MA v NB [2019] NZLCRO 102 (20 September 2019)

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	LCRO 194/2017
CONCERNING	an application for review pursuant to section 193 of the Lawyers and Conveyancers Act 2006
AND
CONCERNING	a determination of the [Area]l Standards Committee [X]
BETWEEN	MA Applicant
AND	NB, OC and PD _Respondent

[1] Dr MA has applied to review a decision by the [Area] Standards Committee [X] to take no further action in respect of her complaint concerning the conduct of the respondents, Ms NB, Ms OC and Mr PD.

[2] Mr PD’s firm, [Lawfirm 1] New Zealand Limited, now trades as [Lawfirm 2] Limited. I will refer to Mr PD’s firm throughout this decision as [Lawfirm 1], as that was the legal entity in place during the period of time covering the events embraced by this review.

[3] For convenience, I will refer where appropriate to Ms NB and Ms OC as “the lawyers”.

[5] She was providing professional services to a client who was attending sessions with Dr MA, in order to fulfil course requirements to become a counsellor.

[6] Dr MA became concerned that her client could present as a risk to the people he had indicated a preference and desire to work with.

[7] She raised her concerns with the educational institution her client was attending, and with the New Zealand Association of Counsellors.

[8] This was met with complaint from her client that Dr MA had breached confidentiality.

(NZPB) Professional Conduct Committee (PCC). [10] Dr MA carried professional insurance.

[11] Her insurers instructed [Lawfirm 1] to represent her in defending the complaint made. Ms NB was responsible for the carriage of Dr MA’s file. Ms OC, a barrister, was instructed by [Lawfirm 1] to assist. Mr PD, a partner of [Lawfirm 1], became involved when Dr MA made complaint to the firm about the representation she had received from the lawyers.

[12] Following completion of its enquiry, the PCC determined that: (a) Dr MA had breached her professional obligations.

(b) The breach was not of sufficient seriousness to merit a disciplinary response.

[13] Dr MA lodged complaints against Ms NB, Ms OC, Mr PD, and [Lawfirm 1] with the New Zealand Law Society Lawyers Complaints Service (the Complaints Service) on 31 August 2017. Her complaint attached a copy of correspondence she had forwarded to [Lawfirm 1] on 1 June 2017. In her 1 June correspondence, Dr MA recorded a number of concerns about the representation she had received. The substance of her complaints was that:

(d) Mr PD had responded to her complaint in a disrespectful and discourteous manner.

[14] The Complaints Service managed the complaints through its early intervention process. As a consequence, the lawyers were not required to provide a response to Dr MA’s complaints. Mr PD had however responded directly to Dr MA when she had first raised her complaints with [Lawfirm 1]. Mr PD responded to the concerns raised with argument that:

(a) The lawyers had neither misunderstood or misstated the correct legal/ethical test in respect to the disclosure of client information.

(c) The lawyers were aware that Dr MA had discussed the disclosure issue with her supervisors, and this had been factored into the advice provided.

(d) Dr MA had been given a clear indication that her lawyers would act on her instructions.

(e) Whilst it would have been preferable for the lawyers to have met with Dr MA earlier, they had sufficient information to properly form a view which enabled them to responsibly provide initial advice to Dr MA.

(f) The initial advice provided did not suggest that Dr MA was to “capitulate” and concede, rather the expectation was that if Dr MA agreed with the approach suggested, the proposal to be put to the PCC would argue that Dr MA’s conduct fell well short of conduct that required a disciplinary response.

(g) It would have been preferable for the lawyers to have identified the potential risks that would have accompanied the adoption of the initial approach recommended.

(h) The lawyers had accurately represented the breadth of their knowledge and experience.

(i) No evidence had been provided to support the assertion that the practitioners had been conflicted.

[15] The Standards Committee identified the issues to be considered as follows: (a) Did Dr MA receive competent advice from the practitioners?

(c) Was Mr PD’s response to Dr MA of 28 July 2017 disrespectful? [16] The Standards Committee delivered its decision on 28 September 2017.

[17] The Committee determined, pursuant to s 138(2) of the Lawyers and Conveyancers Act 2006 (the Act) that no further action on the complaints was necessary or appropriate.

(a) There was nothing in the material provided by Dr MA that would support a conclusion that she had received other than competent advice from the lawyers.

[19] Dr MA filed an application for review on 17 October 2017. [20] She submits that:

(a) The decision of the Committee failed to “... engage with and address the (substantial) evidence provided regarding all complaints, reaching conclusions unsubstantiated by the evidence”.

(b) The Committee’s decision was “... incorrect in its view that the PCC’s decision, which was based on legal/ethical principle in no way anticipated by my lawyers in their advice, can be used to retrospectively validate that advice as competent”.

(c) The Committee was “... confused as to which relationship is the focus of my concern of (undisclosed) conflict of interest (it speaks of my “insurer” rather than the underwriter of the insurance, which was [Lawfirm 1]s’ client relationship of concern to me)”.

(a) The Standards Committee decision had considered the evidence advanced by Dr MA, however the Committee had concluded that the evidence was unsubstantiated and/or not credible and did not establish Dr MA’s allegations.

(b) The lawyers’ initial assessment of the legal issues was reinforced by the finding reached by the PCC.

(c) There appeared to be some confusion on Dr MA’s part as to the entity involved in providing her professional insurance.

[23] The nature and scope of a review have been discussed by the High Court, which said of the process of review under the Act:1

... the power of review conferred upon Review Officers is not appropriately equated with a general appeal. The obligations and powers of the Review Officer as described in the Act create a very particular statutory process.

The Review Officer has broad powers to conduct his or her own investigations including the power to exercise for that purpose all the powers of a Standards Committee or an investigator and seek and receive evidence. These powers extend to “any review” ...

... the power of review is much broader than an appeal. It gives the Review Officer discretion as to the approach to be taken on any particular review as to the extent of the investigations necessary to conduct that review, and therefore clearly contemplates the Review Officer reaching his or her own view on the

evidence before her. Nevertheless, as the Guidelines properly recognise, where the review is of the exercise of a discretion, it is appropriate for the Review Officer to exercise some particular caution before substituting his or her own judgment without good reason.

[24] More recently, the High Court has described a review by this Office in the following way:2

A review by the LCRO is neither a judicial review nor an appeal. Those seeking a review of a Committee determination are entitled to a review based on the LCRO’s own opinion rather than on deference to the view of the Committee. A review by the LCRO is informal, inquisitorial and robust. It involves the LCRO coming to his or her own view of the fairness of the substance and process of a Committee’s determination.

[25] Given those directions, the approach on this review, based on my own view of the fairness of the substance and process of the Committee’s determination, has been to:

(a) Did the lawyers fail to competently represent Dr MA? (b) Was Mr PD’s response to Dr MA disrespectful?

[27] Dr MA filed extensive submissions with the Standards Committee and the Review Office. Because of time constraints at the hearing, I was unable to hear final submissions from Dr MA. She was given the opportunity to file further written submissions at the conclusion of the hearing.

[28] The arguments advanced on review by Dr MA are comprehensive. In what follows I will not canvass or mention every element and aspect of the materials that have been put before me from the parties, but all matters have been considered.

[29] It is fundamental that parties should be able to understand what has led a court or tribunal to the outcome reached. But that does not mean that a decision writer is obliged to refer to, let alone discuss, every aspect of each party’s case. Such a course of action would have the capacity to bring adjudicative processes to an overload-induced halt.

[30] This Office has previously said on the extent of the duty to provide written reasons:3

[33] Mr ZA submits there is a mandatory obligation to consider and respond to every submission made by a complainant, or, in this case, an applicant. By not doing so, he submits, the Standards Committee breached the requirements of natural justice. I do not agree. In R v Nakhla the Court said:4

As to the complaints in the motion that the Court did not deal with certain submissions ... it may be observed that a belief on the part of counsel ... that his argument has not been fully understood or adequately discussed is by no means uncommon ... The Court is not obliged in giving its reasons for judgment to discuss every aspect of argument.

In giving its reasons for judgment [a Court] is not composing a general lecture upon a legal topic: it is setting out as succinctly as the time available for preparation permits, those propositions of law which it considers are correct, and which are essential steps in the decision it has reached in the particular case. It is not obliged to state an answer to the arguments against the propositions of law which it accepts as correct and relevant to its decision whether such arguments have been addressed by counsel or not.

[35] Those principles apply equally, if not more so, to determinations by a Standards Committee (and this Office) where allegations and submissions by (in particular) complainants, are often made in a ‘scatter-gun’ manner and often without merit or substance. It would be an appalling misuse of the resources of Standards Committees and this Office, if the requirement is to specifically address every allegation and submission.

[31] I agree with those observations. Obviously enough, what Diplock LJ said about matters of law applies similarly to matters of fact.

[32] In LCRO 205/2015, at paragraphs [41] to [50], I addressed the conduct rules and principles of relevance when considering the question as to whether a lawyer has provided competent representation. I repeat those comments in paragraphs [33] to [42]

5 Hardwick Game Farm v Suffolk Agricultural Poultry Producers Assn Ltd [1966] (UKCA) 1 All

[33] In the course of providing regulated services to their client, a lawyer must act competently, and in a timely manner consistent with the terms of the retainer and the duty to take reasonable care.6

[34] A lawyer’s conduct may be deemed to be unsatisfactory if, in the course of providing regulated services to their client, their conduct falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer.7

[35] The duty to act competently has been described as “the most fundamental of a lawyer’s duties” in the absence of which “a lawyer’s work might be more hindrance than help”.8

[36] The standard of competence is an objective one. The question is whether the lawyer under scrutiny applied the care or skill that any reasonable lawyer in the same position would have done.9

[37] It has been noted that lawyer competence, though pivotal to public confidence in the profession and the administration of justice, lacks any generally accepted meaning; it instead takes its flavour from the perspective of the observer.10

[38] Neither the Lawyers and Conveyancers Act 2006, nor the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (the Rules), attempt to lay down a definitive definition of competence, a determination of which must inevitably be attempted through an examination of a variety of factors including, but not limited to, the nature of the retainer and the context in which the conduct complaint arises.

[39] It is important to recognise that an obligation to provide competent advice does not impose unreasonable burden on a practitioner to be always right, or to always provide the right advice.

While there is an existing professional duty of competence in New Zealand, albeit one which is particularly narrow, there is no duty to provide a high level of

6 Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 3.

8 Duncan Webb, Kathryn Dalziel and Kerry Cook Ethics, Professional Responsibility and the

10 GE Dal Pont Lawyers’ Professional Responsibility (6th ed, Thomson Reuters, Sydney, 2017)

service to clients. The duty of competence is, in reality, a duty not to be incompetent and is aimed at ensuring minimum standards of service.

[41] What may on first reading present as a singularly less aspirational objective for a profession than would be expected is, on closer examination, an affirmation of a reasonable standard of expectation of the level of competency required of lawyers. All lawyers are expected to provide a competent level of service to their clients.

[42] A broad, and useful expression of the indicia to be considered in determining competency was attempted by the American Bar Association in a discussion document where it said:12

Legal competence is measured by the extent to which an attorney is specifically knowledgeable about the fields of law in which he or she practises, (2) performs the techniques of such practice with skill, (3) manages such practices efficiently, (4) identifies issues beyond his or her competence relevant to the matter undertaken, bringing these to the client’s attention, (5) properly prepares and carries through the matter undertaken, and (6) is intellectually, emotionally, and physically capable. Legal incompetence is measured by the extent to which an attorney fails to maintain these qualities.

[43] Conduct issues do not inevitably arise because a particular litigation strategy advanced by a lawyer has been unsuccessful.

[44] In an unpublished decision of this Office, LCRO 262/2014, the Review Officer noted that:

[116] Although there are rules of engagement for litigation, such as procedural and evidential rules, as well as [the Rules], the conduct of litigation is largely an inexact science driven by tactical and strategic decisions made by the opposing parties.

[117] One lawyer’s view of the most effective strategy to conduct litigation may be diametrically opposed to another lawyer’s view and, absent incompetence, it is not always possible to determine which view is the better.

[118] Again, absent incompetence, tactical and strategic advice given by lawyers to their clients will be informed by that lawyer’s experience as well as their assessment of the other party’s position. It is, in many respects, a battle of wits and wills.

[45] In Auckland Standards Committee 3 v Castles, the Lawyer’s Disciplinary Tribunal noted, that it was not the “Tribunal’s role to closely analyse and second-guess every move of counsel during each piece of litigation. We consider our role is to take

12 American Bar Association Committee on Continuing Professional Education and American

Law Institute “A Model Peer Review System” (discussion document, 15 April 1980).

[46] It has also been noted that a lawyer “is not bound... to exercise extraordinary foresight, learning or vigilance”.14

[47] Importantly, it is not the function of a Standards Committee, or a Review Officer, to cast themselves into the role of a de facto decision maker and to attempt to arbitrate on disputes that fall properly within the domain of an appropriately constituted decision-making body to determine. In this case, it fell to the PCC to consider the evidence and to determine the conduct complaint that had been brought against Dr MA.

[48] The nub of Dr MA’s complaint that she was not competently represented, is argument that her lawyers recommended in the early stages of the complaint inquiry that she adopt a course of action which she considered was demonstrably adverse to her interests.

(a) premised on an incorrect understanding of the legal test to be applied in assessing whether there had been a conduct breach.

(b) not informed by a proper understanding of the evidence, as the lawyers had failed to meet with her prior to formulating their advice.

[50] Dr MA is not entirely critical of the lawyers, acknowledging when first making complaint to Mr PD, that “there were aspects of my case that my lawyers handled well, and I have told them so. These were their handling of the PCC’s refusal to order the production of my case notes, and their submissions made at my hearing”.15

[51] To support argument that the lawyers failed to competently represent her, Dr MA references a series of emails exchanges. It is her view that the emails corroborated her view both that the lawyers’ advice was inadequate, and that the lawyers were conflicted.

[52] I have carefully considered those emails, the most relevant to Dr MA’s argument being an email forwarded to her on 4 November 2016.

14Jennings v Zilahi-Kiss (1972) 2 SASR 493 (SASC) at 512 cited with approval in Dal Pont, above n 10.

[53] Consideration of Dr MA’s accusation that the lawyers failed to competently represent her starts with that email, Ms NB’s correspondence of 4 November 2016, which reflects the views of both lawyers.

[54] Dr MA has a number of concerns about the email. I will address each in turn.

[55] She expresses concern that the lawyers had given preliminary advice on the approach she should take to the complaint, without having met with her. It was her view that if she had been given opportunity to fully explain the background and the disciplinary issues in play, the lawyers would have acquired a proper understanding of her case, and thus informed, would not have provided the initial advice that they did. Importantly, Dr MA considers that the lawyers when formulating their initial advice, failed to understand the legal test the PCC would follow when considering the complaint.

[56] Ms NB and Ms OC rejected suggestion that they had given preliminary advice in circumstances where they’d not had opportunity to fully acquaint themselves with the intricacies of the case. They considered that they had sufficient information to give them confidence that they were well-positioned to advise Dr MA, irrespective of the fact that they had not, as at 4 November 2016, met with her.

[57] Ms OC referenced the documentation that had been read, and in particular, emphasised that both she and Ms NB had carefully considered the response Dr MA had provided to the P3/4 Committee.16

[58] Ms NB said that it was, in her experience, not uncommon in this field of work, for lawyers to provide initial advice without having had opportunity to meet with their client. She said that she’d had many discussions with Dr MA, a number of email communications with her, and had read all the relevant documentation.

[59] Dr MA thinks it unlikely that the lawyers had read her submission to the P3/4

Committee. She invited me to read that submission and then carefully consider that submission alongside the advice given by the lawyers. It was her view that having done so, I could reach no conclusion other than that the P3/4 submission had not been read by the lawyers.

[60] Ms OC noted her objection to suggestion that she had not read a document that she was emphatic she had read.

16 This is a Committee delegated by the NZPB to deal with complaints and competence matters.

[61] I accept that Ms NB and Ms OC felt that they had a sufficient understanding of Dr MA’s case to enable them to proffer an initial view on a proposed path forward, but I consider that it would have been preferable for them to have met with their client earlier in the retainer than they did.

[62] I was surprised by the lawyers’ indication that it is commonplace for lawyers when representing clients in professional disciplinary matters to complete a substantial amount of work prior to meeting with their client.

[63] Conduct complaints are matters which are understandably taken very seriously by professionals. Reputations and livelihoods can be at stake. I agree with Dr MA that a complete understanding of her position could not be achieved by simply perusing documentation and communicating by phone and email. A “face-to-face” interview would have provided the lawyers with opportunity to form a clearer understanding of Dr MA’s position, and importantly, have allowed Dr MA a chance to clarify any matters that she considered to be of importance.

[64] Mr PD conceded that it would have been beneficial for the lawyers to have met with Dr MA sooner than they did.

[65] Whilst I consider that it would have been preferable for the lawyers to have met with Dr MA sooner, I am not persuaded that their failure to do so constituted an error or omission of sufficient gravity to merit the consideration of a disciplinary response.

[66] I am satisfied that both Ms NB and Ms OC had perused a significant amount of information. I do not agree with Dr MA’s characterisation of the materials considered as insubstantial. I am also confident that there had been considerable phone and email communication with Dr MA.

[67] I will not, as Dr MA invites me to be, drawn into comparing Dr MA’s submissions alongside the advice proffered, with purpose to arrive at emphatic complete conclusion as to whether Ms OC had, or had not, read the P3/4 Committee submission. I do not agree with Dr MA that the inferences she argues for are obvious and compelling and I simply note that it is problematical for a Review Officer to attempt to determine what a lawyer has or has not read.

[68] Ms OC says the submission was read. It is difficult to see why it would not have been.

2016 email, was that she believed that the lawyers were, in that correspondence, advising her to capitulate. This was advice that Dr MA considered was premised on an incorrect understanding of legal principle (and I will return to that issue shortly) and destined, if adopted, to have catastrophic consequences not only for her, but for others potentially affected. She is convinced that her lawyers were painting her into a corner and presenting her with an option which, if followed, would have done irreparable harm to her case.

[70] Closely allied to this concern, was Dr MA’s vigorous rejection of the lawyers’ argument that the 4 November 2016 advice was in the nature of preliminary advice. In Dr MA’s view, the advice to “capitulate” was emphatic and intended to bind her. She considered that most of her colleagues would, if they had been advised in such forthright fashion, have concluded that they had no option but to adopt the advice given.

[71] She devotes a considerable part of her submissions to argument that Ms NB’s correspondence of 4 November 2016 was expressed in such a forthright manner, that she was effectively being presented with no option but to follow the lawyers’ recommendations. Her only bulwark against what would have been for most professionals in her position a situation where they had no alternative but to acquiesce to the recommendations made, was her legal experience, which provided her with both the confidence and necessary degree of assertiveness to enable her to resist the lawyers. If she had not had the benefit of legal training and experience in the law, Dr MA says she would have been unable to recognise the manifest deficiencies in the advice provided and would likely have adopted the lawyers’ recommendations.

[72] I do not agree with Dr MA’s description of the advice provided as advice which was making demand of her to “capitulate”. That assessment does not accurately characterise the nature of the advice given, and ignores the extent to which the advice presents as simply an invitation for her to consider a particular approach.

[73] The correspondence considered in its totality does not give indication either in tone or content of the lawyers presenting their advice to Dr MA in a manner which could reasonably be described as demanding or insistent. Nor can the advice proffered be sensibly interpreted as indicative of the lawyers making demand of Dr MA that she “capitulate” and throw in the towel.

[74] Reaching that conclusion does not require the dismantling and dissection of every sentence and word of the lengthy email of 4 November 2016. It is a conclusion comfortably arrived at by a consideration of the email in its totality.

[75] I accept that when a lawyer provides advice to a client, it will frequently be the case that the client is inclined to follow the advice. A lawyer is expected to have a sound understanding of the issues involved in the case they are managing, and whilst, as has been noted, they do not labour under the burdensome yoke of having to be always right, they are expected to provide their client with competent advice. In showing deference to the lawyers’ knowledge and experience, the client may feel pressured to follow the advice offered, even in circumstances where they have reservations about the advice.

[76] But a lawyer’s assessment of “best option” does not compel the client to adopt the strategy recommended, nor does a lawyer’s recommendation that their client consider the possibility of the making of concession, necessarily indicate that the lawyer has little confidence in their client’s case. In this case, as Dr MA herself emphasises, the lawyers were dealing with an intelligent and articulate client who was herself legally qualified. I think it unlikely that the lawyers would have had expectation that their advice would be construed by Dr MA as advice that she was compelled to follow, and the lawyers’ correspondence gives obvious indication of expectation that the advice would be discussed with Dr MA.

[77] In suggesting that they considered that Dr MA’s interests may be best served by making a concession at the outset, it is clear that the lawyers considered that there was a significant prospect that the disclosure made by Dr MA breached her obligations of confidentiality.

[78] Whilst the lawyers were clearly providing Dr MA with a strong recommendation and suggesting that they considered it in her best interests to follow the course they had proposed, they were not presenting their advice in terms which demanded compliance, or in a manner which allowed no opportunity for input from Dr MA.

[79] It is difficult to characterise the correspondence as such when the correspondence concludes with request to Dr MA to consider the advice given, and with invitation to her to meet with the lawyers “to discuss”.

[80] Nor am I persuaded that the lawyers’ recommendation that Dr MA consider the possibility of conceding a point, was advice that would, if followed, have had the catastrophic consequences for Dr MA that she considered was inevitable.

[81] It is difficult and indeed imprudent to speculate as to what the outcome may or may not have been if the concession suggested had been made, but it is relevant to note that it is commonplace in disciplinary proceedings for lawyers to make an assessment that the conceding of a particular point or points may be advantageous for their client. A decision to offer a concession is one that may be made after a consideration of a number of factors.

[82] Whilst lawyers may conclude that their client’s position would be enhanced by the making of a concession, clients so advised may vigorously resist suggestion that there be any concession made.

[83] In the criminal jurisdiction for example, it is commonplace for lawyers to determine that their client’s interests would be best served by their client giving indication to the court of an intention to enter a guilty plea at an early stage in the proceedings.

[84] That advice may be vigorously resisted by their client, and firm instructions given to the lawyer to defend the charge. The defence run may ultimately prove successful, but it does not necessarily follow that the initial advice offered was not competent advice.

[85] In the professional disciplinary jurisdictions, it is not uncommon for lawyers to make an assessment that their client’s position can be productively advanced, by making concession on matters which the lawyers have formed a view will not significantly diminish their client’s position. A lawyer may reasonably form a view that a timely concession may advance their client’s position by providing their client with opportunity to exhibit a capacity for self-reflection and an ability to undertake a measured analysis of the conduct complained of. These are traits which may persuade a disciplinary body that the degree of self-awareness exhibited, obviate the need for any overt disciplinary intervention.

[86] A recommendation that a concession be offered will frequently be made in circumstances where the lawyer concludes that any potentially negative consequences from making the concession, are outweighed by the risks their client will be exposed to if the matter proceeds to a hearing.

[87] Dr MA was acutely aware of the risks involved in making a disclosure. She did so from genuine concern for the safety of others, but with a proper awareness that her decision could potentially put her professional reputation at risk.

[88] Any assessment as to the competency or otherwise of the advice given by the lawyers, must be undertaken with consideration of the full context in which the advice was given, including a consideration of the lawyers’ assessment of the risks involved in advancing the defence.

[89] The lawyers argued that the advice offered was in the nature of a preliminary view, and not intended to bind Dr MA to the approach recommended.

[90] Dr MA vigorously rejects suggestion that the advice given could reasonably be categorised as preliminary advice.

[91] There was nothing in her view, “preliminary” about the advice. She felt that she was being told in emphatic terms what to do. She is convinced that the lawyers had formed a view that if she was to make the concession they had recommended, the matter would be brought to a prompt conclusion. She suggests that the lawyers were motivated to bring the matter to an expeditious resolution from a desire to reduce costs to the insurer.

[92] The correspondence begins with the lawyers’ indication that they believed that the matter had reached a point where it was appropriate to discuss with Dr MA how the matter was to proceed.

[93] The letter concludes with indication to Dr MA that the lawyers considered that the proposal they had outlined presented her with the best prospect of a successful outcome; with request being made of Dr MA to consider the proposal, and to let the lawyers know if she would like to meet to discuss the recommended course of action. She is advised, that if she is “comfortable” with the suggested approach, the lawyers would draft a response.

[94] In my view the advice provided was in the nature of preliminary advice. The fact that the lawyers presented as firm in their view that it would be appropriate for Dr MA to consider making a concession, did not commit Dr MA to that position or bind her in any way. Nor was it intended to.

[95] It is important to emphasise that the tendering of legal advice is frequently an organic process, where lawyers are often prompted and required by changing circumstances, to modify and vary their advice as a matter evolves.

[97] Dr MA considers that the lawyers, when formulating their initial advice, had misunderstood the critical legal principle which would underpin the PCC enquiry, the “test” the PCC would apply in addressing whether Dr MA had breached her professional obligations.

[98] Dr MA does not characterise the error as minor or insignificant. She believes the mistake was of such magnitude, that if the lawyers had proceeded to advance her case on the basis of their understanding of the applicable law, her case would have been irretrievably compromised.

[99] She argues that the mistake displays a level of incompetence from the lawyers of such degree, that she has real concerns that colleagues who may face disciplinary proceedings in the future, would be at risk if they were to be represented by Ms NB, Ms OC, or [Lawfirm 1].

[100] She says that a significant motivation for her in deciding to advance her complaints, was a desire to protect her colleagues. She notes that she is “... concerned about the plight of other professionals who may suffer (or have suffered) the same quality of service from my lawyers or other lawyers from/engaged by [Lawfirm

1]”.17 Further, she explains that “... the reason I’ve taken the time to pursue this

complaint is my concern for other psychologists facing disciplinary proceedings, and the wider implications if they also have received/will receive advice on service of such poor quality”.18

[101] It is argument that the conduct of the lawyers (and the firm) was so egregious that it demands a disciplinary response which would, in some way, circumvent the lawyer’s capacity to provide legal advice on matters relating to professional discipline in the future.

[102] Ms OC emphatically rejected suggestion that the lawyers had got the law wrong. It was her view that the advice proffered in the 4 November 2016 correspondence was both legally correct and appropriate.

[103] The Legal Complaints Review Office is not a court. It does not determine issues of disputed law.

[104] It fell to the PCC to determine the legal principles of relevance, and the proper application of those principles, in the context of a conduct complaint engaging allegation that a psychologist had breached obligations of confidentiality.

[105] Whilst Dr MA has provided a comprehensive explanation as to what she considered was the correct legal test to be applied, and an equally thorough account of where she felt the lawyers had got it wrong, I am not persuaded that the analysis, comprehensive as it is, leads to the irrefutable conclusion that the lawyers had applied the wrong legal test. The advice given by the lawyers has to be considered in the context of the approach the lawyers were recommending at the time. Importantly, the approach being suggested proceeded from an assumption that the strategy proposed would rely on concessions being made but with expectation that those concessions would be made on the firm understanding that Dr MA did not accept that her conduct was improper, or in any way deserving of an adverse disciplinary finding.

[106] Even if it is the case that Dr MA is correct in her view that Ms NB and Ms OC initially got the law wrong, I am not persuaded that the error, if established, would require a disciplinary response.

[107] Dr MA accepts, at least in her initial submission, that the lawyers had competently represented her at the PCC hearing.

[108] Almost overlooked in the extensive submissions filed, is the fact that the outcome of the PCC hearing was positive for Dr MA.

[109] The only determination made was that no further steps be taken under the Health Practitioners Competence Assurance Act 2003 in relation to the subject matter of the investigation.

[110] It is most commonly the case in the disciplinary jurisdiction, when complaint is made that the lawyer has provided inadequate advice, that it is argued by the complainant that the advice provided adversely compromised an outcome.

[111] In litigation cases, that argument frequently takes the form of complaint that the lawyer’s failure to follow an appropriate litigation strategy resulted in the case being lost.

[112] Dr MA accepts that the lawyers presented her argument at the PCC hearing in a manner consistent with her view of the applicable law.

[113] Whilst she had conceded in her earlier submission that her lawyers had made a competent job of preparing her submissions for hearing, in her closing submission she steps back from that position to a degree and argues that:19

The fact that my lawyers made a good submission to the PCC which I was happy to acknowledge at the time – does not make my lawyers’ position better, but worse: it shows that they were capable of doing a good job, they knew the law, but they chose not to perform well at the time of the 4 November advice and generally, before the hearing. My acknowledgement when they did perform well is a tribute to my fairness not the quality of the earlier advice to me.

[114] The critical point in the proceedings was the PCC hearing. Dr MA’s suggestion that her initial concession that the lawyers had performed well at the hearing was a “tribute to [her] fairness” misses the point, which is, that the lawyers on her own admission, prepared sound submissions and represented her competently when it mattered most.

[115] With every respect to Dr MA, suggestion that her lawyers had earlier “chosen” not to provide her with proper advice is a puzzling submission, and one seemingly constructed with purpose to divert attention from the fact that her argument (that the lawyers failed to competently represent her as a consequence of initially providing advice she considered to be unreliable) is significantly diminished by the fact that she accepts her case was correctly argued before the PCC.

[116] Having accepted that the case was well argued at the Committee hearing, it is difficult for Dr MA to sustain argument that she was not competently represented.

[117] The argument inevitably then returns to allegation that the earlier advice provided was both legally wrong, and so insistently presented, that any person less equipped than Dr MA would have been significantly compromised.

[118] It is submission that runs in tandem with Dr MA’s contention that she is pursuing her complaints with an altruistic purpose to protect others.

[120] I have concluded that the initial advice given could reasonably be described as preliminary advice. To suggest that the advice proffered in those circumstances provides a reasonable basis for argument that neither Ms OC nor Ms NB could be relied on to provide sensible advice in the future, approaches the untenable.

[121] I have also concluded that the advice provided was not advanced in terms which could reasonably be construed as making demand of Dr MA to accept the advice.

[122] What is clear is that the lawyers (somewhat belatedly in my view) met with

Dr MA and sensibly took full instructions from her, and listened to her concerns.

[123] Whilst Dr MA identifies further concerns with the representation provided by the lawyers following their initial advice, those matters are not advanced by her with any degree of robustness.

[124] It must also be noted that the advice was given in a context where Dr MA was being required to respond to a number of complaints.

[125] There is no certainty as to what the eventual outcome of the conduct enquiry would have been, if the initial strategy suggested by the lawyers had been adopted.

[126] Whilst there is argument as to whether the lawyers had correctly described the legal test applicable, it is understandable that they identified the issue of potential breach of confidentiality as a significant concern.

[127] It is by no means established on the evidence with the degree of certitude that Dr MA considers obvious, that the advice provided was so manifestly deficient as to warrant Dr MA’s description of it as advice that both demanded a disciplinary response, and advice that, if adopted, presented consequence of risk to the broader public.

[128] In my view, there are significant problems with argument that a lawyer’s advice has been so incompetent as to merit consideration of the imposition of a disciplinary penalty in circumstances where it is acknowledged that the advice of which complaint was made has not been followed, has been modified by the lawyers, and has had no material impact on outcome.

[129] Dr MA is caustic in her criticisms of Mr PD’s response to her complaints.

[130] She accuses Mr PD of failing to address her substantive arguments. She suggests that Mr PD deliberately sets out to mislead. He is said to be evasive. He is accused of exploiting what Dr MA describes as a “seriously flawed” PCC decision. She alleges that Mr PD had employed a “host of tactics” to effectively avoid or minimise the serious issues he had been asked to address. She concludes her criticism of Mr PD by noting that “I am driven to disgust by his attempt to exploit the PCC’s seriously flawed and surprising decision to provide retrospective validation for my lawyers’ advice”.20

[131] In her concluding submissions to the Complaints Service, Dr MA submits that

_{she had “documented many examples of misleading, confusing,
or contradictory}

responses” provided by Mr PD.21 She considers that the manner in which Mr PD had

[132] This is not accusation of mere discourtesy. It is accusation that Mr PD has engaged in misleading and deceptive conduct.

[134] That is not surprising. The manner in which Mr PD advances argument on behalf of the lawyers is courteous and respectful. He identifies the concerns raised and then proceeds to address each of those concerns in turn. He commences by explaining that he has, in considering the complaint, read the complaint, reviewed the file, and sought comment from the lawyers.

[135] After addressing each of the complaints raised, Mr PD concludes by acknowledging the areas where he considers the lawyers could have done better. He indicates that he had discussed his correspondence with the lawyers, and that they had agreed with its contents. He says that the lawyers had also, on reflection, considered that they could have done better in the areas identified by Mr PD.

[136] Absent from this correspondence is any indication of Mr PD adopting an overly defensive approach in his response.

[137] Dr MA’s allegation of discourtesy, is founded not on concerns as to how Mr PD has advanced the lawyers’ position, but rather what he says in advancing that position.

[138] Dr MA identifies a number of areas where she considers that Mr PD has failed to provide proper response to her complaints. Dr MA provides comprehensive account of all matters she considers to be of relevance. This on occasions, engages her in providing detailed account of the background to the conduct complaint, and an extensive analysis of her engagement with the regulatory body.

[139] Having given careful consideration to the concerns raised by Dr MA, I do not conclude that the explanations provided by Mr PD remotely justify Dr MA’s description of them as being evasive, deceptive, and misleading. I have no wish to be critical of Dr MA and I formed a view of her at the hearing as a person of genuine conviction, but her detailed examination of the explanations provided by Mr PD present at times as

_{tendentious and quite disproportionate in the approach adopted. Her
analysis of the}

responses provided by Mr PD simply does not establish her argument that Mr PD was endeavouring to provide cover for the lawyers.

[140] Bluntly put, Dr MA’s fundamental objection to Mr PD’s response is that she disagrees with the explanations provided. She allows no room for possibility of genuine disagreement, or for possibility that Mr PD’s defence of the lawyers is genuinely advanced, and advanced in good faith.

[141] Indication of a disagreement of view is frequently parlayed by Dr MA into accusation of serious misconduct that is not established on the evidence.

[142] Her propensity to characterise any aspect of Mr PD’s response with which she

disagrees as evidence of deliberate attempt on his part to mislead, is unfortunate.

[143] The explanations Mr PD provides in respect to the general complaint that the lawyers failed to provide competent representation are reasonable and balanced, and essentially do no more than support the lawyers’ position that they considered that they had provided competent advice to Dr MA. Dr MA challenges the explanations provided, and she is entitled to do so but in attacking the explanations provided in the manner she does, Dr MA is frequently simply availing herself of opportunity to relitigate the complaints she makes against the lawyers.

[144] Dr MA is particularly critical of what she perceives to be the reliance Mr PD had placed on the PCC decision to provide what she describes as a “retrospective validation of my lawyers’ advice”.

[145] Dr MA is highly critical of the PCC decision. She describes the decision as

“very poorly written”, and the product of a “seriously flawed process”.22

[146] Mr PD’s belief (that he considered that the initial advice provided by the lawyers was supported by the PCC finding) is not evidence of him deceptively or misleadingly using the decision to validate the lawyers’ position. He had a view of the decision and he was entitled to express it. To the extent that the decision concludes that there had been a technical breach by Dr MA of her obligation to maintain confidentiality, the decision identifies the issue which had been of most concern to the lawyers. Nor did I consider Mr PD’s reference to the decision to be an attempt on his part to validate all the decisions taken by the lawyers. He simply records his view that

[147] Nor in my view, was there anything discourteous in the explanation provided by Mr PD as to [Lawfirm 1]’s relationship with Dr MA’s insurer. Mr PD simply sets out in a measured temperate fashion, explanation that his firm had, over a period of time, received instructions from the insurer.

[148] I agree with the Committee, that Mr PD’s response was balanced, considerate and respectful.

[149] [Lawfirm 1] were instructed by Dr MA’s insurer to provide representation to Dr

[150] This was an arrangement typical of the tripartite situation which occurs when an insurer, under an insurance policy, undertakes the defence of a claim on behalf of an insured party.

[151] The fact that Dr MA did not choose the lawyers to represent her, and did not pay the lawyers’ fees, did not exclude a lawyer-client relationship.23

[152] It was the lawyers’ duty to remain independent and free from compromising influences or loyalties when providing services to their client.24

[153] In acting for a client, a lawyer must, within the bounds of the law and conduct rules, protect and promote the interests of the client to the exclusion of the interests of third parties.25

[154] A lawyer must not act for more than one client on a matter in any circumstances where there is a more than negligible risk that the lawyer may be unable to discharge the obligations owed to one or more of the clients.26

[155] Whilst it is commonplace for lawyers to be instructed by an insurer to represent an insured party, these arrangements which present as positioning a lawyer in a situation where the lawyer can be seen to be answerable to two masters, require attentive management on the part of the lawyers, to ensure that any possibility of

[156] Dr MA correctly notes that management of the inherent conflict in representing

a claimant when another party is paying the bill is a “finely balanced matter”.27

[157] In Ethics, Professional Responsibility and the Lawyer, the authors note that:28

While the terms of the contract and the principles of insurance law may govern the manner in which the insurer is entitled to act, there is little to assist the lawyer who is acting for clients with such divergent interests. It does, however, appear clear that as soon as an actual conflict of interest arises between such clients, the lawyer will be placed in an impossible situation and the only realistic alternative is to advise both clients to seek separate legal advice.

[158] It has been argued, that “where the interest of insurer and insured would diverge, the solicitors cannot act further without the fully informed consent (which will inevitably mean independent legal advice) of both parties”.29

[160] Attention then turns to identifying the area(s) in which Dr MA contends that the lawyers were conflicted.

[161] There are two limbs to her argument that the lawyers failed to preserve their neutrality.

[162] Firstly, she submits the lawyers’ letter of 4 November 2016 was so manifestly inadequate that no reasonable conclusion could be drawn other than that the lawyers were under pressure from the insurer to close her case down. Bringing her case to a premature conclusion was financially advantageous for the insurers.

[163] I have addressed argument that the lawyers failed to provide competent representation. I am not persuaded that the lawyers compromised her representation out of a desire to please the insurer. There is simply no compelling evidence of them having done so.

[164] The second limb on which Dr MA relies in advancing argument that the lawyers were conflicted, is based on her belief that the lawyers had a close commercial

28 Ethics, Professional Responsibility and the Lawyer, above n 8 at [7.16] (citations omitted).

29 Chris Chapman and Jillian Mallon "Conflicts of interest faced by solicitors instructed by solicitors instructed by insurers to conduct litigation on behalf of insureds” (1996) 26 VUWLR

relationship with the insurer which compromised their ability to provide her with truly independent representation.

[165] Dr MA says that it had come to her attention that [Lawfirm 1] had an existing relationship with the insurer. She made demand of the firm to provide her with information regarding the extent of its engagement with the insurer. Mr PD’s indication that he was prevented by privilege from disclosing the extent of his firm’s involvement is criticised by Dr MA as not providing a transparent or substantive reply.

[166] That was not the case. Mr PD was under no obligation to provide details of the extent of the instructions his firm had received from the insurer, and I agree that he would likely have put himself at risk of compromising the duty of confidentiality owed to his insurer client if he had disclosed the information requested by Dr MA.

[167] Dr MA argues that the Law Society should be directing [Lawfirm 1] to disclose documents and address the nature of its relationship with the insurer.

[168] Dr MA is unable to clarify precisely the extent of the commercial relationship between [Lawfirm 1] and the insurer but noted that her broker had reported to her the relationship was significant. It is clear from the overall thrust of her submissions that she has formed a firm view that as [Lawfirm 1] is frequently instructed by her insurer, the firm’s interests are inevitably more closely aligned with the insurer than with the clients they are instructed to represent. It is argument that the firm knows which side its bread is buttered on.

(a) [Insurance Company] was Dr MA’s insurance broker, not her insurer or underwriter.

[170] Examined in its totality, Dr MA’s argument does little more than postulate that [Lawfirm 1]’s history of taking instructions from the insurer must, in ways which are not particularised or fully explained, have prompted the lawyers to discount and disregard the professional obligations they owed to her. Implicit in the argument being advanced is an acceptance of the proposition that if [Lawfirm 1] had an ongoing and significant commercial relationship with the insurer, its ability to independently represent members of the psychologist profession was compromised.

[171] It is commonplace for insurers to instruct a preferred law firm to represent insured parties.

[172] It is frequently the case that insurers will instruct lawyers who have developed an expertise in a particular branch of insurance law.

[173] The fact that Mr PD’s firm had previously acted for the professional indemnity insurers, and had a continuing commercial relationship with those insurers, did not in itself create a conflict of interest.

[174] It is difficult to see how the industry of providing insurance cover to professionals could continue to operate, if the existence of a continuing commercial relationship between insurer and lawyer was perceived to be a bar to the lawyer’s ability to represent the insurer’s clients.

[175] It will likely continue to be the case that companies who provide insurance cover to professionals will control the choice of lawyer to represent the insurer’s client. It is also probable that insurance companies will continue to establish and foster relationships with lawyers who they perceive to have developed a particular expertise in representing clients facing professional conduct complaints.

[176] Mr PD says that the insurer did not place any explicit or implicit pressure on his firm to reduce costs by seeking to close down Dr MA’s case, or otherwise impede the preparation of her defence. There is no evidence to contradict Mr PD’s account.

[177] Dr MA finds further support for argument that the lawyers were conflicted, in correspondence her broker had forwarded to her on 17 March 2017. In this correspondence her broker informs her that it had been an unusual year for the New Zealand Psychological Society’s professional indemnity insurance group scheme, with an unprecedented number of complaints being made. This had resulted in premiums being increased.

[178] There is nothing in this which can responsibly and fairly lead to conclusion that the lawyers were conflicted. The fact that the insurers were facing a spike in claims, does not, in the absence of any other evidence to establish relevance, provide reasonable grounds for assertion that the lawyers were conflicted.

[179] As further evidence of potential conflict, Dr MA expresses concern that her lawyers had written to her advising that they were “doing a bit of housekeeping” for the insurer and making request for her to advise if she had implemented any particular practices for managing risk since she had notified them of her claim.

[180] I appreciate that considered in the context of her wide-ranging concerns, Dr MA viewed this correspondence to be but further evidence of the lawyers’ promoting the insurer’s interest, but in my view, this request was simply a reflection of the particular characteristics of a retainer of this nature.

[181] Those characteristics are identified by Mr PD in the initial letter of engagement provided to Dr MA, in which he:

(b) Confirms the extent to which the insurer exercises control over the retainer.

(d) Records that the relationship is governed principally by the terms of the insurance policy.

[183] Those terms set out in entirely conventional form the duties owed to Dr MA, including:

(b) an obligation to ensure that information acquired during the course of acting remained confidential.

[184] The terms of business specifically reference the obligations imposed on the lawyers by the Rules, and emphasise the need to promote Dr MA’s interests, and act for her free from compromising influences or loyalties.

[185] It is immediately apparent that there is a degree of tension between the letter of engagement which is careful to specify the areas in which the insurer retains a degree of control over the retainer, and the terms of trade which properly focus on reinforcing the lawyers’ obligation to promote their insured client’s interests.

[186] This tension is manifestly apparent in the differing approaches exhibited in respect to an issue of critical importance for a lawyer’s client – confidentiality.

[187] The conduct rules demand from lawyers a duty to protect and hold in strict confidence all their clients’ information, a duty which continues after the client has ceased to be a client.

[188] But the rigidity of that approach is fettered by the provision in the terms of engagement which permits the lawyers to disclose information confidential to Dr MA, if required to do so by the contract of insurance.

[189] Another example of an obvious tension is reflected in the description of the circumstances in which the retainer may be terminated. The circumstances in which a lawyer may terminate a retainer are narrowly confined by the conduct rules, but [Lawfirm 1]’s letter of engagement makes it clear that the insurer retains the right to withdraw cover at any time.

[190] The position is starkly put in clause 2.5 of the letter of engagement, where it is noted that:

Our relationship with you will therefore be governed principally by the terms and conditions of your insurance policy. In the event that there is any conflict between this letter (and the enclosed terms of business) and the terms of your policy then the terms of your policy will prevail.

[191] This is not to suggest that the lawyers’ obligation to vigorously promote Dr MA interests were diminished because the lawyers were instructed by the insurer, but rather to observe that retainers of this nature differ in a number of respects to that of a conventional retainer.

[192] But it is not the case that a lawyer’s capacity to provide their client with vigorous representation is compromised by the fact that the lawyer has been instructed by their client’s insurer.

[193] An examination of the cases would indicate that difficulties in the tripartite relationship most commonly arise when a lawyer, in the course of representing an insured client, acquires information which has potential to jeopardise the client’s entitlement to continue to maintain the policy of insurance. There is no suggestion of that here.

[194] As noted, in circumstances where a lawyer apprehends that there is any potential for conflict, the proper course for the lawyer is to withdraw.

complaint but had inadvertently omitted the partners when filing her review application. She asks that the partners be reinstated.

[196] I do not intend to do so, not simply from a reservation that it would be inappropriate to do so (the partners not having been named in the application have been accorded no opportunity to respond to it), but from having concluded that the application has been correctly directed to the parties named in the application.

[197] In making argument that [Lawfirm 1] prefer the interests of the insurer over the interests of an insured party because it was frequently instructed by the insurer, Dr MA is concerned that both Ms NB and Ms OC were also potentially prepared to compromise their personal and professional reputations in the interests of protecting the firm’s commercial relationship with the insurer.

[198] A lawyer must be independent and free from compromising influences or loyalties when providing services to his or her clients.30

[199] The relationship between lawyer and client is one of confidence and trust that must never be abused.31

[200] Whilst she concedes that Ms NB was, as she describes it, put in a position of conflicted interest by her employer, that concession is promptly qualified by submission that Ms NB “still has the professional responsibility not to involve herself in such conflicts, and that she has shown insufficient vigilance with regard to her relationship with NZPB as well, in respect to presenting the seminar mentioned above”.32

[201] In her closing submissions, Dr MA refrains from directly levelling allegation that the lawyers were conflicted, but nevertheless argues there may be an inherent risk that Ms OC could be potentially compromised by a desire to retain a relationship with [Lawfirm 1] which would sustain an income stream for her.

[202] Mr PD says that no pressure, either explicit or implicit, was put upon the firm by the insurer to intervene in Dr MA’s case. He says that he gave no instructions to either Ms NB or Ms OC to close down the case. Ms NB says that she and Ms OC independently managed Dr MA’s case, and that she had never received instructions or pressure from the firm’s partners to advance the case with a view to considering the

_{insurer’s interests. Ms OC says that she had no knowledge
as to [Lawfirm 1]’s}

relationship with the insurer, nor had she had any dealings with the insurer. She was not privy to any reporting between [Lawfirm 1] and the insurer.

[203] The fact that [Lawfirm 1] may have been instructed frequently by the insurer, does not, in the absence of evidence to suggest otherwise, establish that the firm, or lawyers representing the firm, were conflicted, or potentially conflicted. Dr MA’s argument that inference can be reasonably drawn that the lawyers and firm were conflicted because [Lawfirm 1] were frequently instructed by the insurer falls well short of establishing an evidentiary basis to support conclusion that the lawyers were conflicted, or that the inherent possibility of conflict jeopardised the representation she had received.

[204] Finally, Dr MA raises concern that the lawyer’s independence was compromised not only by its relationship with the insurer, but by what she describes as the “apparent closeness that Ms NB had with the NZPB”.33

[205] It had come to her attention that Ms NB and the then CEO of the NZPB had jointly presented at a seminar that had been organised for psychologists working in the area of preparing reports for the Family Court.

[207] The fact that Ms NB presented at a seminar in tandem with the Chief Executive of the NZPB did not remotely compromise her ability to continue to independently promote her client’s interests when defending those clients in conduct complaints.

[208] The dissemination of intellectual knowledge, professional expertise and advice, cannot be quarantined by a misplaced and excessively sensitive perception of potential conflict.

[210] Pursuant to s 206(4) of the Act, I direct that this decision be published so as to be accessible to the wider profession in a form anonymising the parties and bereft of anything as might lead to their identification.

In accordance with s 213 of the Lawyers and Conveyancers Act 2006 copies of this decision are to be provided to:

New Zealand Legal Complaints Review Officer

MA v NB [2019] NZLCRO 102 (20 September 2019)