respect of a matter, that would require the co-operation of a third party who is not party to the undertaking.’

^[26] Legal Services Commissioner v Sapountzis (Legal Practice) (2010) VCAT 1124, at [17].

^[27] Ibid at [4].

^[28] Legal Services Commissioner v Kaine (Legal Practice) [2013] VCAT 1077 at [52].

^[29] David Bailey, Undertakings by lawyers: content and consequences, Barrister-at-Law, 18^th October 2012

^[30] Legal Service Commissioner v Kaine (Legal Practice) (2013) VCAT 1077; Legal Services Commissioner v Simon (2013) VCAT 736

^[31] See above n24.